Billionaire Ray Dalio warned Friday that surging U.S. debt and hardening political divides under Donald Trump are pushing the country toward civil war.
The veteran hedge fund manager, 76, warned that borrowing “relative to income” is “like plaque in the arteries that then begins to squeeze out the spending.”
He told Bloomberg the combination of swelling deficits, wealth inequality, and global flashpoints has created “plenty to worry about” and an environment “very much analogous” to the years before World War II.
Asked whether a wider conflict is imminent, he replied that a “civil war of some sort” is developing with “irreconcilable differences” in the U.S. and elsewhere moving toward “tests of power.”
As such, Dalio, the founder of Bridgewater Associates, added, it was “crucial” to address the strains now.
Trump, for his part, keeps boasting that the U.S. is enjoying the “strongest economy ever,” and likes to portray himself as ‘The Peace President.’
On social media and in speeches, he’s hailed “the best of all worlds” with prices “down,” record stock markets, and tariffs “making our country an economic power again,” claims his team has echoed from the White House lectern and campaign channels.
But independent reads are less rosy. Revised labor data showed the weakest quarter since 2010 outside the pandemic, while deficits remain swollen and interest on the debt has topped $1 trillion.
Official projections also back Dalio’s dire fiscal warning. The Congressional Budget Office estimates debt held by the public equaled about 99 percent of GDP in 2024 and will climb to roughly 122 percent by 2034—higher than any prior peak—driven by persistent deficits and rising interest costs.
Dalio’s critique comes as he has increasingly framed the stakes of America’s political economy during Donald Trump’s presidency.
In an interview published last month by the Financial Times, Dalio said the U.S. under Trump is veering toward a 1930s-style autocratic climate as polarization deepens and state intervention rises.
However, he faulted both parties and urged a blend of higher tax take and spending cuts to defuse what he calls the “deficit/debt bomb.”
“If we don’t worry about these things, then we have greater risks,” Dalio told Bloomberg.
Dalio founded Bridgewater in 1975 and became synonymous with an internal culture of “radical transparency.” He began a gradual exit from management in 2017 and completed his transition this summer, selling his remaining stake and stepping off the board.
The Westport, Connecticut, firm, led by CEO Nir Bar Dea, managed about $92 billion as of Dec. 31 and is on track for its strongest year since 2010, Bloomberg reported.
The Daily Beast has contacted the White House for comment.
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