Ray Dalio warns that politicians can't solve the 'debt bomb problem' without serious voter blowback
"There is no way that the deficit/debt bomb problem can be sustainably dealt with unless there is a mix of tax revenue increases and spending decreases that are determined in a bipartisan way," Dalio wrote in an X post on June 30.
Dalio said in his post that both Republicans and Democrats know they have to cut the deficit by raising taxes and cutting spending. This "would lead to a supply/demand balance improvement for US debt which in turn would lower interest rates," he added.
Dalio said lower interest rates would "reduce the budget deficit" and "help the markets and the economy."
"But because politics have become so absolutist, they feel they can't go down this obviously best path because both their constituents and their parties will throw them out of office if they explored this more balanced approach," Dalio wrote on X.
"To me, that's a tragedy," he added.
A representative for Dalio did not respond to a request for comment from Business Insider.
This isn't the first time Dalio has warned about the ramifications of leaving debt levels unattended. In February, Dalio told attendees at the World Governments Summit in Dubai that the US could suffer the financial equivalent of a "heart attack" if debt continued to soar.
Then, in March, Dalio said he had met House Budget Chair Jodey Arrington and other House Republicans to discuss the national debt. Dalio said after the meeting that there was a " pretty broad recognition" among attendees that the deficit needed to be reduced to around 3% of US GDP.
The federal government spent $6.75 trillion in the 2024 fiscal year but only collected $4.92 trillion in revenue. The resulting deficit of $1.83 trillion was $138 billion higher than the previous fiscal year's.
Dalio isn't the only business leader who has sounded the alarm on the US debt problem.
Elon Musk, the CEO of Tesla and SpaceX, has sharply criticized President Donald Trump's" One Big Beautiful Bill" for worsening the country's debt situation. Musk was a prominent financial backer of Trump and used to lead the administration's cost-cutting outfit, the White House DOGE Office.
But Musk broke with Trump just days after he announced his departure from DOGE on May 28. Musk called Trump's bill a "MOUNTAIN of DISGUSTING PORK" on June 5 before walking back his attacks the following week.
Musk, however, resumed his attacks on the bill over the weekend. The bill is pending a vote in the Senate, and GOP lawmakers hope to send it to Trump's desk by July 4.
"It is obvious with the insane spending of this bill, which increases the debt ceiling by a record FIVE TRILLION DOLLARS that we live in a one-party country — the PORKY PIG PARTY!!" Musk wrote in an X post on Monday.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Hill
16 minutes ago
- The Hill
Trump administration revokes Biden era abortion rule for veterans
The Trump administration revoked a Biden era abortion rule on Friday that allows veterans to receive abortions under their medical package. The Department of Veteran Affairs is reversing a 2022 rule that provided access to abortion counseling and abortions to certain pregnant veterans in addition to VA beneficiaries. 'We take this action to ensure that VA provides only needed medical services to our nation's heroes and their families,' the Department wrote in a scheduled release for the Federal Register. Officials said they were seeking to ensure taxpayer dollars weren't used to provide pregnancy terminations. 'As a matter of law, it is without question that VA has the authority to bar provision of abortion services through the VA medical benefits package to veterans,' the release read. 'From 1999 until 2022 that is in fact what VA did. It was not until 2022 when the VA Secretary reversed this course,' they added. The department said they would not prohibit providing abortion care to pregnant women in life-threatening circumstances, including treatment for ectopic pregnancies or miscarriages. GOP lawmakers lauded the move slamming the Biden administration for previous changes. 'It was wrong that the Biden administration violated settled law in 2022 and began offering abortion services through VA. We pushed back hard on this disastrous policy over the last two years to hold the Biden-Harris administration accountable and protect the lives of the unborn,' House Committee on Veterans' Affairs Chairman Mike Bost (Ill.) and Reps. Mariannette Miller-Meeks (Iowa), Morgan Luttrell (Texas), Derrick Van Orden (Wis.), Keith Self (Texas), and Tom Barrett (Mich.) said in a Friday statement. 'It's simple – taxpayers do not want their hard-earned money spent on paying for abortions – and VA's sole focus should always be providing service-connected health care and benefits to the veterans they serve,' they added. However, others said the shift in policy will harm servicemembers and their families following the Supreme Court's decision to overturn Roe v. Wade in 2022, eliminating the constitutional right to abortions. Katie O'Connor, senior director of federal abortion policy at the National Women's Law Center, said the effort was a 'direct attack' on those who have served our country. 'At a time when extremist lawmakers are passing cruel abortion bans and restrictions, this move only deepens the crisis those laws have created — stripping veterans of their reproductive freedom and creating even more confusion about where they can turn for care. 'Let me be clear: abortion is health care,' O'Connor said in a Friday statement. 'Veterans already face unique challenges to their health and well-being, including experiencing PTSD, recovering from military sexual trauma, and facing an increased risk of suicide. Banning access to the full range of reproductive services, including abortion, further jeopardizes their health and safety. No one should have to travel hundreds of miles, endure financial hardship, or risk their health just to get the medical care they need. Our veterans deserve better,' she added.
San Francisco Chronicle
an hour ago
- San Francisco Chronicle
Cincinnati officials discuss city crime and widespread response to video of violent fight
Days after a brawl that injured six people in Cincinnati, the mayor and other city leaders said Friday they would beef up law enforcement patrols but criticized how the much-shared video of the fight had portrayed the city in what they see as an unfair and cynical light. 'Let me be clear, there is no place for violent crime in Cincinnati, whether it's a fight or gun violence,' Mayor Aftab Pureval said. 'We will pursue those responsible and we will hold them accountable no matter who they are.' Video of the fight quickly went viral, and conservatives leaders and influencers seized on the brawl to point out what they see as lawless urban areas in America. Those voices included Vice President JD Vance, Ohio gubernatorial candidate Vivek Ramaswamy and the vice president's half brother, Cory Bowman, who is running to be mayor of Cincinnati. A video of the fight shows a crowd milling about before several people start throwing punches. One man falls to the ground and is repeatedly punched and kicked by bystanders. Another woman is punched in the face and falls to the ground, lying motionless before another woman helps her. She can be seeing bleeding from the mouth. The mayor acknowledged on Friday the perception remained that the city was dangerous, but he pointed out that data showed the violent crime was declining in the city. Pureval also said 'there's a concerning increase in burglaries and breaking and entering, and shootings in some specific areas' without providing the data. 'Currently too many Cincinnatians don't feel safe,' he said. 'All of us, especially me, are clear-eyed and working urgently to fix that.' Pureval said he was working with Republican Gov. Mike DeWine to deploy state highway patrol to work highways into the city, which should free up more police officers. He also said police units like SWAT and the Civil Disturbance Response Team will expand their reach in the city. Cincinnati Police Chief Teresa Theetge said five men and one woman 'were subjected to unimaginable physical violence' in the brawl. She didn't identify them. She also said six people have been charged with assault and rioting for playing a role in the brawl, three of whom are in custody. 'This remains an open investigation, and I want to assure you, we will not stop until justice is finally served,' she told reporters, adding that they plan to release footage of the brawl, including body camera footage next week. But several speakers, including a pastor and a council member, talked about how the fight had been racialized and several blamed conservative Republicans for fueling that narrative. 'We would not be here and this will not be national news if this was a group of Black people that jumped on other Black people,' Pastor Damon Lynch, III told reporters. 'Obviously it's national news because it's been racialized.' Lynch said critics were focused on the Black participants but haven't mentioned a white man who, he says, could be seen in a video of the brawl slapping a Black man during the fight. 'Nobody's asking why didn't he just walk away?" Lynch said. Council Member Scotty Johnson also criticized the media for playing the brawl on a loop all week. 'What role do you play in quoting misdirected national leaders talking about a city that is on the right track, but they are doing everything they can to try take us off that track,' Johnson said. Toward the end of the press conference, a reporter asked Pureval how he would deal with the racial tensions in the city that have been exacerbated by this brawl. 'It's overt racial tensions that have been claimed by irresponsible leaders, who have unfortunately cynically tried to take advantage of this awful fight and try and divide us,' he said, noting that Cincinnati 'has a long history of being, on the on the very front foot of racial justice' including as a stop on the Underground Railroad.
New York Times
an hour ago
- New York Times
Senate Passes Its First Spending Bills, but Battles Lie Ahead
The Senate on Friday overwhelmingly passed the first of its spending bills for the coming year, with bipartisan approval of measures to fund military construction projects, veterans and agriculture programs and legislative branch agencies. But the broad agreement over the $506 billion package of bills, typically the least controversial of the annual federal spending measures, masked a bitter fight in Congress over how to fund the government past a Sept. 30 shutdown deadline. Senators pushed through the legislation after several intense days of haggling as part of an agreement to allow the chamber to make progress on funding the government before senators leave Washington for a monthlong summer recess. 'We are on the verge of an accomplishment that we have not done since 2018 — and that is pass appropriation bills across the Senate floor prior to the August recess,' Senator Susan Collins, Republican of Maine and the chairwoman of the Appropriations Committee, said on the floor. Still, debate over the package hinted at the bigger spending challenges that lie ahead. Democrats, furious about the White House's efforts to subvert Congress's power in the purse, are wary of striking spending deals with Republicans when President Trump and his team have signaled they intend to continue ignoring or defying lawmakers' spending dictates, even those enacted into law. And Republicans are fighting among themselves over how closely to hew to the Trump administration's spending targets. The package approved on Friday night would provide $452 billion for veterans programs, $300 billion of it mandatory spending to fund veterans benefits; $19.8 billion for military construction and family housing projects; $27.1 billion for agricultural programs; and $7.1 billion for the operations of Congress and legislative agencies. Want all of The Times? Subscribe.
