Congress officially passed President Donald Trump’s “big, beautiful bill,” and billionaire Ray Dalio is warning about the possible economic consequences, which could include spending cuts, major tax increases and massive money printing.
“Unless this path is soon rectified to bring the budget deficit from roughly 7% of [gross domestic product] to about 3% by making adjustments to spending, taxes, and interest rates, big, painful disruptions will likely occur,” Dalio, the founder of Bridgewater Associates, wrote in a post on X Thursday.
Dalio said the bill, which now heads to the president’s desk to be signed into law, is expected to result in yearly deficits of $2 trillion with revenues of about $5 trillion exceeded by spending of about $7 trillion.
This deficit would increase the national debt over the next decade, pushing the debt, currently the equivalent of about $230,000 per U.S. family, to about $425,000 per family, he warned.
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Paying off this debt will also become increasingly expensive. Interest and principal payments on the debt would rise from around $10 trillion, $1 trillion of which is interest, to around $18 trillion, $2 trillion of which would be interest. This would result in either spending being slashed, “unimaginable” tax increases or a lot of “printing and devaluing of money and pushing interest rates to unattractively low levels,” he said.
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“This printing and devaluing is not good for those holding bonds as a storehold of wealth, and what’s bad for bonds and U.S. credit markets is bad for everyone, because the U.S. Treasury market is the backbone of all capital markets, which are the backbones of our economic and social conditions,” Dalio said.
Last month, Dalio similarly sounded the alarm on America’s chronic spending on FOX Business Network’s “The Claman Countdown,” saying the U.S. is headed for an “economic heart attack.”
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“We’re spending 40% more than we’re taking in, and this is a chronic problem,” he said. “So, what you’re seeing is the debt service payments beginning to squeeze away, not beginning, well, into squeezing away. So, it’s like plaque in the arteries squeezing away buying power. And, as you can do the numbers, you will see that you can have an economic heart attack as a result of that.”
On Thursday afternoon, Congress passed Trump’s “big, beautiful bill” after back-to-back sleepless sessions for both the House and Senate. The bill, which advances Trump’s policies on taxes, the border, defense, energy and the national debt, narrowly passed the House of Representatives in a mostly party-line vote.
All but two House Republicans, Thomas Massie, R-Ky., and Brian Fitzpatrick, R-Pa., voted for the bill, which passed 218-214.
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