Kathmandu. Renowned hedge fund manager Ray Dalio has issued a chilling warning about america’s rising debt. “The U.S. is reaching a financial turning point where the supply of credit may exceed demand,” he said. This can lead to a crisis. Which will be difficult to solve. ’
Speaking in a podcast with Scott Galloway, Dalio said that this year alone the U.S. government will spend about $7 trillion and earn about $5 trillion. So america will spend 40 percent more than what it earns. Debt is now about six times what the U.S. earns. This means that if a person earns Rs 1 lakh, he will have a loan of Rs 6 lakh.
According to Dalio, the U.S. will have to pay or reissue $12 trillion in debt next year alone. Of this, about $9 trillion is maturing debt and $2 trillion is new debt. which will be issued to meet the losses.
In addition, $1 trillion will go to pay interest. Which is half of the budget deficit. “You have to sell a lot of debt,” Dalio warned. We are now at a point where a lot of debt will be added. Which is close to a level. That means the U.S. is close to the danger mark in terms of debt.
Dalio cited conversations with former fed presidents, central bank chiefs and Treasury officials. Nevertheless, he described it as a “political problem”. Lawmakers privately believe that tax increases and spending cuts are necessary to stabilize the deficit.
Dalio suggested a 3 percent solution to save america from debt. Accordingly, the deficit should be brought down to about 3 per cent of gdp. Which is currently 6-7 percent. “For this, taxes will have to be increased by 4 per cent and expenditure will have to be cut by 4 per cent,” he said. ’
