Ray Dalio, the billionaire investor who predicted the 2008 financial crisis, said the United States is in a kind of “civil war” due to rising government debt, large wealth gaps and internal disorder.
Dalio, the founder of the investment management firm Bridgewater Associates, has long warned that growing political and economic disruption in the United States could lead to a so-called “civil war” among Americans, not with guns, but an inability to come to a consensus.
“We have a civil war of some sort which is developing in the United States and elsewhere where there are irreconcilable differences,” Dalio told Bloomberg’s Francine Lacqua in an interview that aired Friday.
Dalio, 76, cited rising government debt and increasing wealth disparities as examples of economic factors that can lead to greater conflicts. He compared the present state of affairs to that in 1937 or 1938, when the U.S. experienced an economic downturn amid the Great Depression, as global conflict escalated.
The U.S. is currently confronting an ongoing debt issue that some fear could turn into a full-blown crisis. Public debt is over $30 trillion, amounting to 99 percent of the U.S. gross domestic product last year.
Dalio compared increasing national debt to “plaque in the arteries” that can “squeeze out the spending.”
He has previously blamed politicians on both sides of the aisle for the accumulating debt.
The U.S. also faces a massive wealth disparity, with the top 10 percent of earners holding more than two-thirds of the nation’s wealth while the bottom 50 percent hold less than 4 percent.
“When there are larger wealth gaps and values gaps, then there are greater conflicts,” Dalio said.
Aside from economic pains, Dalio cited other factors, such as geopolitics, technological advancements and natural disasters, that contribute to disorder.
While he brushed aside concerns of another world war, he explained that each sector has its own “war.”
“These conflicts will become tests of power by each side,” he said, adding that it’s crucial to remain vigilant in order to solve problems.
“If we don’t worry about these things, then we have greater risks,” Dalio added.
Dalio has raised similar concerns about growing instability in the U.S. in the past. In May 2024, he raised worries about deepening political polarization that makes it impossible for people to come together to solve problems.
In April, he also raised concerns about a potential economic recession or depression due to market instability caused by President Donald Trump’s sweeping tariffs on most of the U.S.’s trading partners.
“If you take tariffs, if you take debt, if you take the rising power challenging existing power, if you take those factors and look at the factors - those changes in the orders, the systems, are very, very disruptive,” Dalio said at the time.
