Ray Dalio compares US debt to clogged arteries, warns of a ‘nonviolent civil war’ ahead

Billionaire investor Ray Dalio, who famously predicted the 2008 financial crisis, has warned that the United States is heading toward a form of “civil war” — not through armed conflict, but via deepening internal divisions driven by surging debt, inequality, and political breakdown.

Ray Dalio, founder of Bridgewater Associates, believes rising political and economic instability could spark what he calls a modern civil war in the US, defined by a collapse in national consensus.

“We have a civil war of some sort which is developing in the United States and elsewhere where there are irreconcilable differences,” Dalio said in a Bloomberg interview on October 10.

He pointed to soaring government debt and widening wealth inequality as flashpoints. Dalio compared current conditions to the late 1930s — a time marked by domestic economic strain and global unrest.

Public debt stood at 99% of US GDP in 2024, according to the Congressional Budget Office, and is projected to hit 116% by 2034 — a historic high. Dalio likened the mounting debt to “plaque in the arteries,” warning it could choke future spending.

He also highlighted the wealth divide: the top 10% of Americans hold more than two-thirds of the nation's wealth, while the bottom half owns less than 4%.

“When there are larger wealth gaps and values gaps, then there are greater conflicts,” Dalio said.

While ruling out a global war, Dalio noted that economic, technological, and geopolitical pressures are creating sector-specific conflicts that test each side’s power.

“These conflicts will become tests of power by each side,” he said, stressing the need for vigilance. “If we don’t worry about these things, then we have greater risks.”

Dalio’s latest remarks echo earlier warnings. In May 2024, he cited growing political polarization as a major obstacle to problem-solving. A month earlier, he cautioned about a potential economic downturn, blaming instability partly on Trump-era tariffs.

“If you take tariffs, if you take debt, if you take the rising power challenging existing power… those changes in the orders, the systems, are very, very disruptive,” Dalio warned.