Billionaire Ray Dalio warned last week that the U.S. is heading for a major debt crisis, likening the nation to a person on the verge of a heart attack.

The Bridgewater Associates founder wrote in an August 21 LinkedIn post that a $4 billion U.S. debt buyback, combined with rising bond yields, a weak dollar and a Japanese sell-off of U.S. bond holdings all point to a potential government debt crisis, which can result in "the equivalent of an economic heart attack that comes when the constriction of debt-financed spending shuts down the normal flow of the economic circulatory system."

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Dalio wrote that the U.S. will see around a $2 trillion budget shortfall this year, with $11 trillion in debt service payments. Earlier this month the U.S. topped $40 trillion in debt for the first time.

"I am confident that the government's financial condition is at an inflection point because, if this is not dealt with now, the debts will build up to levels where they can't be managed without great trauma," Dalio explained.

Otherwise, he added, the economic heart attack could come at any time, "hastened or postponed by policies and exogenous factors, like big political shifts and wars.

"My guess," he added, "is that it will come in three years, give or take two, if the course we're on is not changed."

The Congressional Budget Office estimates that, for 2026, the deficit will account for about 6% of the U.S. GDP, or $1.9 trillion.

Dalio proposed getting the budget deficit to 3% of the GDP by slashing spending, lowering interest rates and boosting tax revenue — strategies that he says "need to happen concurrently so as to prevent any one from being too large" and causing a "traumatic" adjustment.

He cautioned, though, that "good fundamental adjustments" rather than a forced approach, like the Fed pushing interest rates down "unnaturally," are key.

Treasury Secretary Scott Bessent, however, claimed that the U.S. budget deficit has peaked under President Trump and that "We can grow our way out" of the $40 trillion debt.

And in July, the Federal Reserve called the U.S. financial system "sound and resilient."

But that doesn't mean Dalio is the billionaire who cried wolf.

Government estimates project the gross federal debt will hit $64 trillion in a decade and that the debt is growing faster than the economy — which the Government Accountability Office said could lead to everything from higher borrowing rates for mortgages and cars to cost of living price hikes coupled with wage stagnation.

Experts also say that rising debt could lead to "higher taxes with no additional services because the taxes will pay the interest on the debt."

All of which means that concerned Americans should start taking steps now to shore up their finances to help blunt the blow of a debt crisis if and when it comes.

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To protect your money in a debt crisis, Dalio suggested "diversifying well in asset classes," underweighting bonds and investing in "a bit of Bitcoin" and 10% to 15% in gold.

While Moneywise was unable to reach Dalio for comment, certified financial planners Odaro Aisueni and Don Grant offered tips to help prepare your finances for a potential debt crisis:

1. Build and maintain a financial cushion: "Your emergency fund is your first line of defense during financial uncertainty," Aisueni told Moneywise. Grant added that a slush fund for "non-critical lifestyle spending" could also help you avoid using credit for extra expenses.

2. Pay down debt: Grant told Moneywise that paying down debt and working to "clean up your credit" puts you "in the best possible position to borrow if necessary." He also said not to take on any "unnecessarily large obligations" like car payments — an especially important note if borrowing and loan costs skyrocket.

3. Review your financials: Aisueni said that "the goal isn't to reposition your portfolio in anticipation of a downturn" but, rather, ensure it still aligns "with your risk tolerance, goals and time horizon … so you can remain invested even when markets become volatile or uncomfortable." Grant also suggested a "monthly budget triage" to eliminate unneeded subscriptions or other expenses that frees up extra cash.

4. Pay attention to job security: Aisueni noted that keeping an eye on employment trends in your industry and company, while also maintaining a current resume, skillset and professional network "can provide additional flexibility if the job market becomes more challenging."

5. For retirees, think ahead: Grant said retirees might consider setting aside 18 months of living expenses in liquid cash equivalents, which "should be enough to weather a market storm/debt crisis." He also said that if you have a significant estate, you could consider dispersing parts of it to heirs while you're still alive — which could include putting conditions on any gift "by asking [heirs] to use it as a cushion or slush fund" for themselves.

Ultimately, experts have warned of a debt crisis for years and no one, including Dalio, knows if it will actually hit.

But by taking steps to protect your pocketbook, you could find yourself in a better financial position regardless of if the crisis ever materializes.

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This article originally appeared on Moneywise.com under the title: Ray Dalio says the US faces a debt crisis 'in three years, give or take two.' 5 things Americans can do now

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