'Hedge Fund Pioneer' Dalio: "US Presidential Election, Worried More About What Comes After Regardless of Winner"

Serious US National Debt Issue, Neither Candidate Shows Interest

Ray Dalio, founder of Bridgewater Associates and known as the "godfather of hedge funds," argued that the period after the U.S. presidential election in November poses a bigger problem for the United States than the election itself. He pointed out that regardless of who becomes president, the U.S. cannot avoid issues such as geopolitical conflicts, fiscal deficits, and political polarization.

According to CNBC on the 30th (local time), Dalio said at the Future Investment Initiative (FII) event held in Riyadh, Saudi Arabia, "Both presidential candidates worry me," adding, "Debt is concerning, and so are domestic and international conflicts and climate issues."

[Image source=Reuters Yonhap News]

Dalio noted that Donald Trump, the Republican presidential candidate and former president, is "much more capitalist" than Democratic candidate Vice President Kamala Harris, which could be better for the domestic capital market. However, he analyzed that Trump's tariff increases could act as inflationary pressure and that the success of tariff policies depends on how much tariff revenue is converted into U.S. productivity. Experts criticize tariff hikes for potentially fueling inflation and harming the U.S. economy, but Trump counters that tariffs can be offset by job creation and factory expansions in domestic manufacturing.

Dalio also emphasized the seriousness of the U.S. fiscal deficit problem. He pointed out that about one-third of the increasing supply of U.S. Treasury bonds is absorbed by foreigners and warned that since it is essentially debt, it could cause supply and demand issues in the future. Currently, the U.S. fiscal deficit stands at approximately $28.3 trillion, about 99% of the gross domestic product (GDP).

Dalio is not the only one warning about the fiscal deficit issues of the two candidates running in the November 5 election. The bipartisan nonprofit organization "Committee for a Responsible Federal Budget" (CRFB) announced earlier this month in a report that if former President Trump's campaign promises are fulfilled, the federal deficit the U.S. will bear over the next decade could reach $7.5 trillion (about 1,117 trillion won). This is more than twice the size of the deficit caused by Vice President Harris's promises, estimated at $3.5 trillion. Mark Goldwein, CRFB's senior vice president, said, "Clearly, neither side's promises stabilize the debt," and predicted that the U.S. fiscal deficit will increase by about $22 trillion over the next decade even without these promises.

Dalio stated, "Since all of this is essentially a problem on both the left and right, the country needs to unite and carry out major reforms," adding, "For this, a strong centrist leader is needed, but currently, both Trump and Harris are far from that." Earlier, in an interview with CNBC last month, Dalio also emphasized that regardless of who wins the election, the debt pressure is unlikely to ease, saying, "Neither of them is what the country needs."