Two of Wall Street’s most recognized and renowned contrarians are sounding the alarm over what they regard as America’s next self-inflicted crisis: runaway government debt.

Bridgewater Associates founder Ray Dalio told Bloomberg in an an interview aired this week that U.S. borrowing is rising at a pace “very much analogous” to the years before World War II. When debt grows faster than income, he said, “it’s like plaque in the arteries,” choking off productive spending. Dalio blamed both political parties for ignoring what he called a “deficit-and-debt bomb.” He advocated a mix of tax increases and spending restraint to keep the economy from seizing up.

At the same time, Black Swan author Nassim Nicholas Taleb warned that investors should hedge against a possible market crash driven by the same problem. He called the federal debt a “white swan,” or a crisis hiding in plain sight, and said that when interest payments become the largest line item in the U.S. budget, “you are in trouble.”

Both men argue that surging debt levels are a structural risk, not some kind of market-timing call. And it's true that, at present, debt held by the public — economists’ favored measure of national debt levels, which represents money the federal government owes to investors — equals about 99% of U.S. GDP , according to the Congressional Budget Office . What's more, it’s projected to hit 118% by 2035 , surpassing even the postwar peak and making for highest level in modern history.

Historically, debt held by the public has averaged about 45% of GDP , but in the wake of the pandemic, it has hovered near or even above 100%.

In theory, a government with a growing economy and tax base can keep borrowing indefinitely, so long as the economy’s growth rate exceeds the interest it pays on its debt. But in practice, rising debt still carries costs: Interest payments eat up a larger share of the budget, and investors may eventually demand higher yields if they doubt Washington’s discipline. Taxes may be a permanent claim on national income, but political and economic limits constrain how much can be raised. The system works only as long as growth , inflation, and investor confidence remain in a delicate balance.

In essence, Dalio sees America’s mounting debt as part of a broader long-term cycle of decline, warning that unchecked borrowing and political division could destabilize the entire system.

Taleb is arguing that the debt crisis is already brewing in plain sight, a “white swan” everyone can see coming but few are hedging against, and that investors’ complacency is the real danger. It’s less about what can go wrong and more about lack of preparation for the risk.

Stocks sit near record highs and investors appear more exuberant than spooked, at least for the moment. But such a scenario plays right into Taleb’s notion that complacency is the risk, while Dalio sees debt levels rising fast enough to outpace growth and the payments choking off productive spending. Meanwhile, Dalio also warns of “ civil-war-like ” divisions that could test U.S. stability, while Taleb said true risk management requires both optimism and hedging edge-case risks.

In other words, while debt may be predictable, ignoring it makes it more dangerous.