Prof G Markets How America Goes Broke — ft. Ray Dalio
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Sep 5, 2025 
Ray Dalio, a global macro investor and founder of Bridgewater Associates, sheds light on the precarious state of America's finances. He discusses how unprecedented national debt could lead the country into economic turmoil. Dalio critiques current tax policies and warns against complacency regarding government spending. He draws parallels between today’s struggles and past economic crises, emphasizing the urgency for bipartisan solutions. With rising costs and inflation looming, he also touches on the impact of AI on the job market and the need for skill development.
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How Debt Creates National Crises
- Countries go broke when debt outpaces income and debt service squeezes other spending.
- Governments then print money or tax more, causing currency devaluation and self-reinforcing crises.
Take A 3% Deficit Pledge
- Stabilize debt by cutting the budget deficit to about 3% of GDP through balanced tax increases and spending cuts.
- Aim for roughly equal shares of increased taxes and reduced spending rather than arguing over particulars.
What Happens If Politics Fail
- If policymakers fail politically to address deficits, markets and governments will act to force adjustment.
- Actions include pressuring holders to buy debt, shortening maturities, capital controls, and central bank debt purchases that devalue money.