'We’re headed toward the rocks': Ray Dalio warns U.S. debt is reaching the point of no return

00:11:58
https://www.youtube.com/watch?v=Ur5zvooRewY

Sintesi

TLDRThe video features a discussion on the alarming rise of the U.S. national debt, currently at approximately $36 trillion, and the potential increase of the federal deficit by $3.3 trillion over the next decade. Ray Dalio, a prominent author and investor, explains the mechanics of debt and its implications for government spending. He emphasizes that while debt can create buying power, it can also lead to crowding out of essential spending if it does not generate income. Dalio proposes a three-part solution to address the deficit, focusing on spending cuts, tax revenue improvements, and managing interest rates. The conversation highlights the bipartisan nature of the debt issue and the historical context of successful deficit reduction efforts.

Punti di forza

  • 💰 Current U.S. national debt is approximately $36 trillion.
  • 📈 Federal deficit could increase by $3.3 trillion in the next decade.
  • 📚 Ray Dalio's book discusses the impact of debt on geopolitical order.
  • ⚖️ High debt levels crowd out government spending.
  • 📉 Interest rates are crucial for managing debt service costs.
  • 🔄 A three-part solution is proposed to address the deficit.
  • 📊 Average debt per person in the U.S. is about $230,000.
  • 🤝 Both political parties have contributed to rising national debt.
  • 📅 Historical context shows successful deficit reduction from 1991 to 1998.
  • 🔍 Understanding debt mechanics is essential for economic stability.

Linea temporale

  • 00:00:00 - 00:05:00

    The discussion begins with a focus on President Trump's budget proposal, which could potentially increase the federal deficit by $3.3 trillion over the next decade. This alarming figure has raised concerns among lawmakers about the rising national debt, currently at approximately $36 trillion. Ray Dalio, a prominent author and hedge fund founder, joins the conversation to explain how mounting debt and other forces threaten the current geopolitical order, which has been stable since World War II. He emphasizes the importance of understanding the mechanics of the credit system, likening it to the circulatory system that distributes buying power throughout the economy, and warns that if debt does not generate income, it leads to increased interest rates and reduced spending.

  • 00:05:00 - 00:11:58

    Dalio elaborates on the implications of rising debt, noting that the government's annual spending is around $7 trillion, with a $2 trillion deficit. He highlights the crowding out effect, where increasing debt service limits government spending. The current debt burden translates to about $230,000 per person, and as demand for bonds decreases, investors are shifting towards gold. Dalio proposes a '3% solution' to address the debt issue, suggesting a combination of spending cuts and increased tax revenue to stabilize the economy. The conversation underscores the political challenges in achieving these solutions, as both parties have contributed to the reckless accumulation of debt over the past decades.

Mappa mentale

Video Domande e Risposte

  • What is the current U.S. national debt?

    The current U.S. national debt is approximately $36 trillion.

  • What does Ray Dalio's book discuss?

    Ray Dalio's book discusses how mounting debt and other forces are jeopardizing the current geopolitical order.

  • What is the proposed solution to the debt issue?

    Dalio suggests a three-part solution involving spending cuts, tax revenue improvements, and managing interest rates.

  • How much is the federal deficit projected to increase?

    The federal deficit could increase by as much as $3.3 trillion over the next ten years.

  • What is the significance of interest rates in this context?

    Interest rates are crucial as they affect debt service costs and overall government spending.

  • What historical context does Dalio provide?

    Dalio references the period from 1991 to 1998 as a model for successful deficit reduction.

  • What is the impact of debt on government spending?

    High debt levels can crowd out spending and limit the government's ability to invest in other areas.

  • What is the average debt per person in the U.S.?

    The average debt per person in the U.S. is about $230,000.

  • What are the risks of increasing national debt?

    Increasing national debt can lead to a loss of confidence among bondholders and potential economic instability.

  • Is the issue of national debt bipartisan?

    Yes, both parties have contributed to the rising national debt over the past decades.

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Scorrimento automatico:
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    OIL TO RESTORE SKIN HEALTH. SAY GOODBYE TO TOE FUNGUS WITH FUNGI
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    GOODBYE TO TOE FUNGUS WITH FUNGI NAIL.
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    NAIL. >> ACCORDING TO A NEW ANALYSIS
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    >> ACCORDING TO A NEW ANALYSIS BY THE CONGRESSIONAL BUDGET
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    BY THE CONGRESSIONAL BUDGET OFFICE, PRESIDENT TRUMP'S BUDGET
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    OFFICE, PRESIDENT TRUMP'S BUDGET COULD INCREASE FEDERAL DEFICIT
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    COULD INCREASE FEDERAL DEFICIT SPENDING AS MUCH AS $3.3
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    SPENDING AS MUCH AS $3.3 TRILLION OVER THE NEXT TEN
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    TRILLION OVER THE NEXT TEN YEARS. THAT FIGURE IS CAUSING
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    YEARS. THAT FIGURE IS CAUSING FRICTION ON CAPITOL HILL, WITH
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    FRICTION ON CAPITOL HILL, WITH MEMBERS OFOF BOTH PARTIES SOUNDG
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    MEMBERS OF BOTH PARTIES SOUNDING THE ALARM ON AMERICA'S RISING
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    THE ALARM ON AMERICA'S RISING NATIONAL DEBT, WHICH NOW SITS
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    NATIONAL DEBT, WHICH NOW SITS APPROXIMATELY $36 TRILLION AND
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    APPROXIMATELY $36 TRILLION AND RISING WITH US NOW, NEW YORK
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    RISING WITH US NOW, NEW YORK TIMES BEST SELLING AUTHOR AND
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    TIMES BEST SELLING AUTHOR AND FOUNDER OF THE BRIDGEWATER
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    FOUNDER OF THE BRIDGEWATER ASSOCIATES HEDGE FUND, RAY
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    ASSOCIATES HEDGE FUND, RAY DALIO. HE'S THE AUTHOR OF THE
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    DALIO. HE'S THE AUTHOR OF THE NEW BOOK TITLED D HOW COUNTRIESO
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    NEW BOOK TITLED HOW COUNTRIES GO BROKE THE BIG CYCLE, WHICH LOOKS
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    BROKE THE BIG CYCLE, WHICH LOOKS AT HOW MOUNTING DEBT AND FOUR
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    AT HOW MOUNTING DEBT AND FOUR OTHER MAJOR FORCES ARE PUTTING
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    OTHER MAJOR FORCES ARE PUTTING CURRENT GEOPOLITICAL ORDER IN
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    CURRENT GEOPOLITICAL ORDER IN JEOPARDY. AND MR. DALIO, THAT'S
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    JEOPARDY. AND MR. DALIO, THAT'S A POLITICAL ORDER REALLY. THAT'S
  • 00:00:50
    A POLITICAL ORDER REALLY. THAT'S BEEN IN PLACE SINCE THE END OF
  • 00:00:52
    BEEN IN PLACE SINCE THE END OF WORLD WAR TWO. AND DEBT COULD BE
  • 00:00:55
    WORLD WAR TWO. AND DEBT COULD BE UNDERMINING THAT. EXPLAIN TO US
  • 00:00:56
    UNDERMINING THAT. EXPLAIN TO US HOW.
  • 00:00:58
    HOW. >> THE REASON I WROTE THE BOOK
  • 00:00:59
    >> THE REASON I WROTE THE BOOK IS THAT FOR ABOUT 50 YEARS I'VE
  • 00:01:03
    IS THAT FOR ABOUT 50 YEARS I'VE BEEN IN THE MARKETS BETTING ON
  • 00:01:05
    BEEN IN THE MARKETS BETTING ON THESE THINGS, AND I WANTED TO
  • 00:01:07
    THESE THINGS, AND I WANTED TO CONVEY THE MECHANICS OF HOW THE
  • 00:01:10
    CONVEY THE MECHANICS OF HOW THE PROCESS WORKS. SO THINK ABOUT IT
  • 00:01:13
    PROCESS WORKS. SO THINK ABOUT IT THIS WAY. THE CREDIT SYSTEM IS
  • 00:01:16
    THIS WAY. THE CREDIT SYSTEM IS LIKE THE CIRCULATORY SYSTEM, AND
  • 00:01:18
    LIKE THE CIRCULATORY SYSTEM, AND THAT IT BRINGS BUYING POWER
  • 00:01:21
    THAT IT BRINGS BUYING POWER THROUGHOUT THE ECONOMY. AND BY
  • 00:01:23
    THROUGHOUT THE ECONOMY. AND BY CREATING CREDIT YOU CREATE
  • 00:01:25
    CREATING CREDIT YOU CREATE BUYING POWER. AND THAT CREATES
  • 00:01:28
    BUYING POWER. AND THAT CREATES DEBT.
  • 00:01:28
    DEBT. >> BUT IF.
  • 00:01:29
    >> BUT IF. >> THAT DEBT PRODUCES INCOME,
  • 00:01:31
    >> THAT DEBT PRODUCES INCOME, THEN THAT'S A HEALTHY SYSTEM. IF
  • 00:01:32
    THEN THAT'S A HEALTHY SYSTEM. IF IT DOESN'T, IT PRODUCES INTEREST
  • 00:01:37
    IT DOESN'T, IT PRODUCES INTEREST RATES AND DEBT SERVICE THAT
  • 00:01:38
    RATES AND DEBT SERVICE THAT BUILD UP AND CROWD OUT SPENDING.
  • 00:01:41
    BUILD UP AND CROWD OUT SPENDING. AND SO WE CAN SEE THAT HAPPENING
  • 00:01:43
    AND SO WE CAN SEE THAT HAPPENING TO THE GOVERNMENT. SO NOW
  • 00:01:45
    TO THE GOVERNMENT. SO NOW INTEREST RATES, FOR EXAMPLE,
  • 00:01:47
    INTEREST RATES, FOR EXAMPLE, RELATE ARE NOW $1 TRILLION. SO
  • 00:01:51
    RELATE ARE NOW $1 TRILLION. SO LET ME PUT THE BUDGET IN
  • 00:01:53
    LET ME PUT THE BUDGET IN PERSPECTIVE. THAT NUMBER THAT
  • 00:01:55
    PERSPECTIVE. THAT NUMBER THAT YOU GAVE IS A WRONG NUNUMBER
  • 00:01:58
    YOU GAVE IS A WRONG NUMBER BECAUSE IT IS THE AMOUNT OF
  • 00:02:00
    BECAUSE IT IS THE AMOUNT OF DEFICIT ON TOP OF THE AMOUNT OF
  • 00:02:03
    DEFICIT ON TOP OF THE AMOUNT OF DEFICIT THAT WOULD BE THERE. $7
  • 00:02:07
    DEFICIT THAT WOULD BE THERE. $7 TRILLION IS THE AMOUNT THE
  • 00:02:09
    TRILLION IS THE AMOUNT THE GOVERNMENT SPENDNDS EVERY YEAR.T
  • 00:02:10
    GOVERNMENT SPENDS EVERY YEAR. IT TAKES IN $5 TRILLION. AS A
  • 00:02:13
    TAKES IN $5 TRILLION. AS A RESULT, IT'S GOT A $2 TRILLION
  • 00:02:16
    RESULT, IT'S GOT A $2 TRILLION DEFICIT. AND IT WORKS THE SAME
  • 00:02:20
    DEFICIT. AND IT WORKS THE SAME FOR GOVERNMENTS AS IT WORKS FOR
  • 00:02:22
    FOR GOVERNMENTS AS IT WORKS FOR INDIVIDUALS OR COMPANIES, EXCEPT
  • 00:02:23
    INDIVIDUALS OR COMPANIES, EXCEPT THE GOVERNMENT CAN PRINT MONEY.
  • 00:02:25
    THE GOVERNMENT CAN PRINT MONEY. AND SO THAT IS BUILDING UP OVER
  • 00:02:27
    AND SO THAT IS BUILDING UP OVER THE NEXT TEN YEARS. IT'S GOING
  • 00:02:30
    THE NEXT TEN YEARS. IT'S GOING TO INCREASE BY THE DEBT, AND THE
  • 00:02:32
    TO INCREASE BY THE DEBT, AND THE DEBT SERVICE IS GOING TO
  • 00:02:34
    DEBT SERVICE IS GOING TO INCREASE BY MORE THAN TEN TIMES
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    INCREASE BY MORE THAN TEN TIMES THAT. $2.5 TRILLION NUMBER,
  • 00:02:40
    THAT. $2.5 TRILLION NUMBER, BECAUSE THAT NUMBER WAS A NUMBER
  • 00:02:42
    BECAUSE THAT NUMBER WAS A NUMBER ON TOP OF THE DEFICIT. SO WHAT
  • 00:02:44
    ON TOP OF THE DEFICIT. SO WHAT WE'RE HAVING IS A CROWDING OUT
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    WE'RE HAVING IS A CROWDING OUT LIKE IN PLAQUE BUILDING UP IN
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    LIKE IN PLAQUE BUILDING UP IN THE SYSM, A CROWDING OUT OF
  • 00:02:52
    THE SYSM, A CROWDING OUT OF SPENDING. AND WE'RE AND THAT
  • 00:02:54
    SPENDING. AND WE'RE AND THAT AMOUNT OF DEBT NOW IS ABOUT
  • 00:02:58
    AMOUNT OF DEBT NOW IS ABOUT $230,000 PER PERSON. SO YOU CAN
  • 00:03:00
    $230,000 PER PERSON. SO YOU CAN SEE IT HAPPEN IN THAT WAY. IN
  • 00:03:02
    SEE IT HAPPEN IN THAT WAY. IN ADDITION, YOU HAVE SUPPLY DEMAND
  • 00:03:04
    ADDITION, YOU HAVE SUPPLY DEMAND ISSUES. IN OTHER WORDS, ONE
  • 00:03:06
    ISSUES. IN OTHER WORDS, ONE MAN'S DEBTS ARE ANOTHER MAN'S
  • 00:03:08
    MAN'S DEBTS ARE ANOTHER MAN'S ASSETS. AND WHEN THERE'S A LOT
  • 00:03:10
    ASSETS. AND WHEN THERE'S A LOT OF MORE DEBT THAT'S BEING SOLD,
  • 00:03:13
    OF MORE DEBT THAT'S BEING SOLD, THEN YOU HAVE A DEMAND PROBLEM,
  • 00:03:16
    THEN YOU HAVE A DEMAND PROBLEM, NOT AN ADEQUATE AMOUNT OF
  • 00:03:17
    NOT AN ADEQUATE AMOUNT OF DEMAND. WE'RE SEEING THIS HAPPEN
  • 00:03:19
    DEMAND. WE'RE SEEING THIS HAPPEN NOW AS CENTRAL BANKS AND FOREIGN
  • 00:03:22
    NOW AS CENTRAL BANKS AND FOREIGN INVESTORS ARE BUYING LESS AND IN
  • 00:03:24
    INVESTORS ARE BUYING LESS AND IN FACT SHIFTING TO GOLD. SO
  • 00:03:26
    FACT SHIFTING TO GOLD. SO THERE'S THAT DYNAMIC THAT I'M
  • 00:03:27
    THERE'S THAT DYNAMIC THAT I'M TRYING TO CONVEY THE MECHANICS
  • 00:03:30
    TRYING TO CONVEY THE MECHANICS OF. IT'S NOT POLITICAL AND
  • 00:03:32
    OF. IT'S NOT POLITICAL AND THERE'S SOMETHING WE CAN DO
  • 00:03:33
    THERE'S SOMETHING WE CAN DO ABOUT THAT. WHAT I CALL THE
  • 00:03:35
    ABOUT THAT. WHAT I CALL THE THREE PART 3% SOLUTION.
  • 00:03:39
    THREE PART 3% SOLUTION. >> RIGHT. AND JUST TO GIVE OUR
  • 00:03:41
    >> RIGHT. AND JUST TO GIVE OUR FRIENDS WHO ARE WATCHING RIGHT
  • 00:03:42
    FRIENDS WHO ARE WATCHING RIGHT NOW JUST A BIT OF PERSPEPECTIVE.
  • 00:03:45
    NOW JUST A BIT OF PERSPECTIVE. WHEN I LEFT CONGRESS, WE HAD
  • 00:03:47
    WHEN I LEFT CONGRESS, WE HAD BALANCED BUDGETS.
  • 00:03:48
    BALANCED BUDGETS. >> WE HAD SURPLUSES.
  • 00:03:50
    >> WE HAD SURPLUSES. >> AND WE HAD A $5 TRILLION
  • 00:03:52
    >> AND WE HAD A $5 TRILLION DEBT. AND JUST TO SHOW THIS IS
  • 00:03:53
    DEBT. AND JUST TO SHOW THIS IS NOT LIKE AS YOU SAID, THIS IS
  • 00:03:56
    NOT LIKE AS YOU SAID, THIS IS NOT A PARTIZAN ISSUE. THEN A
  • 00:03:58
    NOT A PARTIZAN ISSUE. THEN A REPUBLICAN PRESIDENT CAME IN,
  • 00:03:59
    REPUBLICAN PRESIDENT CAME IN, THE DEBT DOUBLED TO 10 TRILLLLI.
  • 00:04:01
    THE DEBT DOUBLED TO 10 TRILLION. THEN A DEMOCRATIC PRESIDENT CAME
  • 00:04:02
    THEN A DEMOCRATIC PRESIDENT CAME IN, THE DEBT DOUBLED AGAIN TO
  • 00:04:04
    IN, THE DEBT DOUBLED AGAIN TO ABOUT 20 TRILLION. THEN DONALD
  • 00:04:06
    ABOUT 20 TRILLION. THEN DONALD TRUMP CAME IN, THE DEBT
  • 00:04:08
    TRUMP CAME IN, THE DEBT EXPLODED. JOE BIDEN CAME IN. THE
  • 00:04:09
    EXPLODED. JOE BIDEN CAME IN. THE DEBT EXPLODED. BOTH PARTIES OVER
  • 00:04:11
    DEBT EXPLODED. BOTH PARTIES OVER THE PAST 25 YEARS HAVE BEEN
  • 00:04:15
    THE PAST 25 YEARS HAVE BEEN EXTRAORDINARILY RECKLESS. WE'RE
  • 00:04:17
    EXTRAORDINARILY RECKLESS. WE'RE NOW TALKING ABOUT ADDING ANOTHER
  • 00:04:19
    NOW TALKING ABOUT ADDING ANOTHER $20 TRILLION IN THE NEXT DECADE.
  • 00:04:20
    $20 TRILLION IN THE NEXT DECADE. COULD YOU EXPLAIN TO US IN
  • 00:04:23
    COULD YOU EXPLAIN TO US IN WRITING HOW COUNTRIES GO BROKE,
  • 00:04:25
    WRITING HOW COUNTRIES GO BROKE, HOW THAT COULD HAPPEN TO THE
  • 00:04:27
    HOW THAT COULD HAPPEN TO THE UNITED STATES IF WE GO FROM
  • 00:04:28
    UNITED STATES IF WE GO FROM HAVING A $37 TRILLLLION DEBT TOA
  • 00:04:32
    HAVING A $37 TRILLION DEBT TO A $57 TRILLION DEBT IN A DECADE,
  • 00:04:33
    $57 TRILLION DEBT IN A DECADE, THAT'S NOT SUSTAINABLE, IS IT?
  • 00:04:35
    THAT'S NOT SUSTAINABLE, IS IT? >> NO. AND YOU COULD SEE IT.
  • 00:04:38
    >> NO. AND YOU COULD SEE IT. OKAY. IF YOU UNDERSTAND THE
  • 00:04:40
    OKAY. IF YOU UNDERSTAND THE MECHANICS, YOU CAN ACTUALLY SEE
  • 00:04:42
    MECHANICS, YOU CAN ACTUALLY SEE IT. SO YOU COULD SEE THAT THIS
  • 00:04:46
    IT. SO YOU COULD SEE THAT THIS DEBT SERVICE HAS NOW CROWDING
  • 00:04:50
    DEBT SERVICE HAS NOW CROWDING OUT SPENDING. SO YOU CAN SEE YOU
  • 00:04:53
    OUT SPENDING. SO YOU CAN SEE YOU CAN'T CUT SPENDING VERY MUCH.
  • 00:04:54
    CAN'T CUT SPENDING VERY MUCH. IT'S FIXED. AND THAT THE
  • 00:04:56
    IT'S FIXED. AND THAT THE INTEREST CONTINUES TO BUILD UP
  • 00:04:58
    INTEREST CONTINUES TO BUILD UP THAT WAY. AND YOU LIKE PLAQUE.
  • 00:05:00
    THAT WAY. AND YOU LIKE PLAQUE. SO IF I WAS A DOCTOR LOOKING AT
  • 00:05:02
    SO IF I WAS A DOCTOR LOOKING AT YOUR CIRCUMSTANCES AND I COULD
  • 00:05:04
    YOUR CIRCUMSTANCES AND I COULD SHOW YOU THAT BUILDING UP AND I
  • 00:05:06
    SHOW YOU THAT BUILDING UP AND I COULD SHOW YOU THAT CROWDING
  • 00:05:07
    COULD SHOW YOU THAT CROWDING OUT, YOU CAN ALSO SEE THE SUPPLY
  • 00:05:11
    OUT, YOU CAN ALSO SEE THE SUPPLY RELATIVE TO THE DEMAND. AND YOU
  • 00:05:13
    RELATIVE TO THE DEMAND. AND YOU COULD SEE THE BIG IMBALANCE. AND
  • 00:05:15
    COULD SEE THE BIG IMBALANCE. AND THEN THERE'S THE BIG RISK THAT
  • 00:05:18
    THEN THERE'S THE BIG RISK THAT NOT ONLY IS THE SUPPLY OF NEW
  • 00:05:21
    NOT ONLY IS THE SUPPLY OF NEW SUPPLY A PROBLEM, BUT ALSO THOSE
  • 00:05:24
    SUPPLY A PROBLEM, BUT ALSO THOSE WHO ARE HOLDING THE BONDS MAY
  • 00:05:26
    WHO ARE HOLDING THE BONDS MAY NOT THINK THEY'RE GOING TO GET A
  • 00:05:28
    NOT THINK THEY'RE GOING TO GET A GOOD REAL RETURN. IF YOU S STUDY
  • 00:05:31
    GOOD REAL RETURN. IF YOU STUDY HISTORY AND YOU SEE THIS, YOU
  • 00:05:33
    HISTORY AND YOU SEE THIS, YOU WOULD NOT WANT TO HOLD THOSE
  • 00:05:35
    WOULD NOT WANT TO HOLD THOSE BONDS EXPECTING A GOOD REAL
  • 00:05:37
    BONDS EXPECTING A GOOD REAL RETURN. AND YOU COULD SEE
  • 00:05:39
    RETURN. AND YOU COULD SEE SELLING. AND SO THAT DYNAMIC IS
  • 00:05:42
    SELLING. AND SO THAT DYNAMIC IS YOU CAN SEE IT MECHANICALLY. AND
  • 00:05:43
    YOU CAN SEE IT MECHANICALLY. AND YOU COULD ALSO SEE THAT WE ARE
  • 00:05:47
    YOU COULD ALSO SEE THAT WE ARE AT THE POINT IN THAT CYCLE THAT
  • 00:05:49
    AT THE POINT IN THAT CYCLE THAT THE ADDING THAT DEBT FROM JUST
  • 00:05:51
    THE ADDING THAT DEBT FROM JUST THIS NEXT YEAR AND THE NEXT TWO
  • 00:05:54
    THIS NEXT YEAR AND THE NEXT TWO YEARS WILL PUT US OVER THE EDGE,
  • 00:05:56
    YEARS WILL PUT US OVER THE EDGE, COULD PUT US OVER THE EDGE VERY
  • 00:05:58
    COULD PUT US OVER THE EDGE VERY CLOSE TO THAT, BECAUSE YOU'RE
  • 00:06:02
    CLOSE TO THAT, BECAUSE YOU'RE NOW HAVING THE NEED TO CREATE
  • 00:06:04
    NOW HAVING THE NEED TO CREATE DEBT IN ORDER TO PAY THE DEBT.
  • 00:06:06
    DEBT IN ORDER TO PAY THE DEBT. AND SO WHEN YOU SEE THESE DEBT
  • 00:06:09
    AND SO WHEN YOU SEE THESE DEBT CYCLES THERE, THERE ARE
  • 00:06:10
    CYCLES THERE, THERE ARE SOMETHING LIKE 50 OF THEM LOLOOD
  • 00:06:12
    SOMETHING LIKE 50 OF THEM LOOKED AT IN THIS BOOK. THEY WHEN YOU
  • 00:06:15
    AT IN THIS BOOK. THEY WHEN YOU GET THAT THE DEBT IS HAVING TO
  • 00:06:17
    GET THAT THE DEBT IS HAVING TO PAY THE DEBT, THEN WHAT HAPPENS?
  • 00:06:19
    PAY THE DEBT, THEN WHAT HAPPENS? YOU HAVE THE GOVERNMENT COME IN
  • 00:06:21
    YOU HAVE THE GOVERNMENT COME IN AND THE CENTRAL BANK AND YOU
  • 00:06:23
    AND THE CENTRAL BANK AND YOU HAVE PRINTING MONEY. YOU'RE
  • 00:06:24
    HAVE PRINTING MONEY. YOU'RE ENTIRELY RIGHT. FROM 1991 UNTIL
  • 00:06:29
    ENTIRELY RIGHT. FROM 1991 UNTIL 1998, THEY REDUCED THE FEDERAL
  • 00:06:31
    1998, THEY REDUCED THE FEDERAL DEBT BY 5% OF GDP, AND WE COULD
  • 00:06:36
    DEBT BY 5% OF GDP, AND WE COULD CUT THE FEDERAL DEBT RIGHT NOW
  • 00:06:39
    CUT THE FEDERAL DEBT RIGHT NOW IF WE IF IT'S DONE IN A CERTAIN
  • 00:06:41
    IF WE IF IT'S DONE IN A CERTAIN WAY, THREE WAYS. YOU CAN CUT
  • 00:06:43
    WAY, THREE WAYS. YOU CAN CUT THAT THAT DOWN TO 3% OF GDP. YOU
  • 00:06:47
    THAT THAT DOWN TO 3% OF GDP. YOU NEED A 3% OF GDP. IT'S NOW GOING
  • 00:06:50
    NEED A 3% OF GDP. IT'S NOW GOING TO BE ABOUT 7% OF GDP. IF YOU
  • 00:06:52
    TO BE ABOUT 7% OF GDP. IF YOU CAN CUT THAT BY DOWN TO 3% OF
  • 00:06:56
    CAN CUT THAT BY DOWN TO 3% OF GDP, THEN YOU CHANGE THE SUPPLY
  • 00:06:59
    GDP, THEN YOU CHANGE THE SUPPLY DEMAND AND YOU DON'T HAVE THAT
  • 00:07:01
    DEMAND AND YOU DON'T HAVE THAT THAT COMPOUNDING EFFECT. AND
  • 00:07:03
    THAT COMPOUNDING EFFECT. AND THERE ARE THREE WAYS TO DO THAT
  • 00:07:05
    THERE ARE THREE WAYS TO DO THAT THERE. AND THEY HAVE TO BE
  • 00:07:06
    THERE. AND THEY HAVE TO BE BALANCED. THE THREE WAYS ARE OF
  • 00:07:09
    BALANCED. THE THREE WAYS ARE OF COURSE IN SPENDING AND IN AND
  • 00:07:12
    COURSE IN SPENDING AND IN AND TAX REVENUE. I'LL EMPHASIZE
  • 00:07:14
    TAX REVENUE. I'LL EMPHASIZE REVENUE AND ALSO THEN INTEREST
  • 00:07:16
    REVENUE AND ALSO THEN INTEREST RATES, BECAUSE INTEREST IS SUCH
  • 00:07:18
    RATES, BECAUSE INTEREST IS SUCH A BIG COMPONENT OF THE DEBT. IF
  • 00:07:21
    A BIG COMPONENT OF THE DEBT. IF THERE'S LOWER INTEREST RATES,
  • 00:07:22
    THERE'S LOWER INTEREST RATES, BUT YOU CAN'T FORCE THOSE
  • 00:07:24
    BUT YOU CAN'T FORCE THOSE INTEREST RATES DOWN BECAUSE
  • 00:07:26
    INTEREST RATES DOWN BECAUSE BONDHOLDERS WON'T WANT TO HOLD
  • 00:07:28
    BONDHOLDERS WON'T WANT TO HOLD IT IF THEY GET A POOR INTEREST
  • 00:07:29
    IT IF THEY GET A POOR INTEREST RATE. BUT YOU HAVE A SITUATION
  • 00:07:31
    RATE. BUT YOU HAVE A SITUATION WHERE IF YOU CHANGE THE SUPPLY
  • 00:07:33
    WHERE IF YOU CHANGE THE SUPPLY AND DEMAND, YOU WILL NATURALLY
  • 00:07:34
    AND DEMAND, YOU WILL NATURALLY HAVE A LOWER INTEREST RATE. SO
  • 00:07:36
    HAVE A LOWER INTEREST RATE. SO WE'RE AT THAT POINT NOW.
  • 00:07:39
    WE'RE AT THAT POINT NOW. >> YEAH. AND GENE ROBINSON, YOU
  • 00:07:41
    >> YEAH. AND GENE ROBINSON, YOU DON'T WAVE A MAGIC WAND ARE
  • 00:07:44
    DON'T WAVE A MAGIC WAND ARE BULLY OF FED CHIEF AND SAY LOWER
  • 00:07:46
    BULLY OF FED CHIEF AND SAY LOWER THE INTEREST RATES BECAUSE THEN
  • 00:07:47
    THE INTEREST RATES BECAUSE THEN THE BONDHOLDERS FLEE. IT REMEMIS
  • 00:07:49
    THE BONDHOLDERS FLEE. IT REMINDS US ALL, I KNOW YOU REMEMBER THIS
  • 00:07:53
    US ALL, I KNOW YOU REMEMBER THIS WHEN IN BILL CLINTON, EARLY BILL
  • 00:07:55
    WHEN IN BILL CLINTON, EARLY BILL CLINTON'S TERM AS AS WE WERE
  • 00:07:57
    CLINTON'S TERM AS AS WE WERE ABOUT TO UNDERGO A DECADE OF
  • 00:07:59
    ABOUT TO UNDERGO A DECADE OF DEFICIT REDUCTION, HE HE WAS
  • 00:08:02
    DEFICIT REDUCTION, HE HE WAS TOLD BY ALAN GREENSPAN, A YOU'RE
  • 00:08:04
    TOLD BY ALAN GREENSPAN, A YOU'RE NOT GOING TO BE ABLE TO ALLOW
  • 00:08:06
    NOT GOING TO BE ABLE TO ALLOW THE DEFICIT TO EXPLODE, OR
  • 00:08:08
    THE DEFICIT TO EXPLODE, OR YOU'RE GOING TO HAVE PEOPLE,E, U
  • 00:08:09
    YOU'RE GOING TO HAVE PEOPLE, YOU KNOW, BOND TRADERS THAT THAT ARE
  • 00:08:12
    KNOW, BOND TRADERS THAT THAT ARE GOING TO REBEL AND REVOLT
  • 00:08:13
    GOING TO REBEL AND REVOLT AGAINST YOU, AND INTEREST RATES
  • 00:08:15
    AGAINST YOU, AND INTEREST RATES ARE GOING TO U UP AND IT'S GOING
  • 00:08:16
    ARE GOING TO UP AND IT'S GOING TO BE A TERRIBLE CYCLE. BIBILL
  • 00:08:18
    TO BE A TERRIBLE CYCLE. BILL CLINTON SAID, YOU MEAN MY WHOLE
  • 00:08:19
    CLINTON SAID, YOU MEAN MY WHOLE DAMN PRESIDENCY IS GOING T TO BE
  • 00:08:21
    DAMN PRESIDENCY IS GOING TO BE HELD HOSTAGE BY BOND TRADERS?
  • 00:08:22
    HELD HOSTAGE BY BOND TRADERS? AND ALAN GREENSPAN BASICALLY
  • 00:08:24
    AND ALAN GREENSPAN BASICALLY SAID, YES, IT IS. HERE WE. ARE
  • 00:08:28
    SAID, YES, IT IS. HERE WE. ARE AGAIN IN 2025.
  • 00:08:30
    AGAIN IN 2025. >> WELL, THAT'S OBVIOUSLY THE
  • 00:08:33
    >> WELL, THAT'S OBVIOUSLY THE INTEREST RATES ARE ARE
  • 00:08:34
    INTEREST RATES ARE ARE IMPORTANT. AND, YOU KNOW,
  • 00:08:37
    IMPORTANT. AND, YOU KNOW, DISCRETIONARY SPENDING THOUGH IS
  • 00:08:41
    DISCRETIONARY SPENDING THOUGH IS RELATIVELY SMALL COMPARED TO
  • 00:08:44
    RELATIVELY SMALL COMPARED TO ENTITLEMENT SPENDING. AND I
  • 00:08:47
    ENTITLEMENT SPENDING. AND I WONDER, RAY, IF IT IS INDEED
  • 00:08:51
    WONDER, RAY, IF IT IS INDEED POSSIBLE, IN YOUR VIEW, TO GET
  • 00:08:56
    POSSIBLE, IN YOUR VIEW, TO GET TO YOUR 3% WITHOUT CUTTING
  • 00:09:01
    TO YOUR 3% WITHOUT CUTTING MEDICARE, MEDICAID, SOCIAL
  • 00:09:04
    MEDICARE, MEDICAID, SOCIAL SECURITY, WHICH YOU KNOW, I, I
  • 00:09:08
    SECURITY, WHICH YOU KNOW, I, I PERSONALLY WOULD HAVE PROBLEMS
  • 00:09:11
    PERSONALLY WOULD HAVE PROBLEMS WITH. BUT POLITICALLY THAT IS
  • 00:09:14
    WITH. BUT POLITICALLY THAT IS ESSENTIALLY A NONSTARTER. SO CAN
  • 00:09:17
    ESSENTIALLY A NONSTARTER. SO CAN YOU LEAVE THOSE PROGRAMS ALONE
  • 00:09:19
    YOU LEAVE THOSE PROGRAMS ALONE AND GET TO YOUR 3%?
  • 00:09:21
    AND GET TO YOUR 3%? >> THE WAY I DO THE NUMBERS I
  • 00:09:24
    >> THE WAY I DO THE NUMBERS I FUND, IF YOU COULD TAKE IT ABOUT
  • 00:09:27
    FUND, IF YOU COULD TAKE IT ABOUT A 4% CUT IN SPENDING AND A 4%
  • 00:09:33
    A 4% CUT IN SPENDING AND A 4% IMPROVEMENT IN TAX REVENUE, THAT
  • 00:09:35
    IMPROVEMENT IN TAX REVENUE, THAT YOU WOULD GET ENOUGH OF A
  • 00:09:38
    YOU WOULD GET ENOUGH OF A DECREASE IN THE DEFICIT, THAT
  • 00:09:41
    DECREASE IN THE DEFICIT, THAT YOU WOULD ALSO NATURALLY HAVE
  • 00:09:44
    YOU WOULD ALSO NATURALLY HAVE ABOUT 100 BASIS POINTS, MAYBE
  • 00:09:46
    ABOUT 100 BASIS POINTS, MAYBE MORE DECREASE IN INTEREST RATES.
  • 00:09:49
    MORE DECREASE IN INTEREST RATES. AND YOU'D GET VERY CLOSE TO THAT
  • 00:09:51
    AND YOU'D GET VERY CLOSE TO THAT THAT YOU HAVE TO. SO YOU HAVE TO
  • 00:09:53
    THAT YOU HAVE TO. SO YOU HAVE TO BRING IT IN THAT IN THAT ORDER
  • 00:09:55
    BRING IT IN THAT IN THAT ORDER OF MAGNITUDE. I'M NOT SAYING
  • 00:09:57
    OF MAGNITUDE. I'M NOT SAYING THAT THAT'S EASY, BUT IT'S A
  • 00:09:59
    THAT THAT'S EASY, BUT IT'S A POLITICAL QUESTION. I WHEN I GO
  • 00:10:01
    POLITICAL QUESTION. I WHEN I GO TO WASHINGTON AND I SPEAK TO
  • 00:10:03
    TO WASHINGTON AND I SPEAK TO PEOPLE ON BOTH SIDES, EVERYBODY
  • 00:10:06
    PEOPLE ON BOTH SIDES, EVERYBODY AGREES WITH WHAT I'M SAYING. I
  • 00:10:08
    AGREES WITH WHAT I'M SAYING. I MEAN, MEANING THAT YOU HAVE TO
  • 00:10:10
    MEAN, MEANING THAT YOU HAVE TO GET IT TO 3% OF GDP AND SO ON.
  • 00:10:13
    GET IT TO 3% OF GDP AND SO ON. BUT IT'S POLITICAL BECAUSE IT'S
  • 00:10:16
    BUT IT'S POLITICAL BECAUSE IT'S LIKE BEING ON A BOAT HEADED TO
  • 00:10:18
    LIKE BEING ON A BOAT HEADED TO ROCKS AND ON THE BOAT. EVERYBODY
  • 00:10:21
    ROCKS AND ON THE BOAT. EVERYBODY AGREES YOU HAVE TO TURN AND THEY
  • 00:10:23
    AGREES YOU HAVE TO TURN AND THEY CAN'T AGREE WHETHER YOU TURN
  • 00:10:24
    CAN'T AGREE WHETHER YOU TURN LEFT OR YOU TURN RIGHT AND
  • 00:10:26
    LEFT OR YOU TURN RIGHT AND THEY'RE GOING TO GO RIGHT INTO
  • 00:10:28
    THEY'RE GOING TO GO RIGHT INTO THE ROCKS. AND SO IT'S A
  • 00:10:29
    THE ROCKS. AND SO IT'S A POLITICAL QUESTION. I THINK THE
  • 00:10:32
    POLITICAL QUESTION. I THINK THE PERIOD FROM 1991 TO 1998 THAT
  • 00:10:36
    PERIOD FROM 1991 TO 1998 THAT ALSO JOE WAS REFERRING TO IS A
  • 00:10:38
    ALSO JOE WAS REFERRING TO IS A GOOD MODEL, PERIOD TO TAKE A
  • 00:10:40
    GOOD MODEL, PERIOD TO TAKE A LOOK OF HOW TO BEST DO IT AND
  • 00:10:42
    LOOK OF HOW TO BEST DO IT AND REALIZE THAT THE CONSEQUENCES OF
  • 00:10:44
    REALIZE THAT THE CONSEQUENCES OF NOT DOING IT ARE DISASTROUS.
  • 00:10:49
    NOT DOING IT ARE DISASTROUS. >> AND I WILL SAY, BEFORE I GOT
  • 00:10:53
    >> AND I WILL SAY, BEFORE I GOT TO WASHINGTON IN 1994, WE WERE
  • 00:10:56
    TO WASHINGTON IN 1994, WE WERE TOLD IT WAS IMPOSSIBLE TO DO. I
  • 00:10:58
    TOLD IT WAS IMPOSSIBLE TO DO. I COULD GIVE YOU ONE ARTICLE AFTER
  • 00:10:59
    COULD GIVE YOU ONE ARTICLE AFTER ANOTHER ARTICLE SAYING YOU
  • 00:11:01
    ANOTHER ARTICLE SAYING YOU COULDN'T BALANCE THE BUDGET. NOW
  • 00:11:03
    COULDN'T BALANCE THE BUDGET. NOW YOU CAN'T DO IT OVERNIGHT, BUT
  • 00:11:04
    YOU CAN'T DO IT OVERNIGHT, BUT WE HAVE TO MOVE IN THAT
  • 00:11:06
    WE HAVE TO MOVE IN THAT DIRECTION BECAUSE WE ARE GOING
  • 00:11:07
    DIRECTION BECAUSE WE ARE GOING TOWARD THE ROCKS, AS HE SASAID.
  • 00:11:09
    TOWARD THE ROCKS, AS HE SAID. AND THE QUESTION IS NOT WHETHER
  • 00:11:11
    AND THE QUESTION IS NOT WHETHER WE DO IT. IT'S HOW WE'RE GOING
  • 00:11:13
    WE DO IT. IT'S HOW WE'RE GOING TO DO IT. WE HAVE.
  • 00:11:14
    TO DO IT. WE HAVE. >> TO DO IT.
  • 00:11:15
    >> TO DO IT. >> THERE IS NONO OTHER CHOICE IN
  • 00:11:16
    >> THERE IS NO OTHER CHOICE IN THIS BOOK. THIS THIS SHOULD D BE
  • 00:11:18
    THIS BOOK. THIS THIS SHOULD BE MUST READING FOR EVERY MEMBER OF
  • 00:11:21
    MUST READING FOR EVERY MEMBER OF CONGRESS, EVERYBODY IN THE
  • 00:11:23
    CONGRESS, EVERYBODY IN THE ADMINISTRATION, EVERYBODY WHO
  • 00:11:24
    ADMINISTRATION, EVERYBODY WHO WANTS TO UNDERSTAND HOW
  • 00:11:25
    WANTS TO UNDERSTAND HOW IMPORTANT THIS ISSSSUE IS.
  • 00:11:26
    IMPORTANT THIS ISSUE IS. >> THE NEW BOOK, HOW C COUNTRIES
  • 00:11:28
    >> THE NEW BOOK, HOW COUNTRIES GO BROKE THE BIG CYCLE, IS
  • 00:11:30
    GO BROKE THE BIG CYCLE, IS AVAILABLE NOW. BESTSELLING
  • 00:11:32
    AVAILABLE NOW. BESTSELLING AUTHOR AND INVESTOR R RAY DALIO,
Tag
  • national debt
  • federal deficit
  • Ray Dalio
  • debt mechanics
  • government spending
  • interest rates
  • economic cycle
  • deficit reduction
  • bipartisan issue
  • financial stability