| In 10 years, the US government will be $55-60 trillion in debt (which will be 7-7.5 times government revenue) because there will be $25-30 trillion of additional borrowing. That amounts to about $425,000 of debt per American family. When I calculate the supply and demand for this debt, I don’t see enough buyers to buy the debt the US needs to sell, which will cause big problems. We can avoid the worst-case scenario, but we need to act now. To learn more, I encourage you to read my new book, How Countries Go Broke: The Big Cycle. #raydalio #principles #economics #debt |
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How Japan Dealt With Their Debt Problem
2025-07-18
What happens when a country mismanages its debt?
In 1990, Japanese policymakers decided to deal with its debt obligations by printing a lot of money to buy bonds. They further devalued the currency by giving bondholders significantly lower interest rates than in the US.
As a result, Japanese bonds lost 45% relative to US bonds and 60% relative to gold over the next few years.
That had a real impact on the average Japanese worker, who lost a significant amount of buying power — and those impacts are still felt today.
My new book, How Countries Go Broke: The Big Cycle, breaks it all down for you.
#raydalio #principles #politics #economics
The Challenge of Absolutist Politics
2025-07-02
After spending time in Washington, DC discussing the budget deficit with senior people on both sides of the aisle, it’s clear to me that we are unlikely to change the debt trajectory we’re on and avoid the painful consequences.
While virtually everyone agrees on the need to address our debt problem in a balanced way that includes tax increases and cuts to benefits, they also agree that they cannot speak up because politics have become absolutist.
We must find a solution around absolutist pledges like, ”I will not raise taxes,” or “I will not reduce benefits,” when they are desperately needed.
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