“There will have to be a resolution to the system that works for most people where there is productivity,” Dalio told CNN’s Poppy Harlow in an interview Tuesday. “And that could be achieved either in a smart, bipartisan way – or it will come through a bigger conflict.”
Nearly 8 million Americans joined the ranks of the poor in June, according to researchers at the University of Chicago and the University of Notre Dame. More than 27 million adults were in households that “sometimes or often” experienced a lack of enough food to eat in the past seven days, according to a census survey.
At the same time, the 2020 election – and President Donald Trump’s efforts to undermine the results – have deepened political wounds.
“We have studied the last 500 years of history and cycles and these things are always repeated,” said Dalio. “Large wealth gaps, with high values, at the same time, because there are a lot of debts and an economic recession produces conflicts and vulnerabilities.”
The interview was conducted last week before Dalio’s 42-year-old son was killed in a car accident.
The compromise is not so bad
Dalio, who founded Bridgewater Associates in 1975 and now serves as co-chair of the hedge fund, urged political leaders to find a middle ground to address the nation’s unsustainable inequality issues.
“In order to bring the country together and not have a form of civil war … there must be a reunion of the country – but in a smart way,” Dalio said.
Despite speaking in such strong terms, Dalio stressed that he did not want the Americans to “panic.” Instead, it tries to make it clear to voters and leaders that compromising with political opponents can be difficult, but it is not the worst result.
“The worst alternative is for one side or the other to say, ‘This is no longer my country. This is not my population,'” he said. “Then the cause of the people is more important than the means of resolving the disagreements. This is a threatening situation. History has shown that this is the case.”
“Extraordinary inequity”
And yet, parts of the US economy are booming. Homes are on fire, technology companies are making money, and stock prices have never been higher.
“This Covid-19 crisis has worsened, but it has also removed the caps of extraordinary inequity in our society and around the world,” Rockefeller Foundation President Rajiv Shah told CNN Business in a recent interview.
“We have seen that wealthy families and communities are doing quite well with the digital acceleration and high asset values allowed by low interest rates and weak monetary policy,” Shah added. “And we’ve seen working families in America and around the world suffer dramatically.”
Repairing the American dream
Dalio said the United States must address the issue of investment inequality in the future. He stressed the need to increase productivity by improving healthcare, infrastructure and especially education.
“If we do not have broad productivity and jobs, which come from education and employment programs and so on, then we will have a continuation and a worsening of the great polarity and I think it will be a problem,” he said. said.
For example, Dalio pointed out that some students do not have access to computers or high-speed internet.
“Not having connectivity today and not having a computer is like not having water or electricity or a phone 50 years ago,” he said.
Of course, investing in education and infrastructure costs money, and the United States is already facing massive budget deficits.
“It’s a complicated question, because as you increase this tax, you want to do it in a smart way, which also doesn’t lead to money in the wrong things,” Dalio said.
Although Dalio did not support a specific tax rate, he said that “it must be well designed and it must be more”.
However, the billionaire stressed that radical changes will have to come in the US system – sooner rather than later: “There is a polarity and a situation of debt and circumstances,” he said, “in which it will probably have to be revolutionary – changes of type. “