The Collapse of America & Everything Wrong With Society Today ( A Hopeful Way Forward) | Ray Dalio

looking at the US and um I don't want to be cheeky and say speaking directly to uh the you know the US government but if I were to be so bold so if this is that predictable moment where okay there are actions that we can take as a country that will either um help us keep um the world Reserve currency status and there are actions that we can take that will cause us to lose that status more quickly it seems like okay uh you've got the brics Nations they are moving away from the dollar it

seems like that has already that card has already been played I don't know if you think there's anything that we can do to to make that easier um but certainly speaking to printing so one thing that I've I've heard recently and this is a really fascinating concept that when you have other nations that are holding your currency holding debt as you said they're not like hoarding cash but they're they're holding a lot of debt if we print money what we're essentially doing is um externalizing inflation so we are uh causing a devaluation of that debt

for all the countries that hold us now we're in a moment with Rising interest rates that's causing us to need to print uh but creating this really weird difficult moment where as we print then we have a need to raise interest rates but the reason we're having to print is because we're raising interest rates so it's it's a very difficult moment um but if if we could going back to your idea it's how we are with each other if we could get people to come together in the middle would one of the things we would

want to convince the US government to do is to be very cautious about devaluing the dollar is is that an important idea it's more basic than that and it's um more simple but it's also more difficult [Music] um what the reason Cycles exist is that the next stage has been determined by what has already happened in the prior stage so we are in debt a lot you you can't change that we got a lot of debt and if you say what could you do I mean two things come to mind what you could do is

you could be financially strong and you can not use um Financial sanctions as a weapon to scare the holders of those bonds but to be financially strong requires you to not spend more than you earn that means you either have to cut your spending or raise your earnings okay okay that's okay that ain't easy okay okay so are we going to cut our spending um uh um okay now you look at it what are you g to uh infrastructure programs I don't know poverty transfers defense spending okay what what are we going to cut um

the world governments have the same basic economics as um people except for the fact that they can take money from one person and Sh give it to another and they can print money that's it and so when you look at this um okay you have that Gap you can eliminate the Gap by taking money from some and eliminating another and not spending much okay okay that's not easy right okay okay what are you going to the most governments now uh don't think how much money do I have to spend and then how do I prioritize

that they think I need to spend on this I need to spend on that and I need to spend on that and they spend on it and then they either produce a they produce a deficit it and then you either have to pay it back with hard money or printed money and that's situation so when you say what could we do well you've got to get financially strong in a politically fragmented environment in which everybody wants more and you and you have to um you know like be a higher percentage of World Trade so that

everybody wants to use your currency and um be um and not threaten the holders of that bonds with freezing their assets it is uh it's a tall order in this moment um I it has become so clear to me in the last month since you and I uh saw each other how important the reason that you keep coming back to it all comes down to how people treat each other so in this moment um I don't want to be a Debbie Downer but it does feel like the die is cast a little bit I don't

see how we pull ourselves back from the precipice because to your point about being um fiscally responsible like we'd have to get into a position where we're making more than we spend I want to circle around to something as you were talking you mentioned infrastructure and it got me thinking about okay what are things that uh we would need to go right so I think everybody is aware and I've heard you say that there there are changes that are going to need to be made to capitalism in order to bring back a thriving middle class

and the importance of the thriving middle class and you've defined the things you know again staying to the theme of principles here of uh the three things that we need to do to be strong as a country or for any country to be strong uh and you said two parents in the home uh great public education and then equal opportunity where where do you see us on those are we moving in the right direction moving in the wrong direction well again uh you know maybe I Aspire too much to two parents in the home um

it's certainly better if you have two loving parents raising a family that's that's good but maybe that's too much to ask for um but in other words good Parental Guidance you know okay you're raised well you're educated well you can go to a public school that educates you well and you have good guidance so you're well raised in a healthy environment and not only do you learn um you know skills and and all that but you learn how to behave well to with each other so you learn Civility and um and um so you come

out capable and civil um to a land of opportunity in which you can you know work and and and have a good environment um and really that's all you need if a society does that right um and I think you know where we you know the things that are going on you know um education in a lot of public education is um a it's deteriorating it's a real problem um my wife works to help um the poorest school districts the poorest people uh in the state of Connecticut um and uh the state of Connecticut is

usually it's always one two or three in terms of the highest per capita income um and in the state of Connecticut uh as of the last survey 22% of the high school students have either dropped out of High School whoa or or have uh absentee rates which are greater than 25% in are failing classes so at they're living in po they're living in areas that don't have the things I'm talking about about parents nutrition and so on um and there's not adequate resources for them for example during covid um we um we found that 60,000

students didn't have uh computers or connectivities to take classes and the government wasn't going to provide it so philanthropically we we bought 60,000 computers and give it to the kids and but we can't you know we can't do the you know so our society is um when you look at this um you see um drugs drug problems um you see how the cities are changing um you know the cleanliness of the Cities the education levels of the Cities mental illness um crimes and so on um you're not seeing you know you're seeing people fighting with

each other a lot um not all the time there are wonderful places in the United States you know education some of the best universities their pockets some of the you know their neighborhoods but there is this encroaching so you see infrastructure breaking down um school shootings I don't you know like okay so you decide how are we doing I think we're doing pretty badly um it I I don't know look it's not going to be a popular thing but I think going back to what you were saying about the parents and maybe asking for two

people is too much look I get it I think everybody's doing their best and and God knows for any single parents out there you have my love and respect that it just seems Seems like a hard job when there's two of you let alone one so I'm not I'm not throwing shade but in terms of cultural moment momentum when I look at people not uh not getting married before they have kids uh incentives that end up leading people to where it's actually more economically advantageous to have a child when you're single uh does not strike

me as a great idea uh and trying to reverse that Trend I think is going to be really important really putting a ton of time and energy into making sure that we're we are looking at ourselves on a global stage from an educational stand point and understanding that we are competing against I mean just to really make it Stark we're competing against China now I have employees that grew up in China I actually have some contractors that are in China currently and when I see the the discrepancy of what demands the educational system places on

them when they're young versus the demands that we place on our our students when they're young it creates a ripple effect as they get into the workforce in terms of just the the expectations that they have of themselves the drive uh the desire to excel um so these strike me as as really really problematic things I'd love to talk to you about Singapore so as we're talking and I haven't studied Singapore very closely but when I think about um you know how they've created something that seems really amazing very recently and and sort of born

up out of nothing is it those three principles uh two parents in the home quality education equal opportunity I mean is that it or is there something else earn more than you know earn more than you spend be well educated to help you earn more that you said be civil with each other be productive um you know when you come out equal opportunity and and um it's not just um like in Singapore uh but it's true in other countries there's a level Bel below which nobody should go certainly children should not go right how can

you have an environment that children there so there should be basics of housing um Health Care um certain Basics uh because otherwise you build a cycle you you know I mean when they become When the Children become adults you might say oh it's up to them to do it but if you mess up the children early they become the adults who can't do it and so you have this cycle you know in which you have to take care of people you know you walk around and look at it you can see the gaps the opportunity

gaps you can see the mental illness gaps you you know walk down the street and you know downtown Manhattan or lots of places and see the gaps okay and some that adult who is screaming uh you know and homeless and whatever came from a place a reason you know that was the made him that way and um you know so it's like the you know why isn't the computer given to the kid who doesn't have a computer so he can have learning think about how difficult it is for the for the kid who doesn't have

learning and they have one parent and that parent might have in a poverty and might have drug problems and all that I mean the kid can't make it so the kid's going to come up to be an adult okay what kind of an adult is it's going to be a problem so I know that a lot of people are going to say okay well raise taxes we'll have money for all of that um that doesn't seem to be how things work but I'm open to being wrong about that there's a book coming out I'm very

interested to read called taxes have consequences which I don't think people think a lot about but it is entirely possible that I'm wrong so if we look at someone like Singapore do they just have really high tax rates and they distribute it in a way that makes sense what they did was um they required savings they require it require savings an employee um I think an I think it works like this um employee gives um 12% of their incomes an employer gives 22% H 10% of their income so they saved um um something like 22%

of their income is in savings okay they do other things too they have a tax balance but they have a savings um and as a society they earn more than they spend okay so and then um on housing for example they have um a public housing that um is uh subsidized that the person can take their savings uh with to use to buy that public housing that is a s saving through that saving so um everybody has good housing good public housing um and they own it so if it goes up in bre value they

can sell it and and so they have that so the housing creates a good environment they put a lot of money into education equal education it's not people there uh don't have to go to a private school to get good education they so they have good education and they so and then they have uh the people who work hard and are civil with each other and that's how it works and it forget about Singapore if you look through history um these are these are basic fundamental things so and so wherever they've happened in history um

uh they've worked and you can go back through all history if you uh you know these Basics earn more than you you sp uh um you know be well educated uh be civil U be productive um you know those types of things that uh those fundamentals work what is it about the human personality that makes it so common that people don't deploy those things it's so interesting to me because I found that when people get richer the societies get richer they typically get in more debt which seems backwards like um so for example I I

watched uh the first time it happened when the United States started borrowing money from J from China uh the United States had income that was 40 per capita income 40 times those from China and they're borrowing money from China so I wonder like how does do that really happen and there's um when you don't have much money and you're in a stage of life where uh you you know you value money you want to save so there's a psychological thing you don't have much money you get some money man you want to save it and

to save it means you have to lend it to somebody then what happens is ironically when everybody earns more money and it's easy to borrow people will get in in debt or a society will get in debt or the government will get in debt and also then there become very big wealth gaps and people basically are interested in taking care of their themselves and so um you don't have you have a fight over taxes or something and so you have a society that borrows just even think the political system cycle people pay if you're um

a new politician and you run a state or you run let's say a state and it's before an election it's in your interest to borrow and spend because nobody pays any attention to the borrowing where the money comes from they pay attention to the spending so give them stuff you know um go spend give them stuff have a party it's like having a party on debt and there's this shortsightedness it's like the you know raising kids they call it the marshmallow test you know uh you know you ask a kid in an early uh early

early age I can give you one marshmallow now or I can give you two marshmallows in 15 minutes which would you prefer and um okay the smart one says um I can defer my gratification for 15 minutes and get to marshmallows um we have a lot of society who wants the mar it now so is it um enjoyable to take your money and spend it on better infrastructure um or let's take the education system the education system according to the Constitution is a State decision so it's not federal not mostly Federal money then you come

down to um the state and it's mostly a tax District if you're in this neighborhood through property taxes and so on you will get the money to educate your children in that tax District so naturally um richer tax districts will have better money and so like I'm in um Greenwich Connecticut and um last numbers I looked I'm sure they're higher than this now but it was not that long ago is in Greenwich Connecticut it was uh $224,000 per student in um uh Bridgeport Connecticut which is like 10 minutes up the road it's $14,000 per student

whoa and they need more money because they're they're poor so so if you just take it's not just education how do you clothe the kid how do you feed the kid how do you give them the computer that doesn't come through the school and all that they need more not less budget so those are the mechanics of it first you have to go to bipartisanship um like if I was President I would have a bipartisan cabinet and then if I was dealing with the economic problems I'd get smart people from the right and smart people

from the left who want to make this thing work and I'd put them into like a Manhattan project kind of thing in other words put them into uh six months in which they have to agree on a system that's going to work tie them together and force them to agree and come out with that and have them gain control over the extremists who are going to fight like I don't really care exactly how it works just as long as you know like if smart people from both sides can get together and make it work and

then you come back to these Basics you know okay how do you spend more earn more money than you spend how do you educate your children well whether or not you know and deal with those project problems that way to in a together way um you'll get the best outcome if you don't do that you won't get the best outcome yeah I think this is this is really brilliant if you like that clip check out the full powerful episode here and I'll see you there