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3471Bridgewater founder Ray Dalio was open in a recent appearance on CNBC’s Squawk Box. While discussing tariffs and the U.S. economy, he highlighted what he sees as a much deeper issue: America’s long-term productivity crisis.
“Sixty percent of the population has below a sixth-grade reading level,” Dalio said. “It’s tough to be productive” with that kind of foundation, he added.
That comment came during a wide-ranging conversation where Dalio warned that the U.S. is facing a rare convergence of major challenges. According to him, the country is going through a breakdown of three key systems: the monetary order, the political order, and the global order.
“This sort of breakdown occurs only about once in a lifetime,” Dalio said. “But they have happened many times in history when similar unsustainable conditions were in place.”
A Bigger Problem Than Tariffs
The conversation began with tariffs, but Dalio quickly shifted focus. To him, tariffs are a symptom of much deeper economic imbalances, particularly between the U.S. and China. He said the country faces “tremendous capital imbalance and a tremendous trade imbalance,” which he believes are unsustainable.
When asked how tariffs affect the economy, Dalio said simply: “It raises costs, it lowers revenues for companies, and capital is going to be harder to come by.”
He acknowledged the need to reduce dependence on imports and rebuild U.S. manufacturing, but questioned whether the country is structurally ready to do that. “I agree with the problem,” he said, but added that he’s “very concerned about the solution.”
Innovation vs. Inequality
Dalio painted a picture of two Americas. On one hand, he said about 1% of the population is highly innovative, producing most of the country’s technological breakthroughs—and half of them are immigrants. On the other, he said a large chunk of the population is struggling with basic literacy.
That inequality, he argued, makes it harder for the country to boost productivity and compete globally. “We have a population that basically 3 million people, 1% of the population, is incredibly brilliant,” he said. But for the rest, he added, “it’s tough to be productive.”
He pointed to too much debt, rising political polarization, and the unraveling of the international system built after World War II.
He also mentioned that forces like climate change, pandemics, and rapid technological shifts are adding to the disruption. All of it, he said, adds up to a world in transition.
“We’re in the process of changing that order,” Dalio said.
Despite the challenges, he didn’t dismiss the issues as unsolvable. But he stressed that the solutions are going to be complex, long-term, and far from easy.
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