Why Ray Dalio Says The Debt Limit Is A Farce
Ray Dalio, the founder and CIO of hedge fundBridgewaterAssociates,believes what is called the debt limit never actually limits the debt, but is in fact a farce.
What Happened:Its a farce that works like a bunch of alcoholics who write laws to enforce drinking limits, and when a limit is reached, they do a farcical negotiation that temporarily eliminates the limit which allows them to have the next drinking binge until they reach the next limit at which time they go through the next farcical negotiation and continue to binge, Dalio wrote in a post titled The Farce and Consequences of the Debt Limit and the Debt onLinkedIn.
"I gather that this is the 79th farcical negotiation that has taken place," he said.
Dalio also wondered whether this ritual shows the people running the political system lack discipline. I think it makes clear that the long-term prognosis is for the debt bingeing to go on until a crisis ends this dynamic. However, most people seem comforted that the debt limit wont trigger a debt default and dont worry about the debt bingeing continuing, he said.
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