‘Economic heart attack’: Ray Dalio sounds alarm on US debt
Washington has to immediately commit to cutting the deficit or face the risk of a major debt crisis within the next three years, billionaire investor Ray Dalio, founder of Bridgewater Associates, told Bloomberg on Monday. The bearish outlook stems from the US federal budget deficit, which rose to $1.8 trillion in the last fiscal year, ending September 30, 2024.
The staggering figure marks the third-largest federal deficit in US history, after the record-breaking pandemic relief-driven deficits of $3.132 trillion and $2.772 trillion in 2020 and 2021, respectively. For comparison’s sake, the GDP of France was approximately $3 trillion in 2023.
“If you don’t do it, you’re going to be in trouble,” the billionaire suggested in the outlet’s weekly ‘Odd Lots’ podcast.
“I can’t tell you exactly when it’ll come, it’s like the heart attack,” he emphasized. “You’re getting closer, my guess would be three years, give or take a year, something like that.”
The billionaire insisted that “there’s a solution here” that’s “doable” to address the government deficit and an impending debt crisis. US national debt currently stands at $36.2 trillion, according to the Treasury Department. It crossed the $35 trillion mark for the first time last summer.
Dalio’s comments come as the administration headed by US President Donald Trump is working to pass a massive tax cut bill that would also include funds to increase spending on defense and immigration enforcement.
Last week, the US House of Representatives narrowly passed a budget framework designed to cut up to $2 trillion in spending and allow up to $4.5 trillion in tax cuts over the next 10 years. The budget plan would also raise the statutory debt limit by $4 trillion.
This reminds me of the old Hank Snow song - "Doing 90 miles an hour down a dead-end street". Only here, the (debt) brakes are being weakened by 10%. Is that a good thing? I don't think so.
According to Dalio, the projected deficit will be about 7.5% of the country’s gross domestic product, once Trump’s tax cuts take effect. The billionaire investor urged for it to be cut to 3%, adding that it would “mean that debts won’t rise relative to incomes, and it will greatly improve supply and demand.”
Why are they increasing the military budget when they are negotiating peace and forcing NATO countries to buy their War Industry inventories? This should be a time to reduce the insane amounts spent on the military.
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Germans will also take their foot off the 'debt brakes'. Most of that differential will end up in the pockets of American War Industry oligarchs and do no good to any country.
German coalition unveils plans to up defense spending to at least $120B a year by 2030
March 5 (UPI) -- Germany's government-in-waiting unveiled a plan to boost defense spending by hundreds of billions of dollars by the end of the decade by relaxing strict so-called "debt brake" rules enshrined in its constitution, in part due to recent moves by Washington.
Friedrich Merz's Christian Democrats, which won the largest share of the vote in elections on Feb. 23, working with the Social Democrats, said Tuesday they planned to ask parliament to exempt defense spending above 1% of GDP from rules that require the country's structural budget deficit does not exceed 0.35% of GDP.
Following exploratory talks, the CDU and SPD said they aimed to rush through the plan before the new parliament is formed in an unprecedented effort that would see defense spending jump to as much as $120 billion a year by 2030, paid for by stronger economic growth from a $535 billion stimulus package.
"In view of the threats to our freedom and peace on our continent, 'Whatever it takes' must also go for our defense now," Merz said.
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Trump, and NATO, have the entire continent in a complete panic with absolutely no evidence that Russia is in anyway interested in expanding into Europe.
European Union announces $841B plan to rearm to defend itself, Ukraine
March 4 (UPI) -- The European Union on Tuesday unveiled a $841 billion "ReArm Europe Plan" using all the financial means at the continent's disposal to help member states urgently ramp up defense capabilities, both to meet immediate threats and through the remainder of the 2020s.
The proposal to unleash state funding by triggering emergency measures exempting governments from strict deficit spending rules, calls for member states to up their defense budgets by 1.5% of GDP, equivalent to $683.5 billion over four years, and $157.5 billion in defense investment loans, European Commission President Ursula von der Leyen said in a statement.
When it is all over, I hope they will sit down and count the trillions of Euros that the Ukraine war cost the EU. A proxy war between NATO (read USA) and Russia in a country that doesn't belong to either the EU or NATO. One of the world's most corrupt countries, a country with a Russian history.
Speaking in Brussels after the United States said it was cutting off all military assistance to Ukraine, von der Leyen said events had moved beyond questions of the true threat level facing Europe, or if it should take greater responsibility for its security, to whether it was ready and able to respond "as the situation dictates."
She said the answer from a series of emergency summits in European capitals, most recently in London on Sunday, was unanimous agreement that a colossal increase in defense spending was necessary.
Think outside the box, Ursula, your paradigm is much too small. There are many ways to secure peace that don't require bankrupting the EU and would leave money to actually invest in good things instead of new ways to kill people. Joint investments with Russia would be a good starting point.
"We are in an era of rearmament. And Europe is ready to massively boost its defense spending. Both, to respond to the short-term urgency to act and to support Ukraine but also to address the long-term need to take on much more responsibility for our own European security," said von der Leyen.
The $157.5 billion of loans was designed to create a "pan-European" capability in which states "spend better" by pooling their purchasing power and developing joint air, missile and drone defense systems, missiles and attack drones, as well as cyber warfare systems, enabling them to "massively step up their support to Ukraine," she said.
And developing ways to kill people will be the fastest-growing industry in Europe. Is that how you see Europe, Ursula? Perhaps you need to step down in favour of someone with a little imagination.
"Joint procurement will also reduce costs, reduce fragmentation increase interoperability and strengthen our defense industrial base. And it can be to the benefit of Ukraine," von der Leyen said. "This is Europe's moment, and we are ready to step up."
It's a step down, Ursula, a big step down.
Von der Leyen said Brussels would provide incentives to encourage states to increase defense by allowing them to use money from its "cohesion policy programs" budget, which is set at $412 billion for the current 2021-2017 period.
The plan would also tap private capital via the European Investment Bank and by speeding up the creation of the Savings and Investment Union which aims to a single financing market within the EU with no internal borders.
The initiative comes amid a rapidly evolving new realpolitik in which Europe faces having to shoulder a much larger share, if not all, of the responsibility for its security, but also providing all of Ukraine's military requirements to stay afloat in its struggle with Russia, and figuring out how to pay for it all.
The continent has been diverting interest on more than $210 billion of frozen Russian assets to help pay for Ukraine's defense, but British Foreign Secretary David Lammy is pushing for Europe to go further and seize the assets and hand it to the United States to buy the advanced U.S. military equipment, support and logistics so essential to Ukraine's military viability.
Liberal (read Labour) proverb: "The Ends Justify the Means". In other words, criminal activity is good if you get your way in the end. This is godlessness and evil.
However, the proposal is opposed by French President Emmanuel Macron, German Chancellor Olaf Scholz and the European Central Bank. They fear it would establish a damaging precedent in breach of internationally observed protections of sovereign assets and create a chilling effect on eurozone investment, scaring off potential big investors like Saudi Arabia and China.
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Is Tusk really this dumb, or does he have some vested interest in the War Industry?
EU must win arms race – Poland
The EU must escalate its military buildup and win the arms race against Russia, Polish Prime Minister Donald Tusk has said. This comes amid growing efforts by EU leaders to increase defense spending, citing what they describe as a threat from Moscow, which Russia has repeatedly denied.
Tusk’s remarks also come as US President Donald Trump and his administration increasingly push European NATO members to take greater responsibility for their own defense. Washington has suggested that Europe should rely less on US military aid, particularly regarding Ukraine, and instead ramp up its own military spending.
In a message posted on social media on Thursday, Tusk accused Moscow of starting a new arms race and insisted that Europe must respond.
“The war, the geopolitical uncertainty and the new arms race started by Putin have left Europe with no choice. Europe must be ready for this race, and Russia will lose it like the Soviet Union 40 years ago,” Tusk wrote, adding that from today, Europe will arm itself faster than Russia.
Did Putin start the arms race? According to Mother Merkel and Francois Hollande, Europe agreed to the Minsk Accord in 2014 for the sole purpose of buying time for Ukraine to build up its military. Consequently, it was Europe and NATO that started the arms race 8 years before Russia attacked Ukraine.
His comments follow recent statements by French President Emmanuel Macron, who has claimed that Russia poses a threat to the EU. Macron has urged the bloc to increase defense spending and has also proposed expanding Europe’s nuclear deterrence, potentially extending France’s nuclear umbrella to other EU countries in response to the perceived risks from Moscow.
Moscow has dismissed the accusations that it poses a military threat to Europe and has condemned Macron’s latest statement as “highly confrontational.” Russian President Vladimir Putin called Western claims of an impending Russian attack “nonsense.” He has also accused European leaders of stoking tensions and using the perceived Russian threat as a pretext to justify increased military spending.
In December, Putin also stressed that Russia does not want to be bogged down in an arms race, which would be detrimental to the social and economic development of the country. He warned, however, that Russia will take all necessary measures to ensure the security of itself and its allies.
And that seems to be the most sensible voice in Europe. And, no, I'm not a Putin fan, just a truth fan.
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