Ray Dalio

So if you're having, let's say, cost cuts in government, You have to own the number. So everybody's got to pledge 3%. Now, there'd be arguments as to how to get there. But you have to own the number, so much so that you'd say, if it's not 3%, throw me out of office because I've got to deliver that number. So if somebody, if government cost, expense, cutting...

You know, is it really the two trillion number? Is it the one trillion number? Is it a half a trillion dollar number? We all throw those numbers around. You got to own the number and you got to get to three. And you can't make it any one thing. Right. But you also have to realize, like, if you did it spread out, nothing is going to be that big. So, I mean, nothing's going to be insurmountable.

You know, is it really the two trillion number? Is it the one trillion number? Is it a half a trillion dollar number? We all throw those numbers around. You got to own the number and you got to get to three. And you can't make it any one thing. Right. But you also have to realize, like, if you did it spread out, nothing is going to be that big. So, I mean, nothing's going to be insurmountable.

That would mean I go through the numbers in the book. By the way, this book is online free. And everybody can get it.

That would mean I go through the numbers in the book. By the way, this book is online free. And everybody can get it.

This is being put out. not to sell books. Anyway, it's all free, so everybody can go through the mechanics. But the main thing is you take the things you can cut from or build from. So what can you cut from? And you look at government expenditures. Roughly 70% of government expenditures are you can't cut.

This is being put out. not to sell books. Anyway, it's all free, so everybody can go through the mechanics. But the main thing is you take the things you can cut from or build from. So what can you cut from? And you look at government expenditures. Roughly 70% of government expenditures are you can't cut.

So it comes down to a small percentage that you can cut, but you find out how much can you cut. So the important thing is 3%. The other thing about it is to realize that if you make those moves, the bond market will benefit. You see, and so interest rates- And then interest rates will go down. Right. And interest rates going down, interest rate expense is most important.

So it comes down to a small percentage that you can cut, but you find out how much can you cut. So the important thing is 3%. The other thing about it is to realize that if you make those moves, the bond market will benefit. You see, and so interest rates- And then interest rates will go down. Right. And interest rates going down, interest rate expense is most important.

He's right. If you look at my calculations, you need 100 basis... If you get 100 basis points cut in rates, that's equivalent to significant cutting in spending. So he's right. But if you do that without... the other parts, you're gonna take money away, you're gonna make it less desirable to own these things, these bonds. Because that's gonna be a problem.

He's right. If you look at my calculations, you need 100 basis... If you get 100 basis points cut in rates, that's equivalent to significant cutting in spending. So he's right. But if you do that without... the other parts, you're gonna take money away, you're gonna make it less desirable to own these things, these bonds. Because that's gonna be a problem.

Where if you do these things together, they can support each other. So in other words, fine, cut it from spending.

Where if you do these things together, they can support each other. So in other words, fine, cut it from spending.

Yes, and you can do it in a manageable way, you know, a bit here, a bit there, these bits add up. And if you don't, you're going to have this arc of compounding.

Yes, and you can do it in a manageable way, you know, a bit here, a bit there, these bits add up. And if you don't, you're going to have this arc of compounding.

There's a combination of a question. It's not just Doge. It's a matter of less regulation, productivity changes that might come from AI, which then translate to profits. That might be capital gains profits. They might be profits and all of that. And so... But it really, you know, when I look at it, it looks very tough. But there's also, you know, revenue also, tariffs produce revenue.

There's a combination of a question. It's not just Doge. It's a matter of less regulation, productivity changes that might come from AI, which then translate to profits. That might be capital gains profits. They might be profits and all of that. And so... But it really, you know, when I look at it, it looks very tough. But there's also, you know, revenue also, tariffs produce revenue.

So, but yeah, people think on the tariffs, people don't think of taxes as inflation, but taxes are inflation. Right. Because it costs you more. So-

So, but yeah, people think on the tariffs, people don't think of taxes as inflation, but taxes are inflation. Right. Because it costs you more. So-

The real question, as you play with the numbers, is it's very, very difficult to know and be precise about how much is going to come from productivity and profit increases, from the efficiencies gained by AI and new technologies, how much is going to come from this and that. We don't honestly know. But the important thing is not to, we're at the edge, and not to make it a crapshoot.