Tags: ray dalio | wealth | inequality | conflict | rich | poor

Ray Dalio: Wealth Inequality to Spark 'Conflict' Between Rich, Poor

Ray Dalio: Wealth Inequality to Spark 'Conflict' Between Rich, Poor
(Dollar Photo Club)

By    |   Thursday, 01 August 2019 09:07 AM

Hedge-fund guru Ray Dalio reportedly predicts that the U.S. wealth gap will trigger a “conflict” between the rich and poor if the economy doesn’t change.

“We’re at a juncture. We can do it together, or we will do it in conflict, that there will be a conflict between the rich and the poor,” the billionaire recently told CBS’ “60 Minutes.”

“I think the American dream is lost,” Dalio said, because the U.S. economy isn’t “redistributing opportunity,” said Dalio, who Forbes lists as the 57th-richest person in the world with an estimated fortune of $18.4 billion from founding hedge fund giant Bridgewater Associates.

“Capitalism needs to be reformed. It doesn’t need to be abandoned. So, like anything, like a car, like anything, a plane, a school system, anything, it needs to be reformed in order to work better,” Dalio said.

“If you look at history, if you have a group of people who have very different economic conditions, and you have an economic downturn, you have conflict,” Dalio says. ” I’m not saying we’re going to go there. I’m saying that right now — it’s a huge issue, it’s unfair...it’s unproductive, and at the same time, it threatens to split us.”

Dalio stressed many of the same points he made earlier this year in a report.

In that Arpil report, Dalio advocates for an increase in investments in early childhood education, per-pupil spending, infrastructure, and public health measures in order to save it.

Chief among Dalio’s criticisms are the widening wealth gap in the United States, which he links to lower high school graduation rates, greater disparity in test scores, and lower teacher pay compared with those with similar education levels over the last three decades, Reuters reported.

“To me, leaving so many children in poverty and not educating them well is the equivalent of child abuse, and it is economically stupid,” Dalio wrote.

To be sure, ratings firm Moody's warned late last year that widening income inequality will likely hit the U.S. government’s top-notch credit rating as it struggles to contain political and social divisions at a time when deficits are on the rise.

Moody’s however maintained its “AAA stable” rating on U.S. debt. Only one of the three big ratings agencies, Standard & Poor’s, has downgraded the U.S. to “AA+” over a 2011 debt ceiling showdown and “political brinkmanship” in Washington, Reuters reported at the time.

Rising inequality “is a key social consideration that will impact the U.S.’ credit profile through multiple rating factors, including economic, institutional and fiscal strength,” Moody’s said in a report. It would also likely boost government spending to support lower-income households, “which is unlikely to be offset by revenue raising measures following recent tax cuts.”

Material from Reuters has been used in this report.

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Hedge-fund guru Ray Dalio reportedly predicts that the U.S. wealth gap will trigger a “conflict” between the rich and poor if the economy doesn’t change.
ray dalio, wealth, inequality, conflict, rich, poor
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2019-07-01
Thursday, 01 August 2019 09:07 AM
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