How Countries Go Broke: Principles for Navigating the Big Debt Cycle, Where We Are Headed, and What We Should Do

How Countries Go Broke: Principles for Navigating the Big Debt Cycle, Where We Are Headed, and What We Should Do is an urgent warning about the global economy from Ray Dalio, the #1 New York Times bestselling author of Principles. It addresses questions that have long preoccupied politicians, policymakers and investors, including whether large government debts threaten collective well-being, whether there are limits to debt growth, and what it could mean for a major reserve-currency country such as the United States to go broke.

Dalio sets out his detailed explanation of what he calls the “Big Debt Cycle”, shared here for the first time. He argues that understanding this cycle is critical for helping policymakers, investors and the general public grasp where the debt issue stands and where it may be heading, and his model points towards straightforward solutions for the debt problems faced by the US, Europe, Japan and China.

Key details

• Author: Ray Dalio
• Explores the “Big Debt Cycle” and its implications
• Considers government debt, debt growth and reserve-currency risk
• Connects debt issues with political, geopolitical, natural and technological forces
• References AI as a key technological factor

Synopsis

Dalio examines how major debt problems develop and why they matter, offering a framework for understanding what he calls the “Big Debt Cycle”. He links these pressures to wider forces shaping the world order, including political dynamics within countries, geopolitical tensions between countries, natural events such as droughts, floods and pandemics, and technological change, with particular emphasis on AI.

The book sets out where Dalio believes we are in these cycles, where we may be headed, and what should be done in response.