Free book: "Principles for Navigating Big Debt Crises" - Ray Dalio

Bridgewater supplies a free, legal PDF copy of Ray Dalio’s book “Principles for Navigating Big Debt Crises” on their website. It’s an interesting book and extremely relevant to the current economic situation. You don’t need to read the whole book to get most of the value, if you find yourself falling asleep while reading it, it means you’re already past the best part.

Either via: Principles by Ray Dalio - Principles for Navigating Big Debt Crises

or the direct link in PDF format after you’ve signed up for their email list:

WARNING: I personally think the book has quite a bias towards the idea of ‘if we just preserve the status quo / hierarchy of who’s very rich and who isn’t, that’s the best outcome possible in managing a debt crisis’ - which I don’t think is actually true. It’s easy to call national debt deleveraging ‘beautiful’ while you’re splashing around in a heated swimming pool, rather than seeing your own kids starve in a freezing cold room. The question of ‘where exactly did all that debt come from? where did all the money go?’ is highly pertinent to any national debt deleveraging, and inadequately addressed.

I also found Soros’s book “The Crisis of Global Capitalism” from 20 years back, extremely useful for understanding ‘how it feels in the room with the big players’ during a national/international debt crisis.


Thanks for the link. That was a good book, and I recommend reading it. It was a fascinating history read, if nothing else.

I also found Peter Zeihan’s “The End of the World is Just the Beginning” to be equally good. Him and Ray differ a bit on the future of China however. And the reason for that comes down to Ray not looking at demographics, which Peter does. That might be Ray’s Achilles heel here.

Ray is focused on finding reliable patterns in past empires (and they are surprisingly reliable patterns). Peter focuses on what made the modern world possible (mostly, Bretton Woods and the US Navy, which allowed for globalization), the fact that the US appears to be tiring of being the world’s police, and the demographic collapse that is unfolding.

The question becomes if the things Peter is seeing are enough to disrupt the past patterns that Ray has found. This, in my head, makes both books great to read.



In the US the issue is not who is rich or poor… The heart of it is gearing up the industrial base to create tremendously more wealth with a better sharing of the wealth. The tax revenues have been rising. I am sure there will be a dip in 2023 in revenues. Overall demand side econ builds an economy. Longer term the US is going to get much more wealthy. This is all boats rising. Inclusive of balancing the federal budget in some years with surpluses. The IRS will be hitting the wealthy. This is not about making them poor. This is about balancing the actual responsibilities of wealth.

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There is not only one issue at stake, even in the US.

Societies and cultures that frame politics and thought around ‘there is one issue, and it is…’ are invariably heading for the gutter.

the issue is not who is rich or poor

Yet I seldom hear people who are struggling to find money for food or heat saying this, including in the US. [A]

I agree that an increase in supply of goods and services to society often lifts all boats (excluding unnecessary harms this causes to the environment, and excluding people burning themselves out in pointless jobs making stuff or services no one will ever use)

But it’s unreasonable to frame this as a dichotomy, a choice between ‘focus on improving how much society produces’ OR ‘how is wealth shared out, whether all boats are floating above the water line’

The lesson of America is the capitalism is the most effective way to make money and effort move to where it is directed or called for, in both a centralised and fully decentralised manner.

The lesson of Europe, Canada, Australia etc is that a balanced blend of immediate socialism, long-term investment, and some thrift in politics, are needed to direct capitalism in ways that cause societies to be full of happy, well educated, well fed, healthy, people.

[A] (I follow some discussion forums filled with 100000s of younger and middle aged adults from the US).


The heart of increasing America’s industrial output is growing the economy much faster to afford climate change abatement and to profit off of the efforts.

We have so much debt on the federal level and the trade balance has been such that going to demand side econ returns the wealth by newly building out and the wealth in turn makes major projects, think 1950s and 60s, affordable in relative terms.

As far as the rest of the western world minus the UK, their shift is towards supply side economics. The UK conservatives fouled up going against the grain of demand side economics. The UK conservatives are working overtime to throw away opportunities for the UK in the manufacturing sector to build national wealth in favor of a very dumb plan to cut taxes. The markets have spoke fully about that last week. Now the BOE is in the bond market bailing. Again another bad move on the BOE part because higher interest rates appreciate the pound and lower input costs for manufactures. The current crop of dunces in the UK need to go.

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Rephrasing the words

‘the issue is…’


‘the heart of … is…’

does not strengthen the argument as much as it might seem.

I agree with your comments about the UK conservatives going for tax cuts over supply-side investment, and conclusion about ‘dunces that need to go’.

If everyone shifts to supply side economics though, we may find ourselves in a state of deflationary oversupply. It will answer the inflation problem, certainly. But it will create another set of difficult problems, such as, ‘how do we pay for all the production we built but didn’t need, in a world where people don’t need to spend today because oversupply makes it cheaper tomorrow’?


Supply side means less supply. This is economics.

Demand side means more supply. This includes surpluses in the budgets and trade balances.

As far as the wording stop that. It makes no difference nitpicking over how an idea is introduced.


Supply side means less supply. This is economics.

I don’t want to hurt your feelings, but you could not be more mistaken in your beliefs.

Encyclopaedia Brittanica:

supply-side economics , Theory that focuses on influencing the supply of labour and goods, using taxation cuts and benefit cuts as incentives to work and produce goods.

“The supply-side theory is an economic concept whereby increasing the supply of goods leads to economic growth.”

“Supply-side economics holds that increasing the supply of goods translates to economic growth for a country.”

“practitioners often focus on … to foster increased production.”

So, who do I believe here?

@leap1, or the encyclopaedias? (+ every textbook in economics)

“As far as the wording stop that”

It isn’t necessary for you to instruct me on how to argue, I have some experience already. Thank you for your forceful advice, nonetheless.

“It makes no difference nitpicking over how an idea is introduced.”

It does make a difference in discussion, if someone presents a ‘new’ argument, which is simply the old argument repeated, with a few synonyms changed.

Some would say, at that point, you’re not actually having a discussion at all.


What Leap is fundamentally saying is that Supply Side economics never delivered on its promise. Wealth did not trickle down. Government revenues did not rise as taxes fell. Businesses did not magically hire more workers, or raise wages, simply because less was taken out for taxes. All of that should have been obvious from Day One, but we had to learn that lesson over 40 years I guess. England was asleep during class it seems.

We are moving to Demand Side. And this should work but has a problem unique to this point in time that having Supply catch up to increased Demand is problematic, due to COVID/China, and Russia. The idea is sound, the timing is wrong.


An encyclopedia is not an economics book.

You are entertaining yourself that my feelings would be hurt. That is condescending.

Supply side economics increases capital. The capital was used to outsource production. It is not counted in our GDP. Supply side economics cut worker pay. That does not incentivize workers. Welfare is a smaller part of the budget local state and federal. Cutting it was a non issue but was used for propaganda purposes. The federal budgets increased since 1981 to pay off the cronies.

Real GDP growth from 1981 to 2020 was very slow.

The prior demand side period was much faster real GDP growth. The federal government ran many surpluses in to 1969. The trade balance was favorable. Worker pay went up considerably.

There were other factors of policy decisions made during the great depression that were destructive of the demand side period causing most of the inflation of the 1970s and the devaluing of the dollar. Those factors are not in place for this round of demand side economics.

Demand side economics creates much more production because there is demand. You can not cut worker pay to gain demand as supply side policies do in relative terms.

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Now we’re getting to the real nitty gritty instead of throwing around fluff stuff.

Some folks here lean more towards Supply side and others towards a Demand side. It’s important that we settle on a common definition of each, else we’ll be talking past each other forever.

How about if we agree on definitions of each term an an initial step forward?

– I’d lean towards Wikipedia or maybe even Investopedia



Honestly there are more than two definitions depending on where you are sitting. There is the honest outcome anyone can guess. There are the dishonest outcomes anyone can pay for, when we all know it is wrong.

We all know tax breaks for the wealthy wont grow the US economy. They never have and never will. But the formal definition of supply side economics says they will grow the economy.

We all know people work for money. But supply side economics paid 80% of the people less in relative terms over time. This includes laying off fifty something year old workers well before retirement from good paying jobs.

If we go with flat definitions people who wont open a book to read on econ will be thinking they are experts in econ. We all know that is not true. We all know the subject of this board is econ. Let’s keep it honest. People came here to learn not to be fed nonsense by someone else claiming expertise they do not have.

I actually think we should talk past each other. By that I mean no one has to agree with me or anyone else. What fun would that be. We could all smile at each other and flush at the same time. LOL Seriously if someone else is wrong about things that is the time to discuss it. If pretend we are all on the same page when we are not we would be fooling ourselves…apologizing to the motleys. Learning and teaching is not done in a day. Learning and teaching keeps one on his or her toes. I am not interested in sitting back and agreeing with everyone on definitions when it will be a push and shove by people who wont read an economics textbook.

Even then the value of Milton Friedman was very destructive. Samuelson was the real contributor but the people pushing for corruption won. Even wrote the crapola into the encyclopedia.