Billionaire investor and founder of hedge fund Bridgewater Associates, Ray Dalio, is reportedly pushing a solution to slash America’s deficit that he says will help the US government avoid an economic calamity. In a New York Times interview, Dalio says his “3% solution” will result in a massive improvement to America’s financial picture. “The 3% solution is very practical. It has worked many times in many places, most recently in the US from 1991 to 1998.” The so-called “3% solution” calls for lowering the annual deficit-to-Gross Domestic Product (GDP) ratio down to 3%, from around 7%. Dalio says the US can achieve the 3% ratio by implementing three simultaneous measures: cut spending, raise tax revenue and lower interest rates. However, Dalio warns that it may take more calamitous impacts of the debt crisis before politicians act. “All the political decision makers on both sides of the aisle that I spoke with agree that we are likely headed for a terrible outcome if the deficit isn’t cut down to about 3% of GDP. So I feel it’s like being on a boat headed for the rocks in which everyone agrees that we will crash if we don’t change our course, but they’re too hung up arguing which way to turn… The forcing mechanism will likely be a debt crisis and all that goes with it.” Generated Image: Midjourney