There is a phrase I hear often at conferences and on YouTube videos that is usually credited to Lyn Alden, author of an excellent book, Broken Money. She and others often use the phrase, “nothing stops this train” to illustrate the unstoppable momentum of fiscal deficits. She borrowed the phrase from a line in the program Breaking Bad.

Ray Dalio is a billionaire hedge fund manager and founder of Bridgewater Associates. I think he might start using the phrase. He was in Washington, DC to meet with senior leaders on the Republic side and the Democratic side about the budget deficit. He explained, “Virtually everyone agrees that you have to get the budget deficit down to 3 percent of GDP.”

He then asked them a logical question: Why can’t you make a pledge that you will get it down to 3 percent? “They explained the absolutist policies that must exist. You must make statements like ‘I will absolutely pledge not to raise your taxes,’ or ‘I will absolutely pledge not to reduce your benefits.’”

He concluded this is “the equivalent of an absolute pledge not to change the trajectory we’re on in order to have a better set of circumstances than the likely financial crash that we’re going to have.” He lamented that they “all agree about the consequences of this debt problem, and they all agree they cannot speak up because their constituents would throw them out of office. And their political parties will exert enough pressure on them that it is impossible to make those compromising statements and actions that bring together the revenue and expenses to produce a good budget.” 

We have a $39 trillion national debt and nearly $2 trillion deficits each year. Ray Dalio’s conversation with the political leadership illustrated that Congress can’t stop the debt train. That’s why I have concluded, “nothing stops this train.”