HOW COUNTRIES GO BROKE
By Ray Dalio
Publisher: Avid Reader
The author of “Principles” evaluates the forces that contribute to what he calls the “big debt cycle.”
Review by By The Books Reviewer
Ray Dalio's latest tome, "How Countries Go Broke," is a masterclass in economic analysis, dissecting the perilous journey nations embark upon when they mismanage debt. Dalio, the founder of Bridgewater Associates and a seasoned global macro investor, leverages his extensive experience to craft a narrative that is both compelling and alarmingly pertinent.
The book meticulously examines the "Big Debt Cycle," a concept Dalio has previously explored but now presents with unprecedented depth. By scrutinizing thirty-five instances over the past century where governments have succumbed to fiscal ruin, Dalio distills a template that is as enlightening as it is disconcerting. His analysis is not merely academic; it is a clarion call to policymakers and citizens alike, urging immediate and informed action.
One of the book's most striking features is its accessibility. Dalio's prose is clear and devoid of unnecessary jargon, making complex economic phenomena comprehensible to a broad audience. This is no small feat, considering the intricate subject matter. The inclusion of historical case studies adds a narrative richness that keeps the reader engaged, transforming what could have been a dry treatise into a page-turner.
However, the book is not without its shortcomings. While Dalio's analysis is robust, his proposed solutions, though straightforward, may come across as overly simplistic given the multifaceted nature of global economies. The emphasis on reducing national deficits to 3% of GDP, for instance, is a commendable goal but lacks a nuanced discussion on the socio-political challenges inherent in implementing such measures. ([ft.com](https://www.ft.com/content/deabeaac-db7c-46fe-a037-a75698a7e982?utm_source=openai))
Furthermore, Dalio's focus is predominantly on the United States, with other nations receiving comparatively cursory treatment. This American-centric perspective, while understandable, limits the book's applicability to a global audience. A more balanced examination of different economic systems and their unique challenges would have enriched the discourse.
In conclusion, "How Countries Go Broke" is an essential read for anyone seeking to understand the precarious path nations tread when fiscal responsibility is abandoned. Dalio's insights are both timely and timeless, serving as a stark reminder of the consequences of economic mismanagement. While the book has its limitations, particularly in the breadth of its solutions and its narrow focus, it remains a significant contribution to the field of economic literature.
Final Recommendation: Highly recommended!
Recommendation: Highly recommended!
written on: 6/12/2025