Billionaire hedge fund manager Stanley Druckenmiller warns that excessive government spending will stifle key technological innovations that could boost productivity in the United States.
In a new interview on CNBC, Druckenmiller says the government is spending money like we’re back in the Great Depression.
According to the billionaire, the government’s demand to increase debt to finance its unjustified spending will eventually lead to higher interest rates, making it more expensive for private companies to innovate in technology areas such as blockchain and artificial intelligence (AI) to access new capital.
“I studied the Great Depression, and you had a private sector crippled by debt and virtually no new ideas, so interventionist policies were necessary and effective.
The private sector couldn’t be more different today than it was during the Great Depression. Their balance sheets are good. They are in good health. And have you already seen more innovative ideas that the private sector could benefit from right now? You have blockchain, you have AI, you have everything.
All the government had to do was get out of their way and let them innovate. Instead, they spent and spent and spent. My new fear now is that the spending and resulting interest rates on the debt that have been created will crowd out some of the innovation that would have taken place.
We have a budget deficit of 7% at full employment. This is unheard of. »
Druckenmiller says blockchain, AI and other technological advances could spark a productivity boom in the country, but laments that government spending is hindering progress.
“I think we’re in one of the most exciting times ever in terms of potential productivity-enhancing investments, and why we’re spending like we’re still in the Great Depression is beyond me.”
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