On the surface, the going looks pretty good in the American economy. Wall Street is roaring, Silicon Valley is booming with the potential of Silicon Valley, unemployment is fairly steady and GDP is on the rise. A healthy picture, right? <\/p>\n
Wrong, says Ray Dalio. There is now so much variation in the U.S. economy that it can no longer be looked at \u201cas a whole.\u201d <\/p>\n
The dynamic is growing increasingly complex as the nation is becoming more reliant on its most productive industries: Technology. While Wall Street has begun to mutter the world \u201cbubble\u201d in relation to valuations, Dalio warns that more widely, the prospects of the majority of workers is now tied to those in a relatively small sector. <\/p>\n
\u201cI think the issue is very much that you can\u2019t look at the U.S. as a whole nowadays,\u201d the Bridgewater Associates founder said at the Fortune Global Forum in Riyadh on Monday. He added: \u201cYou have to look at everything in terms of the very, very big differences and how those differences are handled.\u201d <\/p>\n
He explained: \u201cIf you\u2019re looking at, let\u2019s say, the AI world, and really what amounts to about three million people\u20141% of the population\u2014leading, and then \u2026 the 5 or 10% around them, you have one world that the whole world is dependent on.<\/p>\n
\u201cAnd then you have the bottom 60% of the population.\u201d <\/p>\n
Dalio\u2019s take echoes research released by Moody\u2019s earlier this month.<\/a> According to the analysis, 22 U.S. states are seeing their economies contract\u2014effectively in a recession. Meanwhile, just 16 are seeing economic growth, while 13 are classified as \u201ctreading water.\u201d That said, the states contributing the most to U.S. GDP\u2014California, Texas, and New York\u2014are all in the clear, pushing the overall growth of the country into the green as a result.<\/p>\n Indeed, Moody\u2019s chief economist Mark Zandi told Fortune the future of the entire U.S. economy is tied to the growth in two states: California and New York. California, of course, because it is home to Big Tech and New York as the financial partner benefiting from its West Coast innovations.<\/p>\n Dalio continued: \u201cConsider this, 60% of the American population has below sixth-grade reading level. That\u2019s tough, and with that [they\u2019re becoming] unproductive, and because of those things you have a dependency, an extreme dependency.\u201d<\/p>\n According to the National Literacy Institute<\/a>, 54% of U.S. adults read below the equivalent of a sixth-grade level, and 64% of our country\u2019s fourth graders do not read proficiently<\/p>\n \u201cIs it a bubble? Is it not a bubble?\u00a0We will debate that and we\u2019ll eventually find out, but in any case it is in itself an issue.\u201d <\/p>\n Dealing with the problem<\/p>\n Wealth inequality in the U.S.\u2014and indeed many of the globe\u2019s developed nations\u2014has increasingly diverged over the past few decades. Indeed, even since 2020 the shift in wealth has been heavily towards those at the upper end of the income ladder. <\/p>\n