Ruchir Sharma on America’s Debt and the Future of Capitalism

[@nileshdoshi8713]

Ruchir, in spite of money printing and loose monetary policies prior to 2019 , didn't create consumer price inflation because China came as cheapest source of supplies + usd went out of usa being reserve currency..

[@ritikgautam7342]

Amazing conversation! Thanks so much for this.

[@tatianafoule6257]

Who is the speaker?

[@nileshdoshi8713]

Market is comfortable with US DEBT, in my opinion, there is no alternative which can absorb such large amounts . Also , we are in FIAT currency world.. so you buy assets in Africa using your USD, it will be routed back to USA

[@rishigupta1738]

Ruchir rocks!

[@noahway13]

On average, I don't believe most people are 'voting with their feet' and moving to 'Red States' to avoid socialism. What is happening is that *companies* are moving to red states to avoid taxes and the workers follow them,. Plus they are moving because the housing market in blue states is too expensive for the average person to own or or even rent.

[@ParagRatanpara]

Timestamps. [00:00] Introduction Host Shruti Rajagopalan welcomes Ruchir Sharma, Chairman of Rockefeller International, columnist for the Financial Times, and author of "What Went Wrong with Capitalism." Overview of the discussion topics: American debt levels, U.S. monetary policy, overregulation, industrial policy, the Indian economy under Modi, and more. Mention of where to find the full transcript and helpful links. [01:40] The Resilience of Capitalism Amid Challenges Shruti expresses surprise at how robust capitalism remains despite excessive government spending, overregulation, and debt. Ruchir counters that while the U.S. appears to be doing well on the surface, underlying issues like declining productivity growth and public dissatisfaction suggest otherwise. Discussion on how productivity growth has slowed significantly in the U.S. and other Western countries, indicating a decline in economic dynamism. [06:30] Public Sentiment and Economic Discontent Ruchir highlights surveys showing most Americans feel the economy is moving in the wrong direction. Exploration of how economic growth benefits are concentrated among a few, leading to inequality and a sense that the system is not working for the average person. Discussion on the disparity between surface-level economic indicators and the lived experiences of most Americans. [10:00] Expansion of Government and Its Impact on Capitalism Historical perspective on the U.S. government's role in the economy, noting a significant expansion since the Great Depression. Ruchir argues that the increasing government presence has led to overregulation, bailout cultures, and micromanagement of the business cycle. Examination of how these factors stifle innovation, productivity, and contribute to public frustration. [12:30] Monetary Policy and the Socialization of Risk Discussion on how monetary policy has favored the wealthy, leading to asset price inflation. Introduction of the "Greenspan Put," where the Federal Reserve intervenes to prop up markets, encouraging risk-taking among investors. Analysis of how easy monetary policies and low consumer price inflation have led to inflated asset prices, particularly in housing, exacerbating inequality. [17:30] Overregulation and Its Impact on Small Businesses Ruchir explains how overregulation benefits large incumbents while creating barriers for new entrants and small businesses. Discussion on the rise of "zombie companies" kept afloat by government support, hindering economic dynamism. Exploration of the deadweight loss on the economy due to excessive compliance costs and legal burdens. [18:45] The Role of Elite Consensus in Expanding Government Shruti asks why the elite consensus has shifted towards bigger government and overregulation. Ruchir suggests that good intentions have led to an overreliance on government solutions, with policymakers defaulting to more intervention. Discussion on how this shift affects opportunity and economic mobility, particularly among working-class individuals. [24:00] The Need for a Fiscal Crisis to Prompt Change Ruchir argues that only an apparent fiscal crisis will force a reevaluation of government's role in the economy. Historical examples cited where countries reformed only after facing severe fiscal constraints. Discussion on why the pandemic did not serve as this crisis point and what a true fiscal reckoning might entail. [26:03] U.S. Debt Levels and Market Complacency Exploration of why credit and bond markets aren't reacting adversely to high U.S. debt levels. Ruchir explains the U.S.'s status as the world's reserve currency creates complacency among policymakers. Warning that continuously testing market tolerance could eventually lead to a crisis. [33:19] Protectionism and Industrial Policy Shruti brings up the resurgence of protectionism and industrial policy in the U.S. Ruchir expresses concern over the U.S. emulating China's industrial policies just as China's model shows signs of faltering. Discussion on the challenges and potential inefficiencies of adopting industrial policy in a democratic and less centralized system like the U.S. [38:30] Demographics and Declining Birth Rates Conversation shifts to the challenges posed by declining birth rates and aging populations in developed countries. Ruchir notes that reversing demographic trends is difficult and that immigration alone may not compensate for population declines. Discussion on the economic implications of a shrinking workforce. [42:25] Technology's Role in Mitigating Regulatory Burdens Shruti suggests technology can render overregulation less impactful by offering alternative solutions (e.g., ride-sharing apps bypassing taxi medallion regulations). Ruchir acknowledges the benefits but emphasizes that overregulation still imposes significant costs, particularly on small and mid-sized businesses. Discussion on how technological advancements can both alleviate and be hindered by regulatory environments. [45:30] Impact of U.S. Overregulation on Developing Countries Examination of how U.S. and European regulatory frameworks are exported to countries like India. Shruti points out that adopting these complex regulations strains developing countries with less administrative capacity. Discussion on the unintended global consequences of overregulation. [51:03] Shift to India: Modi Government's Economic Policies Ruchir assesses the Modi government's fiscal prudence but critiques the allocation of government spending. Discussion on continued subsidies for unproductive sectors versus investment in health, education, and infrastructure. Exploration of India's balance between welfare spending and growth-oriented investments. [55:00] Advice for Modi's Next Term Ruchir emphasizes the need for keeping investigative agencies in check to foster a positive business environment. Warning against the complacency and arrogance that can come with prolonged power. Suggestion that the Modi government should remain open to critical feedback and avoid surrounding itself with echo chambers. [01:05:16] Election Analysis and Anti-Incumbency Trends Ruchir shares his experiences and methodologies in covering Indian elections. Discussion on how his group's on-the-ground analysis predicted the outcomes accurately. Insight into the Indian electorate's desire for checks and balances, and some level of opposition to prevent authoritarian tendencies. [01:17:38] Global Anti-Incumbency and Final Thoughts Exploration of the global trend of anti-incumbency, where voters seek change due to dissatisfaction with the status quo. Ruchir links this trend to the core argument of his book: capitalism, in its current form, is not serving the average person. Concludes that significant reform is unlikely without a major crisis to force a reevaluation of economic policies and government roles. [01:20:00] Conclusion

[@NitinJoban]

Ruchir helps to analyse various scenarios

[@NitinJoban]

Ruchir is exceptionally brilliant person and his book will remind the World on current status of USA economic mismanagement consequences Your queries remain focused and the main topic

[@NitinJoban]

Indian PSU are dramatic positive changes Are you not following recent profitable PSU????

[@NitinJoban]

Shruti doesn't apply evolving logic on how India is smartly navigating the balanced approach

[@pardeeptandon]

Unfortunately, many diplomatic & economic blunders have been committed in the last decade.

[@kallachi729]

For your information, the PSUs in India today are some of the best performing companies. Get updated on India before you comment….

[@GuzzarAwan]

But US investors want pie in it..which govt isnt allowing. Ruchir represents American Capitalist class.

[@kallachi729]

@@GuzzarAwan Ruchir does not represent anybody. Like all intellectuals ( he is one), he also felt that to be one he has to be a liberal too… that is changing….i feel

[@NitinJoban]

Shruti you are intelligent and yet naiive in a way BJP created 400 seats enthusiasm and hence got 242 seats. Secondly when Rahul keeps making false promises and grab the seats then how could you have stop loosing some of the votes to BJP In dirty anti India politics propaganda you have to shrewed Besides Ruchir numerous people disagreed 400 seats claim Were you not watching daily TV or read news on for and against bombarded in the public Where is the question of BJP taken by surprise?

[@NitinJoban]

Opposition like Rahul who crussifies Indian image in USA and Mamta out of the way support for Kolkatta rapes case

[@NitinJoban]

Singapore dramatic progree was partly because following disciplined democracy and nobody talked about tired of Modi People MP Gujarat rarely complained about tiredness of Modi Of course anti BJP will use getting tired etc etc not to vote for Modi

[@nileshdoshi8713]

Even Americans like Warren buffet, what choice he has but to buy US treasuries else keep it in bank, who in turn will buy treasuries 😂

[@NitinJoban]

Headcount baby boomer problem and it's inevitable What can USA do other than what they trying to maintain some balance

[@NitinJoban]

Why are you a so anti Social approach Shruti do you talk Faltu useless spend Stupid accusations of Mail Bap government