The United States must change its economic system or there will be conflict between the rich and the poor.
So says billionaire hedge fund guru and finance entrepreneur Ray Dalio.
"Capitalism needs to be reformed. It doesn't need to be abandoned. So, like anything, like a car, like anything, a plane, a school system, anything, it needs to be reformed in order to work better," Dalio said on CBS' "60 Minutes" Sunday.
"I think the American dream is lost," Dalio said, because the U.S. economy is not "redistributing opportunity."
Dalio said the current situation is not sustainable. "We're at a juncture. We can do it together, or we will do it in conflict, that there will be a conflict between the rich and the poor," Dalio said.
"If you look at history, if you have a group of people who have very different economic conditions, and you have an economic downturn, you have conflict," Dalio says. " I'm not saying we're going to go there. I'm saying that right now — it's a huge issue, it's unfair...it's unproductive, and at the same time, it threatens to split us."
Dalio, who is worth more than $19 billion according to Forbes, said he would declare income inequality a "national emergency" if he were President of the United States and that it should be a priority for the country.
"I play probabilities. And I would say it's probably 60-40, 65-35 that [reforming capitalism] will probably be done badly and that it would be a bad path. But I'm saying it doesn't have to be that way," Dalio said. "By realizing that it is a juncture maybe we can nudge just a little bit the probabilities so that we can have a better outcome."
To level the economy, "of course" Dalio and other ultra-wealthy people should pay more taxes, he said. "[O]ne way or another, the important thing is to take those tax dollars and make them productive."
Dalio started the hedge fund Bridgewater Associates in 1975 out of his two-bedroom apartment in New York City. Today, Bridgewater manages $160 billion in capital and is the largest hedge fund in the world.
He is not the only billionaire capitalist to call out the problem of wealth inequality: The Berkshire Hathaway boss Warren Buffett and Microsoft co-founder Bill Gates have both said that capitalism needs to be adjusted to better take care of everyone within the system.
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