- Growing public debt could lead to higher interest rates, which would make funding technological advancements like blockchain more costly.
- Druckenmiller blame the state of fiscal policy today, believing it will impede vital technological breakthroughs like blockchain and artificial intelligence.
At a time of unheard-of technical breakthroughs, well-known figures are voicing worries about government actions that might impede advancement.
In a recent interview with CNBC, billionaire hedge fund manager Stanley Druckenmiller expressed his disapproval of the present budgetary policies of the government, which he feels may impede important technical developments in the US.
Billionaire investor Stan Druckenmiller on CNBC slams Bidenomics:
"If I was a professor, I'd give them an F."
Druckenmiller lays out how Biden's unchecked spending, student loan forgiveness, and the resulting interest rates on that debt will destroy private sector innovation. pic.twitter.com/DOXUfbE1qq
— Charlie Kirk (@charliekirk11) May 10, 2024
Government Spending vs. Technological Innovation
Druckenmiller draws attention to a sharp difference between the Great Depression era and the present by comparing the government spending patterns of the two periods. The present fiscal policies of the government include large expenditures motivated by a need for increased debt.
According to Druckenmiller, this approach is probably going to cause interest rates to rise, which would raise the cost of capital access for private companies. With blockchain and artificial intelligence being two industries where ongoing investment is essential, this is especially worrying.
Especially for sectors dependent on technology, rising interest rates have serious ramifications. More expensive borrowing could discourage private businesses from funding potentially ground-breaking technology.
Innovations in Blockchain Face Danger
With ETHNews highlighting the advancements in projects like Chainlink and Shiba Inu, which have attracted a lot of attention and support, the tech industry has witnessed a lot of activity lately.
Druckenmiller’s observations do, however, imply that if the government keeps up its high spending rate, which could drive out vital private sector investment, such breakthroughs may be limited.
Currently, Druckenmiller calls the 7% US budget deficit at full employment “unheard of.” This, he contends, may be the most exciting time in history to make investments that increase production. Instead, excessive government expenditure is endangering the possibility of a major technology boom.