Via Fox Business

The billionaire founder of the world’s largest hedge fund Bridgewater Associates, Ray Dalio, is giving credence to an economic theory floated by some progressive Democrats, including New York Rep. Alexandria Ocasio-Cortez and Independent Vermont Sen. Bernie Sanders.

Known as modern monetary theory (MMT), the idea is that if a government controls its own currency, there is no need to worry about balancing the budget. Therefore the government, not the central bank, can control the economy through fiscal policies, like spending and taxing.

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In a blog post on LinkedIn, Dalio said the “most important engineering puzzle” facing policy makers around the world is “how to get the economic machine to produce economic well-being for most people when monetary policy does not work.”

MMT, he noted, could help more evenly distribute wealth benefits. While the Federal Reserve cut interest rates and turned to quantitative easing (QE), or buying securities to increase the money supply, to limit the effects of the 2008 financial crisis, Dalio says this strategy will be less effective in mitigating the impact of the next downturn. In general, he says QE and interest rate cuts disproportionately help top earners more than lower-income individuals. That is because they increase the price of assets, of which the rich already own a lot.

He noted a shift toward the economic policy – which has a number of prominent detractors – is “inevitable” because the Federal Reserve will want to ease monetary policy when interest rates are zero percent. After the next downturn, the hedge fund icon said interest rates in the U.S. will likely be pinned near zero percent, resulting in the shift toward manipulating fiscal policy.

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Dalio said a “big risk” of MMT is giving more power to politically motivated individuals.

Ocasio-Cortez recently said during an interview with Business Insider that she was “absolutely” open to supporting MMT as a means to fund social programs – like Medicare-for-all and free college tuition. Ocasio-Cortez has also proposed a sweeping climate change proposal called the Green New Deal, which one group estimated could end up costing $93 trillion.

Sanders has also indicated support for MMT.

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Others, however, don’t necessarily agree.

Billionaire Microsoft co-founder Bill Gates called the economic theory “some crazy talk.”

Federal Reserve Chair Jerome Powell in February said “the idea that deficits don’t matter for countries that can borrow in their own currency I think is just wrong.”