Mark Spitznagel, co-founder and CIO of the private hedge fund Universa Investments, is known for making juicy returns for wealthy investors with his patented tail-risk hedging strategy, a form of market “insurance” that pays handsomely during times of economic and market turmoil. But when it comes to his generation’s debt obsession, Spitznagel sounds more like a social activist than a hard-nosed money manager.
For years, the 53-year-old has warned that the national debt—which recently surged over $34.5 trillion—is unsustainable. He argues that, when that rising debt combines with decades of loose monetary policy that lifted asset prices ever higher, growing piles of consumer debt, and businesses’ penchant for leaning on credit during times of stress, it creates a “tinderbox economy” that could go up in flames in a moment’s notice. It’s the “greatest credit bubble in human history,” Spitznagel told Fortune last year, warning that “it will have its consequences.”
With this in mind, we decided to ask Spitznagel, who has two teenagers of his own, what this credit bubble will mean for future generations, and how he feels about his cohort’s debt-laden legacy. As usual, he didn’t pull any punches.
“We have been just incredibly irresponsible to future generations. They played no part in this, and yet they will bear the burden for this,” the hedge funder told Fortune. “We should all feel really, really bad about it—like really bad about it. It’s gonna hurt people that aren’t even alive today. How is that right?”
For Spitznagel, the U.S.’ unsustainable federal debt is outright unethical. He argues it’s merely a way to kick the can down the road to the next generation whenever problems emerge, particularly problems that could hurt investors’ market returns. From spending billions to save “too big to fail” banks during the Great Recession of 2008 to pumping trillions into the economy to prevent a terrible…