Billionaire investor Stanley Druckenmiller said the federal government has been spending recklessly and failed to issue debt at low rates in past years, mistakes that will ultimately lead to some tough choices in the future like cutting Social Security.

“We are spending like drunken sailors,” Druckenmiller said Wednesday on CNBC’s “Squawk Box.” “Don’t forget pre-Covid … the federal government was 20% of GDP in spending. Now it’s 25% of GDP. … My father told me ‘if you’re in a hole, stop digging Stan.'”

The legendary investor, who now runs the Duquesne Family Office, said he was disappointed to find out that the White House is seeking another $56 billion in emergency spending for disaster relief and child-care programs, in addition to the $106 billion the administration wants for Israel and Ukraine.

The federal government wound up its fiscal year in September with a deficit just shy of $1.7 trillion, up about $320 billion, or 23.2%, from fiscal 2022. The budget shortfall adds to the staggering U.S. debt total, which stood at nearly $34 trillion.

Druckenmiller said government entitlement programs, which make up almost half of the federal budget, might be forced to be pared down in the future. He proposed a cut in Social Security benefits.

“I want to go after entitlements. It’s where the money is,” he said. “This generation has got to take a cut … right now current seniors, you’re going to get 100 cents on the dollar. Future seniors looking at five or 10 cents on the dollar, is it not unreasonable for us to go to 85 or 90 cents on the dollar?”

Despite his calls to reduce overall spending, the widely followed investor stressed that it’s necessary for the U.S. to support Ukraine and disagrees with Republicans urging to stop helping Kyiv in the conflict.

“I was actually happy to see when the announcement the support for Ukraine and Israel $106 billion,” Druckenmiller said. “Do you know how much we’re going to have to spend if Putin wins in Ukraine? It’s madness.”

Druckenmiller believes the market will be “very challenged” in the current environment, and only disciplined stock pickers would be rewarded.

Druckenmiller once managed George Soros’ Quantum Fund and shot to fame after helping make a $10 billion bet against the British pound in 1992. He later oversaw $12 billion as president of Duquesne Capital Management before closing his firm in 2010. 

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