Maya is the President of the Committee for a Responsible Federal Budget. The committee itself has been around for a couple decades at this point and came about after several members of Congress left and realized how difficult it really is to be fiscally responsible with a government budget. It’s very difficult to govern in a fiscally responsible manner in a political environment because, in many ways, those two things are completely at odds with each other. Fiscally responsible is simply the not...
Jun 16, 2021•23 min•Season 1Ep. 137
In Prosperity in the Age of Decline, the authors are predicting that 2030 will be the opening year of the greatest depression since 1930. Dr. Kotlikoff believes that it might not wait until 2030. China is already beginning to overtake the US in terms of GDP. By the end of the century, the US will no longer be the dominant economic superpower. It’s not looking good in terms of projection. For a depression to occur, there would usually have to be an event or collapse beforehand, which is definitel...
Jun 09, 2021•20 min•Season 1Ep. 136
The official debt-to-GDP numbers are on track to be 110% by the end of the year, which is nearly a 30% increase over the last decade. The trouble is this calculation doesn’t count unfunded obligations like Social Security. Economic theory doesn’t differentiate between official borrowing and unofficial borrowing. The government has left a number of things off the books in order to keep the public in the dark about the true costs of what they are doing. Fiscal gap accounting puts everything going ...
Jun 02, 2021•23 min•Season 1Ep. 135
Brian Beaulieu is in the business of predicting economic trends. He’s been forecasting trends for the past 39 years and he’s very transparent about his methods. Brian is politically agnostic and aims to be as objective as possible. He doesn’t make money if the market goes up or down, he makes money by being right. Between March 20th and 28th of 2020, his GDP retail sales forecast came out with a 98% accuracy. When it comes to long-term trends, there are only a few ways they can play out. In term...
May 26, 2021•28 min•Season 1Ep. 134
There is a new bill moving through Congress right now that has bipartisan support and is fairly likely to pass in its current form. We can get a good sense of what the bill is intended to do by looking at the title page. The stated goal of the bill is to increase retirement savings, and to simplify and clarify retirement plan rules. Change #1 is that the bill enacts changes to required minimum distributions and does so according to a schedule that depends on how old you are now. This change will...
May 19, 2021•15 min•Season 1Ep. 133
With the recent release of the US Census we are getting a picture of the upcoming demographic time bomb facing the country. The 2020 census revealed that there are 331 million US residents, which represents a 7.4% increase since 2010. This is significant since this period is the second slowest rate of growth we have experienced as a country since the Great Depression and roughly half the growth rate we experienced during the 90’s. When you combine the lower birth rate and declining immigration w...
May 12, 2021•16 min•Season 1Ep. 132
This is an apolitical podcast. The goal is to call out fiscal irresponsibility no matter what side of the aisle it’s on. It’s less about politics and more about math. Joe Biden recently came up with a proposal to reform capital gains taxes. The increased revenue that is thought to come from this reform is earmarked to pay for childcare, universal pre-kindergarten education, and paid leave for workers. The state of capital gains taxes currently is that if you are in the 10% or 12% tax bracket you...
May 05, 2021•17 min•Season 1Ep. 131
If you want to maximize the amount of money you can safely spend in retirement some economists say that you should sell some of your bonds and replace them with annuities. According to Tom Hegna, there is only one mathematically ideal retirement plan and annuities are a key component. While you are working, a diversified portfolio of stocks and bonds is the most efficient way to save for retirement, but once you retire the rules of the game change and you need to start thinking about distributio...
Apr 28, 2021•25 min•Season 1Ep. 130
Bernie Sanders is heading up the proposals regarding estate taxes, and his proposals are deviating to some extent from what President Biden has campaigned on. Joe Biden’s plan says that the estate tax exemption, which is currently $11.7 million as a single person, or $23.4 million as a married couple, will be reverted back to its 2009 levels. Anything above and beyond those limits would be taxed at a rate of 40% and as high as 45%. Bernie Sanders’ proposal begins at 45% and goes up as the amount...
Apr 21, 2021•15 min•Season 1Ep. 129
Modern Monetary Theory (MMT) is a pernicious threat to the Republic and has become a popular theory among left-leaning economists. MMT is less an economical theory than it is a political theory. There are politicians in certain quarters that truly believe that MMT will solve all of our economic problems. They believe that the debt doesn’t matter, printing money has no consequences, and if we want something we can borrow or print as much as we need with no adverse effects. America is already in d...
Apr 14, 2021•23 min•Season 1Ep. 128
Now that Joe Biden has the pandemic relief bill behind him, he can begin to focus on his tax plan which he heavily campaigned on before the election. Joe Biden’s pledge that nobody making less than $400,000 per year will face tax increases has a small asterisk next to it. That threshold only applies to families, and if you are filing as an individual, your threshold is $200,000, which means it will come into play for a much larger number of people. He is still planning on increasing the taxes on...
Apr 07, 2021•19 min•Season 1Ep. 127
If you have a history of premature death or cancer in your family you may still be a good candidate for an annuity. If your spouse has longevity it can still be a good option. Even if you’re not in the best health there are still annuity products with certain features that can still make sense. Some people always want to have control of their money, but they have to realize that an annuity is not giving up control, it’s about taking control over your risk. Annuities give you control over longevi...
Mar 31, 2021•19 min•Season 1Ep. 126
Popular speakers in the financial and retirement space like Ken Fisher and Suzy Orman have made annuities rather unattractive. The major objection has to do with the supposed fees of the product, even though many of the annuity options are not actually fee-based products. Ken Fisher has high fees, just like other investment options like commodities, hedge funds, and real estate. Variable annuities have higher fees than mutual funds but they also come with guarantees, and he’s essentially convinc...
Mar 24, 2021•21 min•Season 1Ep. 125
The amount of money that we’ve printed over the course of the past year and what we’ll print in 2021 is equivalent to the entire economy of Japan. Van Mueller believes that at some point in the future the US dollar will no longer be the reserve currency, and when that happens the standard of living for Americans will go down almost immediately. Every country is printing money and destroying their currency’s purchasing power, but the US is doing it on a scale that’s unheard of. If you talk with t...
Mar 17, 2021•27 min•Season 1Ep. 124
The general public should definitely be paying attention to the impact of inflation and what’s driving it. The government has gone to such ridiculous measures printing money that by the year 2029 the government will literally have to print the entire budget of the United States. Instead of inflation, we should be thinking of it in terms of a stealth tax. The M2 money supply is a good barometer for inflation statistics and by 2029 they are expecting the current M2 money supply to exceed $122 tril...
Mar 10, 2021•28 min•Season 1Ep. 123
Some people have a concern about the implications of the tax arbitrage they could be receiving if they just waited. This is the key to the Roth plans and Life Insurance vehicles that Ed described. The big myth is that you will be in a lower tax bracket when you retire. If you let your IRA just continue to grow, at age 72 the plan will be out of your control, and you will be forced to take the money out at the prevailing rates, whatever they are at the time, for the rest of your life. For married...
Mar 03, 2021•23 min•Season 1Ep. 122
Ed Slott has a new book coming out called The New Retirement Savings Time Bomb. It’s the updated version of the original book written 20 years ago where the time bomb was the tax building up in your IRA account. If you didn’t know how to plan, you could be hit twice and lose up to 80% and 90%. Some of the Estate taxes have gone away since then, but there are other new threats to your retirement savings than ever before. Congress always needs money, and they will always go for the lowest hanging ...
Feb 24, 2021•28 min•Season 1Ep. 121
Joe Biden’s tax proposal has serious implications for anyone attempting to use the Power of Zero paradigm for their retirement planning. We know that the current tax cuts enacted by President Trump will remain at their current levels for the next five years and will revert to what they were in 2017 starting January 1, 2026. This tax sale gives us a historic opportunity to take advantage of low tax rates when we are executing a shift between the tax-deferred and tax-free buckets. If you wait unti...
Feb 17, 2021•17 min•Season 1Ep. 120
There are some basic updates and thresholds you need to be aware of if you’re interested in implementing the Power of Zero strategy. The first change is that your standard deduction went from $24,800 to $25,100. This may not seem like a big deal but does mean that you can have a larger amount of money in your IRA by the time you’re 72. The Roth IRA rules are not being changed at all, despite other account types having their thresholds changed. There haven’t been any dramatic increases within the...
Feb 10, 2021•11 min•Season 1Ep. 119
Due to low prevailing interest rates, the federal government has restricted the ability of industry experts to show the robust rates of return that LIRPs are capable of. When the Consolidated Appropriations Act was passed in the final hours of 2020 it amounted to a Christmas miracle, and it will be immensely positive for LIRPs and will position them to thrive in an environment of low-interest rates. Section 7702 is the section of the tax code that governs the tax treatment of life insurance and ...
Feb 03, 2021•15 min•Season 1Ep. 118
Things may seem bleak when you look at the numbers, but there are solutions that we can implement that could help our situation and ultimately prevent the worst outcomes when it comes to the national debt. David Walker’s book was divided into three parts: a wake up call, a call to action, and a way forward. He has a number of solutions that he’s proposed that meet six principles. Any solution would have to be: pro-growth, socially equitable, culturally acceptable, have mathematical integrity, be...
Jan 27, 2021•23 min•Season 1Ep. 117
David Walker is a certified public accountant and has spent many years in public accounting. He’s run three federal agencies, two in the executive branch and one in the legislative branch. As the Comptroller General of the United States he was the chief performance and accountability auditor of the US. More recently, David Walker has run two non-profit companies and been a distinguished visiting professor at the US Naval Academy and has been on a number of boards and advisors groups dealing with...
Jan 20, 2021•24 min•Season 1Ep. 116
David has written a number of books on the Power of Zero paradigm for retirement and still does about 90 speaking engagements each year. He also runs a program with around 250 advisors that help him espouse the Power of Zero worldview. The basic premise of the Power of Zero is that due to the fiscal irresponsibility of the US, tax rates will have to rise dramatically over the next few years just to keep the country solvent. Combine that situation with a skyrocketing national debt and unfunded li...
Jan 13, 2021•22 min•Season 1Ep. 115
There are a lot of stigmas around retirement planning and David’s new book addresses two of the most difficult problems facing retirees right now, longevity risk and tax rate risk, and how to deal with them at the same time. Tax rate risk has always been a big problem for retirees, but it’s not their biggest concern. Most people worry more about running out of money before they run out of life. David has observed that financial advisors are stuck believing they can solve one risk or the other. 9...
Jan 06, 2021•28 min•Season 1Ep. 114
The Power of Zero occasionally gets a negative review. Today’s episode is going to deconstruct and rebut a recent one-star review and go through the different perspectives. The first claim is the book is based on a misleading assertion regarding taxes in retirement. They are basically subscribing to the idea of tax diversification and the idea that we don’t really know what taxes will be in the future, and in that case we should hedge our bets against all possibilities. This would be a fine appr...
Dec 30, 2020•26 min•Season 1Ep. 113
Last week David did part 1 of the review of David Walker’s new book and talked about the reasons why the US will probably no longer be a world superpower by 2040. In this episode we’re going to cover the proposed solutions. 40% of Americans don’t pay any tax at all with 20% of Americans receiving a refundable tax credit. This has been used in lieu of raising the minimum wage. The federal government forgoes $1.4 trillion in taxes per year in allowable deductions. One solution would be to shore th...
Dec 23, 2020•16 min•Season 1Ep. 112
David’s new book did quite well during the launch week, quickly becoming the 3rd most sold business book in the world. David Walker is well known for his expertise regarding the fiscal condition of the United States and is perhaps the person who most understands the potential impacts. Based on David Walker’s current projections for the US in the next 20 years things are not looking good. There is a real question about whether or not the US will still be a world superpower at that point. What doe...
Dec 16, 2020•19 min•Season 1Ep. 111
The historical paradigm says to put your money into a 401(k) or IRA, get a tax deduction and let that money grow tax-deferred so that when you take that money out you’re in a lower tax bracket. Experts and economists are starting to look at the fiscal condition of the US and the picture isn’t good. The US is $23 trillion in debt with unfunded obligations of upwards of $239 trillion. We are marching into a future where the very solvency of the US government is being called into question. We are g...
Dec 09, 2020•34 min•Season 1Ep. 110
The Securing a Strong Retirement Act is a bipartisan bill currently working its way through the house and has major implications for everyone in the country. We are finally getting some relief from RMD’s. With life expectancy increasing they are looking at pushing out Required Minimum Distributions until the age of 75. This primarily benefits people of substantial means since the average person with money in their retirement accounts are withdrawing it above and beyond the minimum and well befor...
Dec 02, 2020•11 min•Season 1Ep. 109
At the time of recording this podcast the results haven’t been certified but it looks like Joe Biden will be the next US president. There are a couple of different outcomes that you need to pay attention to. The first involves him not controlling the Senate. In order to win the Senate Democrats would have to win two seats in a runoff election on Jan 5 but pundits are saying that result is unlikely. If Republicans control the Senate there will be a lot of obstruction for Joe Biden’s agenda. Every...
Nov 25, 2020•14 min•Season 1Ep. 108
