President Trump has trumped yet again and decisively so. It's now time to consider our nation's as well as our own personal economic positions in light of the once and once again President's proposed domestic policy plans. In this episode, Larry addresses those policies from the perspective of the dirty little secret that neither candidate acknowledged -- our government is beyond broke. Its ever-growing mountain of on-the-books and off-the-book obligations stands full square in the way of the next President's promised tax breaks. Yes, his promised tariffs represents a new tax, which the public, not foreigners, will pay to cover his largess to the elderly (eliminating taxation of Social Security benefits), his largess to those receiving tips and those who will start requesting they be tipped, not paid (eliminating taxes on tips), and his largess to corporate shareholders (lowering the corporate income tax rate from 21% to 15%). But the tariff revenues won't cover the tax breaks let alone put a dent in Uncle Sam's fiscal gap -- the present value of all projected future outlays less all projected receipts. Closing that gap requires either massive tax hikes or benefit cuts.
One answer is the radical healthcare reform Larry suggests -- a reform that could cut healthcare spending from 17% to 11% of GDP, roughly what's needed to cover the fiscal gap. But radical, essential reform is far from the table. Hence, policywise Trump II will likely exacerbate the economic fallout, which Larry documents, from America's postwar fiscal profligacy. Larry also delivers personal financial advice. Our nation's relentless quest to achieve fiscal ruin threatens all our pocketbooks, particularly those of our kids. There is, in this context, no substitute for serious, economics-based financial planning -- planning that contemplates future tax hikes and benefit cuts in the ever darkening twilight of America.
Larry's bio is posted at kotlikoff.net. Please share this podcast and please run Larry's MaxiFi Planner tool to stay safe in these financially perilous times.
Economic Matters - The podcast is hosted by Laurence Kotlikoff, a Boston University Economist, a NY Times Best Selling Author, President of maxifi.com, and Author of Money Magic.
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