July 23, 2018 David McKnight
Annual Budget Deficits Soon to Top $1 Trillion–a Crisis Highlighted in Our Upcoming POZ Documentary

A few days ago the CBO announced that budget deficits for the fiscal year starting in October will soon exceed $1 Trillion.  This is due primarily to spending increases the federal government agreed to earlier in the year as well as mounting interest on the national debt.

Let’s talk about the implications.  First of all, interest is mounting because debt is increasing AND because interest rates are rising.  In fact, the Fed has indicated that they hope to eventually push interest rates to historically normal levels (between 4 and 5%).  So, every time interest rates go up (most experts agree we’ll be getting two more hikes in 2018), the cost of servicing our $21 trillion of debt will increase.

In our upcoming documentary, The Power of Zero, we interview US Congressman Tom McClintock, one of the few remaining deficit hawks in Congress.  In his interview he explains the concept of a “sovereign debt crisis”.  When the countries around the world who are currently buying our bonds make the judgment that we will no longer be able to pay our debt back, they stop buying our bonds.  This is what’s called a sovereign debt crisis.  If other countries won’t buy our debt, then how will we continue to fund these trillion dollar deficits?  Most experts agree on this part: higher taxes.

Here’s the scary part: In his interview Congressman McClintock says that the canary in the coal mine for our country is when we hit $1 Trillion deficits.  That’s the warning sign that a sovereign debt crisis is imminent. Take note:  In October 2018, that moment arrives.  What are you doing to protect your clients’ retirement plans from the impact of higher taxes?  It all starts with education.  If they don’t understand the problem, they’re not likely to act.  Be sure to introduce your clients to The Power of Zero documentary which gets released in mid-September.

Here’s the great news:  you’ll be able to watch The Power of Zero before it gets released in September.  You’ll also be able to screen the movie to prospects and clients in a theater near you.  Stay tuned for more information and a movie trailer!

A tax freight train is coming.  Will your clients be ready?



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