What I Would Do If I Were President

the power of zero

As a financial advisor, David came up with the concept of the three buckets and a quick five-minute presentation to convey the idea to clients. This developed into an hour-long presentation which eventually became the seed of the Power of Zero book.

It took David just three days to write the book because the core of the material was already in place. He just had to commit to putting it onto the page. The book was republished in 2018 with new content by Penguin Random House.

David is currently writing a fictional story centered around a financial theme that has a lot of real-world applications right now. The plot basically revolves around the very real threat of Modern Monetary Theory.

Modern Monetary Theory is the idea that the government isn’t constrained by the same restrictions as the average American family and can essentially print as much money as they want without repercussions.

All of the economists that David has interviewed for his podcast essentially agree on the fact that implementing MMT would lead to hyperinflation. However, this doesn’t stop MMT proponents from espousing the theory though.

If you start accumulating debt in the belief that it won’t affect anything, reality will prove you wrong. The cost of servicing the level of debt the US government currently has is taking up a large portion of the federal budget. By 2040, it would consume the entirety of the federal budget if interest rates simply went back to where they were at in 2003.

David believes the moment of reckoning for the US is going to be 2030. Brian Beaulieu has predicted the major economic trends with 90% accuracy over the past 40 years, and he believes that 2030 will be a confluence of events that will result in a global depression.

As rough as the dollar is, it’s still one of the most stable currencies in the world. It’s relatively unlikely to be usurped.

The real issue is that Social Security and Medicaid are tied to inflation, so if we print more money, the cost of the programs also rises and you will never really get ahead.

The US is facing down a fiscal gap of $239 trillion just to be able to deliver on the promises already made.

The Biden tax legislation has pros and cons for many Americans, but the bottom line is that he’s not addressing the underlying problem. It doesn’t arrest the slide into fiscal solvency.

Politicians are generally reluctant to push anything through right before midterms. If the legislation doesn’t get passed before the end of the year, it may never happen.

If David were the president of the United States, he would take a page out of Larry Kotlikoff and basically guarantee that Biden wouldn’t be elected for a second term. The big focus would be to reform the social programs that are driving the debt, in particular MediCare.

Without this kind of action, the national debt will grow by definition. Maya MacGuineas did a study to find what the government would have to do to simply prevent the debt from growing by $1 trillion per year, and she found that they would have to tax every dollar earned above $50,000 at a rate of 40%.

There is no way around the math. If we are going to fix this problem, no amount of taxing the rich or everyday Americans will do it. We have to fundamentally reform Social Security, MediCare, and Medicaid to get our country back on track.

On Jan 1, 2026 tax rates are going to revert to what they were prior to the tax cuts. If you want to do Roth conversions, now is the time. You have five years to take advantage of the current historically low tax rates. 

Every year that goes by that you fail to take advantage of those tax rates, it increases the likelihood that you will rise into a tax bracket that gives you heartburn. When it comes to Roth conversions, time is your friend and when time is short they become less appealing.

When doing a Roth conversion, you have to be convinced that the tax rate you will pay today will be lower than what you would be forced to pay somewhere down the road. If tax rates are even 1% higher, then it’s probably the right move.

Schedule your one-on-one strategy session today

Join Our Mailing List