More people are listening to more music than ever before, but musicians seem to get a smaller slice of the pie. How does a rising band grapple with the new reality? And here they offer an exclusive first listen to their next track.
Recently the Congressional Budget Office published a scathing report that the US government debt-to-GDP ratio will double over the next 30-years.
Few government agencies are as blunt as the Congressional Budget Office.
In fact the agency’s report plainly states that “the prospect of such large and growing debt poses substantial risks for the nation. . .”
Echoing this sentiment, a former director of the Congressional Budget Office called the US debt:
“a serial horror story in which the greatest economic power ever to grace the globe sails directly into self-inflicted crisis, suffering and decline.”
Nearly every major superpower over the last thousand years, from the French Bourbon monarchy to the Ottoman Empire, was eventually crushed under the weight of its debt.
The CBO has been sounding the alarm bells for years warning successive administrations that there will be serious, serious consequences in the future.
The irony is that the CBO is probably being overly optimistic.
I pulled some of their older projections from several years ago, and while they nailed the trend, they totally underestimated how severe the debt crisis would be.
In January 2007, for example, the CBO issued its annual budget and economic outlook in which they made 10-year projections about the national debt.
So, 10 years ago, the CBO estimated that by 2017, the “debt held by the public” would be $4.2 trillion, which they estimated would be 24.6% of GDP.
(Note that the CBO tends to focus on “debt held by the public”, but this number is only a portion of the total national debt.)
Now it really is 2017.
So how much is the actual debt held by the public today?
$14.35 trillion, or 76.5% of GDP… more than three times what the CBO projected back in 2007.
(Bear in mind that TOTAL government debt in the US is $20 trillion, around 106% of GDP.)
In other words, the CBO’s projection was wrong by $10 TRILLION.
That’s not to take anything away from the CBO; as the old saying goes, predictions are hard, especially about the future.
The agency is clearly doing its best to objectively highlight the obvious (and dangerous) trend of rising debt levels in the Land of the Free.
Their math just happens to be off by an order of magnitude.
It’s not just the CBO either.
As I frequently write to you, each year the Board of Trustees of the various Social Security trust funds releases a report detailing the dismal finances of that program.
In the Trustees’ 2005 report, for example, they projected that the trust funds would be “fully depleted,” i.e. completely run out of money, in the year 2043, nearly four decades later.
Eh, who really cared… 40 years was such a long time away.
The next year in the 2006 report, however, their estimated year of depletion changed to 2040… 34 years in the future.
By 2010, it had changed again to 2037… 27 years into the future.
And from last year’s 2016 report, the estimate changed yet again to 2034, just 18 years into the future.
Notice the trend? In a little more than a decade, the Trustees’ estimated date when the trust funds would be fully depleted has accelerated by 9 years.
In other words, the closer we get to the date, the more accurate their calculations become, and the faster they believe the trust funds will go bust.
Again, it’s hard to fault the trustees.
They have the right message: Social Security is going broke. They just happen to have been too optimistic in their timing.
It mystifies me how this is not front-page news on a daily basis.
I mean, the implications are enormous; the people who run the Social Security program are saying, flat out, that they’re running out of money and the program will have to curtail benefits.
And the guys within the government who watch over the budget are shouting from the rooftops that the national debt poses substantial risks.”
I imagine most people would probably agree that this stuff matters.
It just doesn’t matter to them today. Or tomorrow. Or next year.
It’s easy to put off obvious and dangerous consequences that won’t strike until several years into the future.
Such short-term thinking is in our nature as human beings.
It’s why we eat garbage foods that poison our bodies… because the life-threatening diabetes and heart disease won’t hit us for another couple of decades.
This is a dangerous gamble, especially considering that there are countless solutions to distance yourself from the impact of your government’s serial irresponsibility.
For example, there are plenty of options to establish a far more flexible, robust retirement structure like a self-directed SEP IRA or solo 401(k).
These plans allow you to save more money for retirement, cut your administrative costs, and realize far better returns in alternative asset classes.
As an example, instead of stuffing all of your retirement savings in an overpriced stock market, your IRA or 401(k) could own a profitable private business or royalty stream that consistently pays strong, healthy cash flow month after month.
This way, when Social Security does go broke, you won’t be affected one bit.
No one else can make this a priority in your life but you.
I’ll say it again: all it takes is the right education, and the will to act.
Kwiechow Moutai, maker of the fiery Moutai liquor, is making a strong comeback. A noticeable easing in China’s anti-graft campaign, together with recent moves to re-invent itself as a brand for business elites rather than a product reserved for official banquets, helped to generate record sales.
The Swiss bank’s top executives have been criticised by shareholders over excessively high pay.
Cory has a common question: how long should you stay in a job with no career advancement potential whatsoever?