Threats to Your Economic Future
Written by Hank Brock, CPA, MBA, CLU, ChFC
What is ahead? Let's take a look:
Increased psycho-media risks. Select industries may be sacrificed in order to sell newspapers and magazines. If your industry or company gets in the cross-hairs, you are dead. More on psycho-media risk in future posts.
Class warfare. We have an increasing risk of a wealth tax, increased income taxes on the most productive in society, and riots and strikes incited for political gain by closed organizations. Those who went to college -- who got training and education, took risks, worked hard, saved money -- may be targeted by those who did not.
Increasing natural disasters. Drought, hurricanes, earthquakes, and blizzards may cause company and geographic shutdowns, resulting in increasing volatility in investment markets as well as shortages of food and the supply of raw materials.
Spiraling budget deficit. Spiraling inflation and volatility in the financial markets may cause capital to dry up as investors are unwilling to finance the budget except at super-high interest rates.
Diminished financial incentive. Inflation, a confiscatory tax structure, and instability may result in diminished financial incentives to grow a business, hire employees, and take risks.
Curtailment of freedom and economic incentive. Stifling government regulations, red tape, and involvement in a myriad of complex laws will cause those who would invest in a company to look elsewhere.
Tort risks. The average American already pays more than $1,000 per year in the increased cost of goods and services to pay the unnecessary costs of frivolous and exorbitant lawsuits, claims, class-action suits, and damages. Everyone is at risk, and everyone pays for it.
Sin taxes. Taxes will be increased to cover the increasing costs of social programs gone awry and the natural consequences of lifestyle: We will be financing increased numbers of latchkey children, teenage mothers, prisons, AIDS carriers, and substance abusers. While most people despise drug dealers, the entertainment industry (rock bands, Hollywood sitcoms, etc.) are usually subtle, but occasionally overt in their role as the new drug pushers to children. The additional taxes paid by those involved in the societal shifts cannot begin to pay for the increased governmental programs or costs to society.
Diminished productivity. An increasing number of people simply do not know how to work. And people who do not know how to work are vulnerable in a layoff.
Debt. Those in debt will be especially vulnerable to economic volatility, unemployment, or loss of their homes. What do we do as individuals if our highly leveraged economy hits a flash point and begins a domino collapse? What might cause such a flash point? Perhaps another president who re-ignites inflation, causing investors to begin selling their government bonds. Do you recall when the Mexican peso collapsed in late 1994 and the United States stepped in with $20 billion to support their economy? Unlike Mexico, there is no economy in the world large enough to save us.
A society without laws. At this writing, a new threat called "jury nullification" is gaining ground. The press is presenting it as though it has broad support. It says that jurors should vote however they want in determining guilt, regardless of whether facts prove a law has been broken.
(Proponents call this "vote your conscience.") An article in the Yale Law Review argues it is the "moral responsibility of black jurors to emancipate some guilty black outlaws," and that the slum drug dealer or thief who robs a wealthy white family should be acquitted. Their argument is that these criminals are actually victims of unfair laws. Sophisticated lawyers know how to stack a jury. The rule of law is lost. Where there is no consequence, there is no law. Anarchy reigns. No one is safe. The laws of our elected representatives are rendered impotent.
Isolationism. Without free trade, our standard of living is suppressed. That is not all: Isolationists are more prone to war. History shows those countries with a closed society are more apt to be the aggressors in pursuing the wealth of their neighbors.
Closed organizations. These secret societies have learned to manipulate a sympathetic press and society with their agenda. Without discernment, their rumors, "facts," sophisticated arguments, "rights," and "calculated courtesies" become social norms and are foisted upon the unorganized majority. They distort, disrupt, deceive.
They talk about the rights of owls, children, and anything else that cannot accept responsibility. The result? Diminished rights for everyone. By detaching rights from responsibility, they rob freedom from those who are responsible citizens. Rights can only belong to those who can be responsible, because without one you cannot truly have the other. (The correct relationship of responsible citizens toward those who cannot accept responsibility is that of sacred stewardship.)
Closed organizations are subtly promoting most of these threats to our future.
Covetousness of the idle. People who will not work -- but who want the same things as those who will -- will lead to increased crime, threats, robbery, rioting, and class warfare.
Usurping power from the governed. Increasingly, the governed are being led to believe that they get their rights from the government. The opposite is true: The government gets its privileges from the consent of the governed. Regulators write regulations with the force of law (legislative function), execute their enforcement (executive function), and adjudicate resolutions (judicial function) without any checks and balances. They have become all-powerful dictators over their serfdom.
Insidious taxes. Tax on wealth lays a heavier burden on the backs of the productive while the unproductive reap the benefits. Natural economic laws dictate that this system proliferates the poor. You simply can't give people incentives not to work, then expect them to work. By the same token, you can't punish the workers and expect increased productivity and an improved standard of living for all.
Divorce. If you want to kill your financial program, security, and growth, get divorced. The traditional family will always be the most efficiently designed and supreme economic unit, unequalled in its power to yield a superior standard of living.
Speculation. A something-for-nothing attitude causes increased volatility in the financial markets. This get-rich-quick mentality is promoted in the financial press, magazines, on late-night television, and elsewhere because it sells magazines and appeals to the greed motive.
Ignorance. As our schools have issued revisionist history books, they teach politically correct attitudes about society, yet leave untaught the founding principles upon which our nation was established. Our children are left ignorant of their heritage of freedom. They don't understand true economic and political principles about our inalienable rights and responsibilities as citizens. As a result, they will be left unprepared to counter the onslaught of sophisticated arguments.
How can you be prepared for the future?
Simple: Put your own house in order. You may not be able to influence political, social, or economic trends, but you can do things to prepare your own financial security. When you are prepared, you will not fear.
Those intent on self-destructive lifestyles always destroy themselves. That's the natural result of breaking oneself against correct principles.
But if you make correct principles work for you, you will survive. Those correct principles include freedom, prudence, balance, conservatism, savings, self-reliance, work, and all other laws that naturally yield money happiness, security, success, and peace of mind.
The economic principles discussed here are natural economic laws. They occur just as surely as the sun rises in the morning. In their pursuit of power and gain, closed organizations will use whatever means necessary to achieve their ends, which includes usurping the rights of free people. The economy will never grow in the absence of free specialization and exchange. Wealth cannot survive without economic incentive and freedom. And no individual can be completely secure without adherence to correct principles.
For more ways to insulate yourself from these volatile times, schedule a time to meet with our qualified financial consultants.
Hank Brock is president of Brock and Associates, LLC, a personal and business consulting firm specializing in asset protection and wealth preservation. Portions of this post were taken from "Your Complete Guide to Money Happiness," written by Hank Brock and published in 1997.
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