The Green New Deal and Why YOU Should Worry
You’ve no doubt heard about the “Green New Deal” legislation proposed by freshman firebrand Rep. Alexandria Ocasio-Cortez (D-NY). It reads like a socialist wish list for a completely re-made, government run US economy. Nearly all sectors are addressed.
Paraphrasing, in a nutshell:
Healthcare: government’s giving all of it away for FREE!
Transportation: Goodbye cars and planes. Hello, light rail!
Education: (see healthcare)
Jobs: Eh, work if you feel like it. The government will pay you either way.
Housing: (see healthcare)
Lots of people have been able to work out a few problems with this plan. For one, it is a recipe for total economic dysfunction. It is not being taken seriously.
Or is it? It has 78 co-sponsors among both chambers of Congress and Mitch McConnell wants to bring it to the Senate floor for a vote.
What if it passed?
If it passed, the payment plan attached to it is coming straight for your portfolio.
Modern Monetary Theory Explained in One Tweet
This tweet is from a notable PhD economist who is taken seriously enough to advise Democrat lawmakers in the Senate. She is one of the biggest and most visible proponents of Modern Monetary Theory (MMT) and she is advising Bernie Sanders and Alexandria Ocasio-Cortez. The Green New Deal has 3 announced presidential contenders as cosponsors and is getting a vote on the Senate floor. Are you still laughing?
Modern Monetary Theory (MMT) postulates that government can spend whatever it wants by simply printing up money and then taxing away the inflation. Like a petulant child who is never disciplined or shown consequences of bad behavior, who is coddled with participation trophies and A’s for effort all their life, MMT observes what government has already been doing - and getting away with so far - and doubles down on it with a straight face and no apologies.
Instead of fixing our looming financial crisis and getting our house in order, MMT seeks to codify our mistakes into law. That should go well…
Proponents of Modern Monetary Theory think they have stumbled upon some radical, game-changing secret economic sauce to revolutionize the world and bring about perfect, government-funded social justice. They see rainbows and unicorns, ice cream and puppies.
Others see an economy with all incentives removed, and every possible disincentive to productivity injected at every turn. We see rampant inflation and a screaming red bullseye painted squarely on your portfolio. And of course, we see Venezuela, North Korea, the Soviet Union, the Weimar Republic and every other government that has come to power promising utopia and food for no work.
Ideas like this make the dollar an economic whipping boy, abused and beaten down from all possible angles. Profligate government spending, handouts, inflation and taxation… a 100% dollar denominated portfolio doesn’t have a prayer in a scenario like this.
It was nice to hear Trump proclaim that the US will never be a socialist country in his State of the Union address.
However, Trump is 72 years old. AOC is 29.
She is the youngest woman ever elected to Congress. She is the first of the millennials who are all grown up now and ready to lead.
Friends, you need to prepare yourself for the possibility of more of AOCs ideas coming to the forefront in the future. The Green New Deal may be a laughing stock now, but a lot of the younger generations believe in this stuff. Frankly, socialism and communism have been white washed in modern history books. A lot of millennials aren’t laughing at these ideas. They are determined to repeat these mistakes for themselves – in your lifetime.
If this is the way the wind is blowing, the 70% top marginal tax rate she proposes will become a reality, and will do what other tax brackets tend to do: creep. It will apply to lower and lower incomes, and get higher and higher. These outlandish proposals are always ushered in on class resentment, promising to affect almost no one. They creep down until they eventually apply to the broader upper class and then the middle class and then to anything that moves.
If you don’t have a shelter in place for a future that looks like that, you need to start planning for that very real risk today. Our experts advise to move some of your dollar denominated assets into physical gold and silver as soon as possible. Call us today to get started!