Where did America go wrong?
By Paul Cross
Annuity National Brokerage Co.
“Blessed are the young for they, once again, shall inherit the national debt.”
You likely already know President Franklin D. Roosevelt said, “The only thing we have to fear is fear itself,” but when did he say those famous words?
Most people think it was during the days of Pearl Harbor, but was it?
First, President Herbert Hoover said, “Blessed are the young for they shall inherit the national debt.” And so we did.
Then, on March 4, 1933, President Roosevelt during his inaugural speech that occurred in the middle of a bank panic said, “The only thing we have to fear is fear itself.” And he implemented legislation that motivated the people into making impossible dreams come true.
The young, now known as baby boomers and seniors, inherited the national debt and turned the world around. Generations of people worked hard, saved and invested wisely and built the world’s strongest economy.
It was the boomers and seniors who overcame the challenges of the Great Depression, building business and creating more jobs, putting more people to work, earning more money, saving and investing wisely, building new communities and improving living standards while creating record sums of cash flow pouring into the federal and state governments in the form of taxes.
State and federal governments with a cash- flow-windfall could not manage a budget. With the greatest cash-flow-windfall, governments increased taxation and continued to increase spending.
So where did America go wrong?
In spite of higher taxes, the people were wisely accumulating wealth and building new and larger homes, creating more cash flow for the governments. Politicians leveraged every penny into the largest national debt ever and then almost let it default — with only one solution. Increase the debt limit and take a downgrade in ratings.
Government revenue soared as people earned more income, built larger homes and paid more real estate tax, more sales tax and more income tax, played the lotto and played the casinos. But the local, state and federal governments couldn’t and didn’t save a nickel. There is no federal cash reserve. In fact, debt soared at record levels and now, as a nation, we are downgraded and face austerity. So where did America go wrong?
Again, it was not the people that went wrong. America is where the people made impossible dreams come true, and so we shall once again. And, once again, blessed are the young for they shall inherit a national debt of $2 million per tax-payer household. You can verify the numbers at www.usdebtclock.org
George Bernard Shaw was a playwright, critic, political activist, Nobel prize winner for his contributions to literature, and Oscar winner for his play Pygmillion. He also wrote My Fair Lady. Shaw once quibbled, if you laid all of the economists end to end they still wouldn’t reach a conclusion.
Now, 60 years after George’s death, he is proven wrong. Economists around the globe have concluded income annuities can provide an income for life at a cost as much as 40 percent less than a traditional stock, bond and cash mix. Now how good is that?
How many of your clients and prospects would like to:
- Enjoy the same income with continued growth on 40 percent of their retirement plan
- Create an income-tax-free legacy with the additional income from the annuity, via a customized indexed universal life policy. Now how valuable would that be for the young who will inherit the national debt?
- Have the equivalent of an income from a million dollar retirement plan with a $600,000 roll over.
Note that while financial universities and economists around the globe were just catching on to the real merits of income annuities, the annuity companies were again a step ahead with the introduction of premium bonus annuities with special lifetime income benefit features. In multiple ways, for many people, premium bonus annuities with special lifetime income benefit features are more advantageous than income annuities.
Oh, but it doesn’t have to be one or the other. You could have both.
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