Our Addiction To Deficit Spending Is The Greatest Threat To Our Future Prosperity | Lyn Alden
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Today's guest has long been warning that the US -- as well as many other countries -- is now in an era of fiscal dominance.
That's when fiscal spending gets out of control, like a runaway train.
It becomes so large that it becomes the primary determinant of economic growth and inflation -- steamrolling over any impact of monetary policy or private sector lending.
At this time of this recording, the deficit for the 2025 US fiscal year is on track to be the 3rd largest in history, behind the COVID emergency spending years of 2020 and 2021.
The key difference , of course, is this time we're not facing a global pandemic and economic lockdown. Yet the profligate deficit spending continues unabated.
What impact is this having on the economy, asset prices, our currency's purchasing power, and social stability?
For answers, we are very fortunate to welcome back to the program Lyn Alden, investment strategist & author of the book "Broken Money: Why Our Financial System is Failing Us and How We Can Make it Better"
Follow Lyn at her website at https://www.lynalden.com/
Or on X at @LynAldenContact
#deficit #money #inflation
0:00 - Lyn’s Book Broken Money: Two-Year Anniversary Reflections
2:56 - How Have Things Unfolded Since Broken Money? Fiscal Dominance Persists
4:38 - New Administration’s Policies: Trade Focus Strong, Execution Mixed
6:13 - DOGE Critique: $2T Deficit Cut Unlikely, Targets Minor Spending
8:07 - Tariffs’ Impact: More Tax on Americans Than Trade Wins, Weak Dollar
10:45 - Tariff Uncertainty: Capex Hesitation Slows Economic Activity
12:30 - Fiscal Stimulus: Social Security, Medicare, Defense Drive Spending
14:58 - Deficit Composition: Social Security, Medicare, Defense, Interest Dominate
17:04 - DOGE’s Limits: Cutting Waste Sounds Good, But Popular Programs Untouchable
19:20 - Fiscal Dominance Challenges: Political Will Lacking to Cut Big Four
21:06 - Healthcare Costs: Structural Issues, Demographics Inflate Deficits
24:09 - Connecting Fiscal Dominance to Passive Capital Flows: Trade Deficit Fuels Equity
29:05 - Global Reserve Status: Dollar Demand Props Up Deficits, Asset Prices
31:00 - Near-Term Outlook: Stocks Near Highs, Economy Slowing, Medium Recession Risk
33:09 - AI Capex Risks: Overinvestment Echoes Dot-Com, Potential Pullback
35:44 - Recession in Fiscal Dominance: Shallower, Stagflationary Malaise
39:02 - Two-Speed Economy: Deficits Benefit Asset Owners, Hurt Middle Class
43:00 - Wealth Inequality: Top 10% Drive 50%+ Consumer Spending
46:04 - T-Bill and Chill Trade: Fading Rates Reduce Income, Ease Deficit Burden
49:36 - Bonds in Fiscal Dominance: Tradable Short-Term, Poor Long-Term Bet
51:42 - Asset Allocation: Banks, Energy Pipelines, Emerging Markets Attractive
56:50 - Cash Strategy: Hold Some T-Bills, Avoid Overvalued Equities
59:32 - Freedom of Speech: Bedrock Value, Decentralized Social Media Solutions
1:02:42 - Nostr Protocol: Open-Source Social Media to Protect Free Expression
1:05:37 - Where to Follow Lyn: LynAlden.com, Broken Money on Amazon
1:06:59 - Call to Action: Subscribe, Join Oct 18 Conference, Consult Advisors
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