The Only Thing Americans Should Care About

Debt is a cruel master. In three years all Americans will learn how cruel. 

This year the Federal budget deficit will exceed half a trillion dollars. This deficit will add to the nations total debt which is nearing 20 trillion dollars today. US GDP is only 19 trillion so American citizens owe more than our economy generates each year. By 2019, Federal entitlements, interest on the debt and defense spending will absorb every penny of revenue that the government collects from US taxpayers. 

In 2019, growth in Medicare and Social Security spending alone will push the annual spending deficit from 500 billion to 750 billion dollars. If the government wants to spend money on anything other than entitlements, debt and defense in 2019 they will be forced to borrow the money. 

Created by The Concord Coalition

According the the St Louis Fed, "Since August 2008 the Fed has tripled the monetary base from about $0.8 trillion to $2.7 trillion." This emergency expansion of dollars was arguably a temporary increase to counteract the recession. This "temporary" increase will become permanent and look like a drop in the bucket after 2019 when the Fed has no choice but to further monetize the debt. This looming debt disaster will be a crisis for the history books. Courageous political leadership may minimize the problem but it cant be avoided.

Looking at the immediate picture makes matters worse. The Atlanta Branch of the Federal Reserve says that our current economic output has almost ground to a standstill.

Root Mean Square Forecast Error of GDP Growth (SAAR) for GDPNow Model

Even the Feds economic measures acknowledge a slowdown is building. Imagine for a minute how bad the debt problem will get if we face an economic crisis or recession and the Fed accelerates the debt and monetization timetable. What else will matter at that point? Do you know how to position your investments to weather this? Contact us if you need help.


When Congress allowed the Emergency Unemployment Compensation program to sunset in 2013, Republicans were vilified for enacting such a draconian measure. In hindsight it worked and resulted was a surge of “long-term unemployed” workers going back to work. In 2014 unemployment steadily declined from 6.6% to 5.6% in 2014.

At the start of 2016 unemployment stood at a healthy 4.9%. The only remaining conundrum was how to get more able bodied Americans workers back into the labor force. That appears to be happening this year. The March employment report included an observation that after a decade long decline the labor force participation rate continued to inch up from 62.6% at the end of the year to 63% in March.

Where and why are workers finally starting to emerge from the abyss of the great recession? It’s not demographics or economic strength. Once again it appears to be sensible changes to government food assistance programs. We used to call them food stamps but nowadays the 74 billion dollar Federal food program is called Supplemental Nutrition Assistance Program or SNAP.

Starting in April, SNAP benefits for able-bodied adults without dependents (ABAWD) will be limited as Congress passes more authority back to states to make the program more efficient. 40 states will limit the able bodied to 3 months of benefits every three years. I will be watching the labor force participation rates in these states to see if they vary from other states who aren’t limiting food stamps to the most needy. I would wager that the 3 month participation rate trend will grow as people who can work are nudged back into the workforce.


Time to Jump?

It’s a day that only happens every four years.  Just like the Olympics and Presidential elections, we observe Leap Day today.   The extra date on the calendar brings an extra day’s pay for some and explanations to kids on why February doesn’t always have 29 days.  Then tomorrow March rolls in and we push on towards Spring.

Because it takes more than 365 days (365.24 to be exact) for the Earth to orbit the Sun, Pope Gregory XIII added February 29 in 1582 to what we now know as the Gregorian Calendar to synchronize the solar calendar to the ones that we hang on our walls.  So, what do we do with the extra day?

I then began to think about things that I do once every four years.  I vote in the Presidential elections, watch the Olympics, and usually clean out my sock drawer. Others will attend a high school or college graduation or buy a new car.   But with only one extra day every four years, how do you make it count? What makes it different than any other Monday?

The word leap is defined as jumping or springing a long way.  In the past four years, have you leapt forward towards financial freedom?  What changes have you made to ensure your success in meeting your financial goals?  We are all four years older since the last time we saw the number 29 on our February calendar.    Live up its namesake and use this day to take the next leap towards planning for your future. For some, that could be developing a budget to control spending urges.  For others, it could be consolidating old retirement accounts to invest with a purpose.   

Whether it’s your first leap or your fiftieth, take advantage of this extra time to plan for your future.  You’ll have to wait four more years to have another day like this.


Super Bowl Sunday Prep List

Wow your guests for the big game with these essentials

Sound System Upgrades – Porsche 911 GT3 Soundbar

Wearable Subwoofer Vest


Table Decorations – Grass Table Runner 

Fashion Swag - Vintage 70’s Big Mac Belt Buckle


Food- Potato and Mozzarella Croquettes

Condiments – Sriracha2Go

Fanduel / Draft Kings Parlay Cash – Prop Money Series 2000s Blank Filler Bundles $500,000



Gear - LeatherHead Black Bison Football


Extra Drink Storage - Marshall Beverage Vault

Additional Seating – Tailgate Backpack Cooler Chair


Don’t Forget your millennial hipster guests - Beard Wipes





Which Tax Payer Are You?

Taxes = Fear, I don’t know where to start.

Taxes = Worry, I hope this software works!

Taxes = No big deal, my people have this under control.

Within the next few weeks, you will have most of your information to file your 2015 tax return, and some of you will rely on me or another CPA to help you through that process.  Hopefully, when the process is complete, you will feel a sense of calm about filing your tax return.

The IRS and Congress don’t make it easy to feel that sense of calm.  As has become the norm lately, Congress waited until December to pass a tax deal that was retroactive for all of 2015.  However, this deal did make some breaks permanent, which will allow us to plan for future years. 

Some of the tax breaks that have been made permanent are:

  1. Tax-Free direct payments from your IRA to a charity of up to $100,000.
  2. The itemized deduction of state sales tax for those in states without an income tax.
  3. The write-off of $250 for teacher classroom supplies

On an almost daily basis, I see the fear and worry that many people harbor deep inside them related to taxes and the IRS.  Those feelings come from the abundance of difficult tax codes and horror stories circulated through social media.  If you are tired of the anxiety that taxes bring, I’d love to assist you in a transition to quality professional tax preparation. 

The transition can be easier and less expensive than you may think.  At Leconte Wealth Management, our clients have tax preparation included as part of our comprehensive wealth management package.  If this sounds like an appealing option to you, please give us a call.


Groundhog Day - Making the Most of "Life Resets"

As we tire of winter, pine for warmer days and look to Pennsylvania for hope, I wanted to revisit the enduring theme from Bill Murray’s 1993 classic. To quickly recap for the 5% of society that hasn’t see Groundhog Day, Mr. Murray plays Phil Conners a misanthropic weatherman who loathes the monotony of the Groundhog Day remembrance but is forced to cover it for his local station. Through freak circumstance he finds himself stuck repeating, repeating the day and its events. Phil isn’t released from exile until he confronts and corrects his moral defects. As he triumphantly reinvents the worst day of his life into his best, he finds freedom and happiness.

Like Phil, we inevitably face moments where we have to it the reset button. In 2016 you may encounter something on your personal or professional life that requires a fresh perspective. It could be a financial or health issue that forces you to change courses. Each of these scenarios will require a different response to find a workable solution.

After a 5% loss on the S&P and a 7.8% loss on the NASDAQ, investors are looking at the worst January in memory. They need to discern if this is the start of really bad times or time to buy more. Here’s my decision tree for investment uncertainty:

  1. Understand where you are.
    1. How old are you?
    2. How much time do you have to invest before needing your funds?
    3. What caused the declines in your portfolio?
  2. What is the worst case scenario?
  3. Is there an opportunity for improvement in this?
  4. Who can help me get through this?

This list is helpful beyond investment problems and number 4 is the most critical advice to follow. Don’t go through it alone. You have people around you that can offer help and encouragement. A little hint, they are usually the folks who have already hit the “life reset” button a few times themselves.

Phil Conners learned that we are only destined to repeat mistakes if we fail to recognize that a change needs to happen. Use Life Resets as an opportunity for growth and stronger relationships.

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