Wealth and Wisdom: Week of August 31, 2026
- 6 hours ago
- 4 min read
It was 1981, my first full year out of college. It was also Ronald Reagan’s first year as president, and I remember him making a big deal out of the fact that the federal debt – the total sum of money owed by the U.S. government – had topped one trillion dollars.
That now sounds like a line from an Austin Powers movie. Earlier this month, the federal debt hit 40 trillion dollars.
Watching our government live beyond its means was a big deal in 1981, and it’s a big deal today. The current Treasury secretary believes the U.S. can “grow its way out” of the debt crisis – despite the fact that government spending is already growing faster than the income of American workers and the economy at-large. And there are some who believe the problem isn’t excessive spending and borrowing, it’s simply how we choose to look at it (see Item #1 below).
Yet I can’t get past the facts presented in a frightening opinion piece in last Wednesday’s Wall Street Journal, aptly titled America’s Spiraling Debt Crisis (subscription required). Interest on the federal debt is now the third-largest category of government spending – more than we spend on the national defense. For every $100 the government collects currently, it spends about $19 in interest on the debt. And the Congressional Budget Office now projects that within 10 years, about two-thirds of the money we borrow each year will be used just to pay interest on money we already owe.
I won’t pretend I’m smart enough to know how all of this will end – or when. But I know if you and I were ever in hock that deep, no one would be coming to bail us out. Perhaps we should ask those who’ll be asking for our vote this November to explain their plan for fixing this.
$40 trillion is a big number – and it could be holding back economic growth. But it’s more of a manageable crisis than a ticking time bomb. (Reading time: 3 minutes)
They’re up more than 50% on average since 2020 due to rising costs – making it less attractive for senior homeowners to move. (Reading time: 4 minutes)
A well-known market indicator is flashing red – but it tells investors very little about when the next downturn will happen. (Reading time: 5 minutes)
I’m really becoming a fan of Morningstar retirement columnist Christine Benz – as she becomes a bigger fan of quality financial advice. (Reading time: 5 minutes)
Some of these seem obvious. Others you might not have considered. And all of them combined could help you have more money when you retire. (Reading time: 2 minutes)
Don’t just leave all your savings languishing in the money market option. Consider this 3-step approach for making it work harder and earn more. (Reading time: 8 minutes)
Spreading Roth conversions over several years can make taxes less painful in retirement – especially if your goal is retiring early. (Reading time: 6 minutes)
Yes, they are easier to access without penalty than traditional IRAs – but withdrawing from your Roth now is a decision you’re likely to regret later. (Reading time: 3 minutes)
Anything that lowers your income can also lower what you pay for health care in retirement. (Reading time: 6 minutes)
Recent tax law changes have made DAFs more attractive as a vehicle for making charitable contributions. (Reading time: 5 minutes)
Words to the Wise
“What's the investment I ever made? Charity. I never lost a dime.”
– John Templeton
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