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Life Health > Health Insurance > Life Insurance Strategies

Has the debt got you down?

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Last week I was doing a little spring-cleaning in November. I knew it was time when I tried to open a desk drawer and couldn’t yank it open without the help of a crowbar.

One of the things that struck me as I began tossing out old files is this: The more things change the more they stay the same.

I ran across an old column and some notes I’d scribbled from a conversation I’d had with top producer, Van Mueller. The content I found could have been written yesterday or the days leading up to the election rather than a few years ago.

I found one thing in particular that I’ve heard Van say on more than one occasion: “Don’t confuse the debt with the deficit.” It’s sort of a rallying cry with him and something I’d jotted down on a notepad I was recycling. And then I dug up a column of Van’s that’s as valid today as it was in 2011 or 2010 or 2000.

  • The deficit is the measure of what comes in versus what goes out on an annual basis. Last year our tax revenues were $2.3 trillion, and we spent $3.8 trillion. Our deficit was $1.5 trillion.
  • Don’t confuse the debt with the unfunded liabilities for programs like Social Security, Medicare and Medicaid. Social Security alone has an unfunded liability estimated at $19 trillion. That means we would have to set aside $19 trillion in a fund immediately to keep the promises we made to all potential recipients. The figure is not absolute, because we could change the program any time, which would increase or decrease the program’s unfunded liabilities.

As Van wrote and explained to me: Those are deficits. But what he constantly harps on if you have a chance to read his columns or have had the good fortune to hear him talk in person is debt. “Debt!”

Do you remember hearing talk of “debt” over these past few weeks as we slouched toward the finish line in our elections? Please don’t take this question as an indicator that I’m siding or not siding with any party or person. People read too much into something by what their own opinions are. I didn’t know this until I was called a right-wing whacko and a red-shirted commie for the same article. Yes, the same article. Just goes to show how different people perceive the same content.

Anyway, getting back to the debt problem, which really is a major problem. Can’t we all at least agree on that? I hope so. The Congressional Budget Office reports that not only is our national debt in the trillions today but they predict it will be $20 trillion in debt by 2015, $25 trillion in debt by 2020 and $27 trillion in debt by 2021.

Those numbers are unseen in our history. But in such cases, I harken back to the words of Van Mueller:

“Agents and clients alike often portray this message as one of doom and gloom, but that misses the point. The message is not negative. Instead, our message should be the Boy Scouts’ motto: ‘Be prepared.’” As Van says: “I am able to diffuse any self-defeating emotions and move toward solutions with a few great questions.”

  1. Have there been bad financial times in the past?
  2. Did some people still make money during those bad times?
  3. Who prospered — people who planned and prepared or people who didn’t?
  4. Which one do you choose to be?

I encourage you to leave a comment below on your preparations for the snowballing national debt or how you overcome emotional clients. Or you can send me an email at [email protected].

For more from Daniel Williams, see:

When good clients go bad

Rocked at NAILBA

3 ways to deal with distressed clients


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