Reaganomics 2.0 On Steroids...

The Return Of Small Government...

Above Average Info For The Average Joe…

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SENSATIONALISM IS THE NEW JOURNALISM…

On any given day, you will find a treasure trove of misinformation being quoted on social media from the fake investment gurus acting as an unregistered broker to the uninformed consumer who spits the regurgitated, un-researched falsehoods as gospel facts.

Regardless of what is stated or rumored, it is the job of the listener to verify before they trust, whether it’s bogus misinformation about the big beautiful tax bill, a miracle trade, or a life-changing investment. Just because it goes viral and triggers an emotional response doesn’t make it true.

Unfortunately, we are in a time where the news is based on biased opinions and reshaped facts. The information circulated around the world has become one big episode on the National Enquirer for the sake of clicks and ratings.

Sensationalism is the new journalism, and social media is like the gossiping family member you don’t tell a secret to, because by the time you hear it, there will be 10 different versions of it and all untrue.

Especially if it’s political—politics has become so polarizing that facts may be removed to prove an emotional point.

Take, for instance, the big beautiful tax bill; the propaganda started the moment the trigger words, SNAP benefits, Medicaid, and Medicare were mentioned.

And while these programs have been greatly altered, which can adversely affect millions of people, it doesn’t give the speaker of misinformation the authority—to the point where it’s outright fear-mongering.

Like the rumor that the president has the right to delay or cancel elections—this is entirely false. The legislation contains no provisions granting any president the authority to postpone or cancel federal elections. Such a change would require a constitutional amendment, not a tax bill.

Or the claim that the bill is only a tax break for billionaires, taking from the poor to give to the rich.

This is misleading. Independent analyses show that all income groups would see some tax relief, but the highest earners would benefit the most in dollar terms. However, the largest percentage reduction in tax liability is for low-income workers. The rhetoric from both parties exaggerates the bill’s impact for their own political purposes.

And while the glass is definitely half empty for those who are less fortunate—for those who have the gumption and creativity and the ability to see the sunshine pass the rain, the bill provides a wonderful amount of benefits for both small and large business.

It’s your choice to change or stay the same.

There is a huge opportunity to build generational wealth if people would do more elevating and less complaining. Instead of complaining about 80 hours of work a month to maintain a government assistance program, how about look at the glass as half full. You can make more from the hours you put in.

Maybe it’s me, but then again, they say a kick dog screams loudest.

Perhaps it’s time to look at the real opportunity and start doing some of the kicking for the welfare of your families and legacies.

 

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REAGANOMICS 2.0 ON STEROIDS…

While the stakes are high, President Trump's Big Beautiful Bill is putting the economy, its people, and their opinions to task.

The actual debate will be between the illusion of its benefits and its positive or negative impact, which will surely polarize and charge the opposition—if you can escape the irrationality of the emotional context on both the democratic and republican parties, which is sure to hold convincing argumentative views on the benefits and detriments on the now passed tax bill.

A blind man could have seen this outcome coming; Trump's party is the party of Trump's will, so there will be the appearance of dissension, but what you are witnessing is a negotiation over who gets the biggest piece of pork in exchange for their compliance and vote.

And while Main Street argues over SNAP benefits and Medicaid, there is actual sausage being made all across America in both small and big businesses and households that are truly impacted, unfortunately and fortunately.

Sure, there are some negatives like the increase in the national debt by an estimated 4.5 trillion over 10 years, which amounts to 500 billion a year, which can have an exponential impact if the government doesn’t exercise fiscal restraint.

Currently, the national debt has been increasing by 1.56 trillion a year, which, if you do the math, can increase to over 2 trillion a year.

And will the tax bill reduce spending by 1.2 trillion? That’s a drop in the bucket if the rate of spending is not curtailed. The positives of the bill, although contested violently, have an overwhelming implication on business, both big and small, as well as the American people.

The argument begins with the reduction in public assistance, i.e., SNAP benefits.

But when you look from a common-sense perspective, it might have the impact of increasing the labor participation rate, which currently sits at 62.3%.

The question to be pondered is why not put able-bodied Americans to work instead of relying on the hands of big government? When you drill down to the base argument and look at the barriers of entry, the 80-hour requirement a month or 20 hours of work a week, which includes volunteer work or proven trade for services, is not a huge deal to swallow.

The second major opposition is the cuts to Medicaid, which have the potential to have a more adverse impact.

The bill makes substantial reductions in Medicaid funding, with the Senate version cutting about $930 billion over a decade and the House version cutting nearly $800 billion.

These cuts are expected to result in millions losing Medicaid coverage—the Congressional Budget Office estimates nearly 12 million more uninsured people by 2034, under the Senate plan, and nearly 11 million, under the House plan, primarily due to Medicaid cuts.

The legislation imposes work requirements for Medicaid eligibility, for adults ages 19-64, who gained coverage through ACA expansion. It also limits funding that states can send to health care providers treating Medicaid patients, potentially reducing access to care, especially in rural areas.

New paperwork and eligibility requirements are likely to cause even eligible people to lose coverage due to administrative hurdles.

When it comes to Medicare:

The White House and bill supporters insist that Medicare benefits are not cut in this legislation—no provisions reduce spending on Medicare benefits or eligibility.

However, some critics argue that broader budget changes could put future pressure on Medicare, but there is no direct reduction to current Medicare benefits in the bill.

The biggest winners in the tax bill are Corporations -

The bill permanently reduces the corporate tax rate from 35% to 21%, cementing the trillions of dollars in corporate tax reductions established during Trump’s first term in 2017. It also extends or amplifies tax breaks for business investments, including those related to new machinery, equipment, and research and development.

Small businesses are being described as “big winners” of Trump’s tax bill according to The Marks Group CEO. They will benefit from the tax incentives and cuts designed to stimulate domestic investments.

For Higher-Income Households - The big beautiful tax bill greatly expands the amount of state and local taxes households are able to deduct from their federal taxes. Higher-income households will be among the biggest beneficiaries of these tax cuts.

American Workers with Specific Income Types - The bill includes provisions for “no tax on tips, no tax on overtime pay, no tax on car loan interest”, which will benefit workers in service industries and those who work overtime.

Seniors - The legislation provides specific tax relief for seniors.

 Businesses in Opportunity Zones - The bill extends tax incentives for businesses investing in disadvantaged areas, known as Opportunity Zones, through 2033.

The trump accounts are an awesome addition to this controversial bill.

The accounts work just like an Individual retirement account where the government will put 1000 dollars into and account for any child born into the United States. Deposits can be made from family, friends or guardians up to 5000 in a calendar year.

These proceeds can only be invested in low-cost index products like the S&P 500. This is exciting because if let’s say a family only donates 15k over three years and leave the account invested for 65 years if the account earned the average of 10.6% the account will be worth $10,475,493.99, how’s that for assuring a legacy and a retirement.

There are surely some pros and cons and although Trump’s bill has a hint of Reagan’s trickle-down economics.

If the full potential of the bill is execution on a business level, we could see an expansion in the participation rate. We could also see an increase in business investment stateside, inclusive of hiring, expansion, and innovation.

And when combined with the potential of lowering interest rates, this could be explosive for growth.

And if we can increase GDP while stimulating growth with low inflation, this could be a recipe for a booming nation.

This big, beautiful tax bill is reminiscent of the Reaganomics days with trickle-down economics, it’s a small government approach that promotes free enterprise.

The only problem is economist say it didn’t work for Ronald Reagan; in fact, there are studies that tax cuts for the wealthy don’t work, finding that there is no significant increase in GDP or job creation, which translate to the rich getting wealthier and the poor getting the short end of the stick so why would it be any different now.

Good thing the numbers tell more truth then politicians and there pocket fed economist are willing to admit, below is a chart of GDP during the Ronald Reagan years.

Numbers Don’t Lie

I guess if they are forced to build more stateside, this will create the job creation that we didn’t see during the Reagan days. And if this increases the participation rate and puts more dollars in the consumers' hands, it might just have a positive impact on GDP and eventually the deficit.

At the end, it will come down to the impact of big government versus small government and points in between, so buckle up…. it's sure to be a bumpy ride.

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Kevin Davis Founder of Investment Dojo and Author of The C.R.E.A.M. Report

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