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March 13, 2023 8:00 pm


MoneyWise / Rob West and Steve Moore

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This year, we want to be bold for the Gospel through our on-air and digital content, but we need your help.

To see our impact or give, visit Hi, I'm Rob West. I can add another question.

How would a debt crisis affect you? I'll talk to Jerry Boyer today to get the answers. Then we have some great calls lined up, but please don't call in today, because this program is pre-recorded. This is Faith & Finance Live!

Biblical wisdom for your financial decisions. Well, economist Jerry Boyer is president of Boyer Research and a frequent contributor to faith and finance, also a contributor to world opinions. Jerry, great to have you with us on the program.

Great to be with you again. Jerry, we're talking a debt crisis today. I know as you and I have talked recently, you've said that although in your lifetime you really haven't seen the possibility of a debt crisis here in the United States as plausible, that perhaps has changed given where we find ourselves today, especially in light of new data out from the CBO.

So give us a sense of where you're at with this right now. Yeah, I haven't seen it as plausible within sort of the investable horizon. I always acknowledge that there's the possibility of it eventually, but there have been a lot of predictions from our side. Even going back to Larry Brickhead, who's a terrific person who wrote, I don't know, was it 30 years ago about the coming economic collapse?

Maybe it was longer. And a lot of people on talk radio and sometimes people who are into prophecy or et cetera, there's been all of these predictions about a debt crisis and hyperinflation and a collapse of the dollar. A lot of fear mongering.

Remember the blood moons. Another example of that. And a lot of this stuff is wafted through the Christian community.

And people have asked me about it, and I said, well, let's look at the numbers. And we had manageable levels of debt. People were predicting a debt crisis under the Reagan administration. Well, except we had 20 percent debt to GDP ratio. Now it's 100 percent debt to GDP ratio. And we had growing population then. Now we have shrinking population and fastly shrinking population that's of working age. So we're kind of in a different situation. We're coming up closer to it. I'm not saying that we're facing that right now, but I am saying it is no longer a concern to be dismissed or waved away. It'll never happen and not thought about for people who are thinking about their financial future.

Yeah, that's really helpful. Jerry, obviously, the CBO out recently with an update on the numbers. Give us an overview. Well, the overview is that they added another three point one trillion to their expected debt, national debt over the next 10 years. And they last time they did a report like this, they had added one and a half trillion.

So they've added an upgrade to their previous upgrade. So they have been systemically undercounting the amount of debt. And by the way, they're talking about roughly an average of two trillion dollar deficit per year.

So people get confused about national debt and deficits. So think of the national debt as you look at all of your debt, your credit card, your mortgage, whatever. That's your debt. Your monthly shortfall is your deficit. So if you are one hundred thousand dollars in debt, let's say annual shortfall is five thousand dollars. Well, next year you'll be one hundred and five thousand dollars in debt.

And the year after that, you'll be one hundred and ten thousand dollars in debt. So the deficit is how much the debt is increasing. And now we're talking about deficits, not debt. The deficit is the annual shortfall of two trillion dollars a year.

So that's pretty serious. Also, I noticed that the Congressional Budget Office did not forecast a recession this year. Well, if we do get a recession this year, recessions always increase debt rapidly.

Why? Because there's more social spending and there's less tax revenues. So those two things kind of add up together to an increase in deficits, which means an increase in national debt, which means we move even more quickly towards that cliff of a debt crisis. And, Jerry, just for context, you mentioned the two trillion dollar deficit per year. How does that compare to our total GDP annually?

Well, total GDP, real GDP is about 30 trillion. So, you know, that's about, let's say, between six and seven percent because it does vary. That is manageable.

It's not great, but it's manageable. When the emerging market crisis occurred in the 90s, they tended to have deficits that were more like 10 to 20 percent of their GDP. So that's why a crisis, a debt crisis is not my base case in the short run.

Very good. We're talking about a debt crisis, the possibility of it and what that means for you. Jerry Boyer with us today, he's the president of Boyer Research and a frequent contributor here at Faith and Finance. Much more to come on this topic just around the corner. And even though we're away from the studio today and you shouldn't call in, we have some great questions that you're really going to enjoy as we continue to apply God's wisdom to your financial decisions.

We'll be right back. To see our impact or support this work, visit This is Faith and Finance Live with Rob West. Hey, if you hear a phone number mentioned today, please ignore that number and don't call us because today's broadcast was previously recorded. But we think the upcoming information will help you and make you a wise steward of what God's given you.

So please stay tuned. I'm so glad you've joined us today. Always good to have Jerry Boyer here along with us as well. I'm so thankful for his insights, his deep understanding of scripture and the historical perspective, but also applying those truths to modern day issues, which can be tough. You can check Jerry out.

He's active on social media. He's a columnist at World Opinions and he stops by here frequently and we always appreciate his visits. Before we head to the phones, just a reminder, this month we're featuring a new resource called Business God's Way to help you learn what God says about operating a business and handling money. It's a helpful guide for everyone in business, whether you're a CEO or a manager of a department, small business or large.

If your business is prospering or maybe it's struggling in these challenging times, no matter what type of business you have, I know this resource will be helpful for you. It's from our friend Howard Dayton, the former host of this program. Again, it's called Business God's Way and you can request your copy with a gift of any amount to Faithfi. Just simply go to

That's and click the give button and thank you in advance for your generosity as a listener supported ministry. It goes a long way. Now let's head back to the phone calls we have lined up. Let's begin today in Michigan. Hi, Richard. Go ahead, sir. Yes, sir. Brother Rob, I got a question about the national debt.

Sure. When families get into financial trouble, they tend to look around and see whether they can sell anything to get out of their predicament. Maybe the United States could sell off some properties that are owned and get the national debt lowered considerably, such as maybe Puerto Rico.

Yeah. You know, I think certainly when these biblical principles we talk about apply to individuals, but they also apply to nations. And I would agree, one of the things you do is you look at your balance sheet when you are in a difficult spot. But more often than not, really the primary driver of somebody's financial condition is their spending. And I think that's really the bigger issue we've got here, Richard, and that is that we've got to rein in our spending with government programs. We've got to balance our budget. We've got to get this debt going in the other direction. We've got to get away from these easy money policies that has created a lot of this with handouts and the printing presses running at full speed. And, you know, we've seen what's happened with our national debt as of late, and we've got to turn that around. And the long-term fix is being fiscally prudent and disciplined with the resources that we have in this country. And we've got to get that going in the right direction because, as Jerry will tell you, and I would agree, I think, you know, in a decade ago, we would have said a debt crisis here in the United States. No, not possible, and yet we see that as a real plausible situation in terms of a liquidity and a financial event related to our debt if we continue on this trajectory. Still a long ways off. I think grading on a curve, the U.S. is still in a much better position than the rest of the world in terms of the American consumer and our economy, the health of it, our gross domestic product. You know, we still are the largest and most robust economy in the world, and I don't see that changing. And yet we know that we've got to curb our spending so we can address these issues moving forward.

And, you know, the federal government has sold vast amounts of land in the past, and that's certainly something that could be looked at, but I think the spending issue is probably the bigger one. We appreciate your calling today, sir. God bless you.

800-525-7002. Ed, driving down the road. Ed, you keep your hands on the wheel, eyes on the road, but how can we help you, sir? I was calling a quick comment about the debt first. That is, if people don't think the U.S. can fail, look at Argentina after the Falkland Islands. But my question has to do with Social Security.

My spouse is three years older than I am. Oh, I'm losing you there, Ed. We're going to give you one more shot, and then we might need to wait until we get to a better cell coverage area. But let's try it again. We tried that question over again, sir. Okay. My question is, my spouse is three years older than me, and she's at the age now where she could start drawing her Social Security. Okay.

But we don't know and can't find anyone really to talk to about what are some of the ramifications and what are the decisions that you need to make in the process. Yes. You know, whenever something were to happen to me, she would be able to draw more off of my account. And so her account would be forfeited, but we can't find the answers about how to move forward.

Yeah. Well, I think the key is, and by the way, the Social Security Administration can be a great resource for you. And your bride could sit down with them and work through the various scenarios using the data from your actual work record and hers as well. The bottom line is, the longer she waits, the bigger her check will be by 8% a year, actually one-twelfth of 8% every month. So if she were to take it at 62, she'd have about a 32% reduction. If she were to wait and take it at age 70, it would grow by 8% a year beyond full retirement age. There is some strategies where, for instance, you know, she could begin taking hers if it's a lesser amount and let yours grow. And then if at some point her spousal benefit based on your work record, up to 50% of that is what a spouse is entitled to, is higher than yours, then she could switch to your benefit down the road. So there are a number of scenarios.

The opposite is true. She could start collecting her spousal benefit on you and then switch to her own after she lets that grow. So I think what you need to do is just, you know, look at your record, which by the way, you can go to and, you know, pull that record.

You'll see, you know, all of the high 35 there, the highest 35 working years that really inform that data online. Or again, you could sit down with them, but I think you're going to need to look at these different scenarios with your information in front of you. I hope that helps. We appreciate your call. Well, folks, before we head to this break, let me remind you, if you haven't checked out, that's, I'd love for you to do that. You'll find the best content in biblical finance there for you to grow in your understanding of managing money God's way. You'll find our community and the money management system. It's all there at

Now, again, a reminder, we're not here today, but more of your questions that we lined up after the break. Moody Radio Springshare event is happening now, and we need your help. Will you partner with us this year as we look to be bold for the gospel in 2023?

Last year we were able to reach deep parts of Africa, and this year we want to continue to expand our reach around the world. Whether you listen on air or online, Moody Radio needs your help. To learn more, see our impact, or support this work, visit We're Faith and Finance Live, and we talk about our telephone number often because we usually are live. But today the program is prerecorded, so if you hear a mention of the phone number, please don't call us.

But you can find us online at You know, as we think about our role as stewards of God's money, one of the big ideas that should be at the forefront of our mind is contentment. That's right, restraint, living within God's provision, and that applies not only to us as individuals, but to nations as well.

It reminds me of a story. One of my mentors, Ron Blue, the author and teacher, he was testifying before a Senate subcommittee on low-income Americans. And Senator Dodd asked Ron, Ron, what would you tell the average low-income American about handling money? And he said, well, I'd tell them to spend less than they earn and avoid the use of debt and have some liquidity or some margin in their financial lives.

And set long-term goals. And the Senator pulled out his pencil, started writing that down. He said, you know, Ron, it strikes me that this might apply to every American. And Ron said, you're right, Senator, including the United States government.

And it's true. You know, these principles apply to nations as well as individuals. In fact, often what we read in Scripture was addressing nations. And so we need to operate within God's provision. It doesn't mean we can't try to better our situation, earn more money, grow our gross domestic product, increase our income as individuals. But it does mean that we have to follow these biblical principles. And, you know, as it relates to us, our own economy, that means that we don't need to take our cues from the world.

We can't get caught in the comparison trap because that's a contentment killer. We need to not rely on debt, which allows us to live beyond God's provision. We need to exercise restraint, to have a spending plan and make sure at the core of our spending, our values are reflected. What's most important to us, where God is taking us, that our budget balances. Therefore, the expenses, including the portion that funds our goals, totals up to no more than 100 percent. We can't live on 110 percent of our income. It's just not sustainable. And that's true for our nation as well. Let's head to talk to Gail.

Looks like in North Dakota. Go right ahead. How are you? I'm doing great. Thanks for your call. Thank you.

Well, I had mentioned to him that answer the phone. My husband is retired military for about two years now, and he's 59 and a half. And he is able to do something with his TSP. And we are considering our only debt is our mortgage. And with the declining value of the dollar. We are considering paying off the mortgage, but we're not sure if that is the taxes that we would have to pay. Yes, well, it's certainly something to consider. Obviously, with him being over 59 and a half, there is no penalty for taking that distribution from the TSP. However, it would all be taxable.

So clearly, we need to consider that as you think about, you know, anything you would do there. Given that the market is down, I suspect your TSP is down just in terms of unrealized losses for the investments inside of it. Is that right? Yeah.

OK. Do you know roughly how much what percentage it's down, Gail? I don't. He is actually the one that manages that more closely than I do.

OK. Yeah, no problem. And is he fully retired now or did he just switch to other paid work? He is retired.

He is fully retired, but we opened a store in 2019 that I was at primarily and now we are both there running our store. I see. OK. And is that profitable at this point? Is it able to supplement your income?

No, it is not. OK. So what are you all living off of right now? Military retirement, VA payments, you know, that kind of thing. OK. And is that enough to cover your bills without you pulling out from the TSP? We do have substantial savings. OK. And so you're on a monthly basis. OK. And so what is the longer term plan to try to get this business to where it's able to supplement your income? Or are you thinking that you would start to draw an income from the TSP itself or what?

What are your plans there? That's what we're trying to figure out. OK. All right. We're looking at all angles right now.

And it would it would help immensely if we didn't have our mortgage payment. Yeah. Yeah.

Very good. Well, here's my thought. You know, I believe the market will recover. I mean, we go through these cycles and although they're painful and there's a lot of volatility and nobody likes to, you know, see their account go down, at the same time, there's two things that would be working against you if you took this huge lump sum out of the TSP to pay off the mortgage, which, by the way, what is the balance on that mortgage, roughly? About $150,000.

OK. So if you pulled $150,000 out, you'd add $150,000 in taxable income for the year of the distribution, which would push that portion up into a higher tax bracket. So you'd have the taxes that would be due on that, which you're gonna have to pay at some point.

But you probably wouldn't want to recognize all that in one tax year. And then you would have the fact that you're missing the recovery. And you might say, well, is it going to recover? And I would say, yes, eventually it will. Could it go down more from here?

Absolutely. It depends on, you know, how deep a recession is that, you know, either we're already in or will come later this year. But the market will recover ahead of the economy once we know that the Fed's done raising interest rates.

There's literally trillions of dollars on the sideline that will come rushing back into the stock market and we will see a recovery. So I think if it were me, at the very least, I would wait until you recover what you lost before you think about making any changes. And if you were going to accelerate the debt out of the TSP, I'd do that over multiple tax years, at least three perhaps. I think the better option would be let's just continue to pay on the mortgage. I realize that's your largest expense and it would be really helpful to get that out of the way because that would lower your lifestyle spending, which would take some pressure off. But at the same time, I don't want to, you know, create this huge tax liability in the process. Plus, I'd rather that TSP continue to grow because it sounds like, depending on what happens with this business, we may need to start drawing an income from the TSP to supplement the military retirement and so forth.

Now, you may have Social Security down the road, but at least at this point, I'd love for you to preserve that TSP and just continue to pay on the mortgage out of your current cash flow and try to perhaps accelerate that a bit. You know, the other thing is just be really honest with yourself about this small business. And if it's not going to start performing, then perhaps, you know, we need to let it go.

And obviously, I know nothing about it. It may be great down the road, but, you know, often we it takes a lot longer and more money to get a business, a small business like this to become profitable. And if it's a drag or a drain on your finances that are already tight, it can create some problems if we're not able to make some hard decisions along the way. So I guess all that to say, I like the idea absolutely of you becoming debt-free and getting this mortgage paid off. I just don't want to do it all at once out of the TSP. So I would either spread it out over at least three years and talk to your CPA about that or just continue to try to pay on it. Hopefully the business gets going. You can accelerate the pay down through current cash flow and let that TSP grow.

At the very least, I'd let that TSP recover before you do anything. Thanks for your call, Gail. I hope that helps. Hey, folks, we're going to pause now for a brief break, but we'll be back with much more on today's Faith and Finance Live. Moody Radio's Spring Share event is happening now, and we need your help. Will you partner with us this year as we look to be bold for the gospel in 2023? Last year, we were able to reach deep parts of Africa, and this year we want to continue to expand our reach around the world.

Whether you listen on air or online, Moody Radio needs your help. To learn more, see our impact, or support this work, visit This is our final segment of a Faith and Finance Live program that we previously recorded.

Thanks so much for being with us today, and we hope you'll stick around and enjoy the rest of the program. Have you ever thought about the fact that your worldview informs your choices? We talk a lot about that in every area of your life. That's certainly true in this area of finance.

Hi, I'm Rob West. This is Faith and Finance Live. You know, your behavior follows your beliefs, and so we need to be rooted in a biblical worldview as we look at the world through the lens of Scripture and then apply that to the financial decisions and choices we're making. Well, in this area of finance, what we find is that the why matters more than the how. We need to start with our values in terms of ordering our financial lives, building our spending plans, deciding how much to save and accumulate for the future. That needs to be a conversation with the Lord. That needs to be something that we make a matter of prayer, because money issues are hard issues. You know, when we talk about making course corrections in your financial life on this program, yes, we're talking about the symptomatic, everyday decisions of handling money, but at the core of every one of those decisions is really a value. You know, your belief system that's informing the why. But so often we take our cues from the world and we fail to look at what's most important to us as Christians and how can we allow that to inform how we use this tool called money, which is a means to an end, to accomplish God's purposes.

Think about that today as you think about how you're handling God's money. All right. Now let's head back to the phones to Kansas. Hey, Carol, thanks for calling. Go ahead. Hi, Rob.

I really enjoy your program and your advice is spot on. We currently own two homes. The first one is the home that we lived in for 30 years. It was our residence. And due to disability reasons, we had to buy the second home, which is a one level home. We are currently renting out the first home. And we are wondering if we decide to sell that, if we are going to have to pay capital gains on that. Yeah. Did you live there two out of the last five years, Carol? No.

OK. All right. So, yeah, that would be the test that gets applied to determine whether or not you have to pay capital gains or whether you get to enjoy the exemption, which for a married couple would be a half a million dollars in gains before you start paying capital gains on the sale. So if you can't meet that test, then it would be a long term capital gains. And the tax rate for most people, because it's based on your income, would be a long term capital gain rate of 15 percent.

This year, if your income is between, as a married couple, eighty nine, if it's less than eighty nine thousand at zero percent, if you're married filing jointly. But if it's eighty nine thousand to five hundred and fifty thousand, then it would be 15 percent. And that would be based on the profit.

So that's the selling price minus your basis, which is your purchase price plus any improvements. Does that helpful? Wow. So even though we lived there for 30 years, we're going to have to pay tax on that. Yeah. So your income is more than eighty nine thousand. Is that correct? It is.

OK. Yeah. And so then you'd have to determine your cost basis on that and then look at what improvements you put in it. Things that improve the value of the home that stayed with it. And then you're going to subtract that basis from the selling price and that gain. You'll pay a 15 percent capital gain tax on that. And the only way around that would be to do what's called the 1031 exchange, where you'd roll that profit, the proceeds of the sale into another similar property.

And then you could kind of kick that can down the road, if you will. But if you're going to pull it out and not reinvested in another piece of real estate, then the only other way to miss out on that capital gain would be if you want to do any giving charitable giving from the sale of this. I would donate a percentage of this property to a donor advised fund prior to the sale so that that portion would be excluded from any capital gains tax.

And then you could give that portion straight to the ministry or charity. OK. That doesn't seem fair, because if we just sold it in order to buy the new property, we wouldn't have had to pay the capital gains. Correct? That's correct. Yeah. As long as you could meet that test of having lived in it for two out of the last five years, then you're right.

You would be able to exclude a half a million dollars in gains from any capital gains tax. OK. Yeah. All right.

I'm sorry. I hate to be the bearer of bad news there, but the good news is whenever you have a profit, you know, you're only you're going to get to keep 85 percent of that. But do consider if you want to do any giving this option of a donor advised fund. My friends at the National Christian Foundation can help with that in CF giving dot com. Thanks for your call.

Carol to Texas. Hey, David, thanks for calling, sir. Go ahead. Yeah, I'm calling because I'm I'm trying to I'm wrestling with the thought of doing like hard money loans. And I know the Bible, you know, I know what the Bible says regarding lending with usury and stuff like that. What are your thoughts on that? Yeah. So you would be doing the lending at high interest rates?

Is that right? Yes, sir. Yeah, I have. I've done real estate investing and I've had to do it on my end. I've had to borrow money that way. I knew the risk and I was willing to take them. And I'm just wondering what your thoughts on that are.

Yeah, I'm not a big fan of it. I can just tell you I wouldn't do it myself just because I you know, I know the challenge that creates. I know that the folks who are getting into these, although you're giving them an option, perhaps they wouldn't have to borrow. Otherwise, we know it's not in their best interest to do it. It's just going to perpetuate a cycle that's going to result in them staying, I think, in a really difficult financial position. And in many cases, the data would tell us they're going to default on that and you're going to have to foreclose.

But even if they can perform, we're still, you know, at these high interest rates, I think placing a hardship on these folks. So I realize it's a normal course of business. People do it every day. I just would tell somebody who's asking me whether they should do it to stay far away.

And as a believer, I would have trouble making those types of loans myself. OK. All right. I appreciate your advice.

Absolutely. David, thanks for your call today, sir. God bless you. Hey, a quick email before we head back to the phones on our final moments of the broadcast today. By the way, if you have an email you'd like to send along to us to be read on the air, a question, send it to Ask Rob at That's Ask Rob at Isaac writes, My friend and I are both 62. She travels more than I do. We went to a free seminar.

Their red flag number one goes up. We went to a free seminar where they sold all kinds of prepaid transportation options for medical emergencies that aren't covered by most health insurance. She bought lifetime coverage.

How would I know if this is something I need to do? Well, Isaac, specialty insurance plans like this tend to be expensive and come with a lot of fine print that may exclude the circumstances you think will be covered. So in my view, and obviously I don't know the specifics of this particular policy that was being offered, you're better off putting that money in your emergency fund, especially if there's no guarantee that you'll ever use it. So take the same amount you would be paying as a premium and just start socking that away, maybe set up an automatic transfer to your savings account every month, specifically for this purpose. And that way you have the control over the money and it's there if you need it for that or for something else.

So perhaps consider that as you think about this. Isaac, thanks for writing to us. To North Carolina. Hey, Alan, thanks for calling, sir. Go ahead.

Yes, sir. The reason why I was calling, I was explaining to the gentleman, I'm 70 percent disabled from the military. And in addition to that, I'm basically living on a fixed income and I'm 73 years old.

Most of my life I've spent in ministry, so I don't have a whole lot of investments or anything of that nature for, you know, for retirement. Yeah. And my father died in 2004. And there is a trust set up and they're all four of my siblings. We all live in different states. And we're doing trying to get through the last part of this. And we have to have some help to figure out what to do. And I looked up to try to find a certified kingdom adviser in my my state in this area. And they said there wasn't anyone available. So I'm kind of left in the quagmire here to figure out what to do. Well, a couple of things.

I mean, yeah, I do think you need to get an adviser to step in here, Alan, and give you some wise counsel. The C.K. doesn't have to be necessarily in your area, especially these days. Many of them will work remotely with clients all across the country. And, you know, you can visit with individually with a C.K. or even, you know, the family meeting with folks in different states all connecting together using a Web conference. So I would take that approach to find one that's nearest you, perhaps. But you can extend that search out as far as you need to to find someone.

There's plenty of them in North Carolina. And get everybody together just to look at all the pieces and parts of this. You may need an estate attorney as well, depending on what the questions are related to the handling of the trust and your dad's estate, plus your own financial situation. So I would go back to what you were doing, but just extend that search out and see if you can find one that's a good fit for you. Maybe interview two or three and then just plan on connecting remotely.

And I think that will serve you just fine. Head to our website,, and click Find a C.K.A. And after you visit with that person, if you have further questions on any of it, feel free to give us a call back. God bless you, Alan. Thanks for being with us today.

Well, we're about out of time today. We gather for Faith and Finance Live because we recognize we all have a high calling. We're money managers for the King of Kings, which means we're to be found faithful as we manage God's resources.

Applying the wisdom of God's word to every area of our lives, and that includes our finances. So thanks for being here today. Thanks for calling and for writing and for your emails. We love to do what we do and serving you to be wise stewards of God's money. I want to say thanks to my team today, Clara, Deb, Amy and Jim.

Couldn't do it without them. Faith and Finance Live is a partnership between FaithFi and Moody Radio. We'll see you next time. God bless you. Bye bye. To learn more, impact or support this work, visit
Whisper: medium.en / 2023-03-13 20:35:46 / 2023-03-13 20:49:43 / 14

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