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Interest On The National Debt

Apr. 12, 2019 9:05 AM ET20 Comments
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SA For FAs


  • iMFdirect: Countries must get their fiscal houses in order by gradually lowering debt to prepare for the next downturn.
  • Russell Investments: The “$20 billion club,” the largest publicly listed corporate defined benefit plans, are markedly de-risking their portfolios.
  • Thought For The Day: One ideal that is universally embraced but seldom mentioned in discussions of fiscal policy is the value of freedom.

DB Plan De-Risking

"After several years of little news on the investment policy front, there have been big changes in asset allocations for [DB plans with liabilities of at least] $20 billion... Fixed-income allocations are up 5%, while equity allocations are down 5%. This shift in asset allocation is the largest de-risking move in recent history in a continuing shift out of risky assets." (Russell Investments)

Trade Biggest Loser In Trade War

"China's total trade with the U.S slumped by 11% in the first three months of this year, according to the latest customs department data. That's mainly due to a 28% slump in U.S. imports to China for the first quarter, in yuan-denominated terms. Exports to the U.S. fell 3.7% over the same three months." (Wall Street Breakfast)

Dr. IMF's Fiscal Prescription

"Everyone's opportunities for a good education, along with their job prospects, healthcare, and retirement income, depend on the tax and spending choices governments make as they respond to these challenges. What should policymakers do?... we argue that they can take a long-term view to foster higher and more inclusive growth. This means getting their fiscal houses in order by gradually lowering debt to prepare for the next downturn and upgrading fiscal policy to invest in people's futures. This requires… creating more room in the budget…" (iMFdirect)

Thought For The Day

The International Monetary Fund has offered some generally good, and broadly ignored, advice and encouragement to member countries since the financial crisis a decade ago. Today's installment, published on SA by iMFdirect and quoted immediately above, is the fiscal parallel to a monetary concept which has gained acceptance. Central bankers, at least in the U.S., have attempted to normalize interest rates in an upward direction to give themselves wiggle room to lower them again in an economic downturn.

This article was written by

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GIL WEINREICH - Author of "The Mentor," a unique parable for financial advisors and those who aspire to become one. I have worked in the FA arena since 1997, and during that time, the New York State Society of CPAs twice awarded its prestigious Excellence in Financial Journalism award to me for a monthly column I wrote on business ethics. Previously, I reported on international news for Voice of America (where I was awarded a newsroom writing award) and prior to that worked as an editorial assistant at U.S. News and World Report. I live with my wife and children amidst the verdant and vibrant hills and dales of Jerusalem.

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