Weekly Update from RLA Tax and Wealth Advisory

By:  Dennis Tubbergen

Do Experts Ever Agree?

         I have the privilege of interviewing some very bright economists, authors, and commentators on my radio and YouTube program.  Each of my guests is selected carefully.  They are all well-respected thought leaders with helpful perspectives and forecasts on the economy and investing markets.

         While all of these guests are experts, they sometimes disagree on economic and investing forecasts.  Or so it would seem.

         To the best of my recollection, every guest that I’ve interviewed over the years is of the opinion that there is too much debt to be paid, both in the private sector and on the balance sheet of the federal government.

         For this week, let’s focus only on federal government debt and spending. 

         The official government debt is now approaching $40 trillion.  That number by itself is scary enough, but the real number is much larger.  The total ‘fiscal gap’ of the US Government is more than $200 trillion, according to multiple sources.  The fiscal gap includes the national debt as well as the underfunded liabilities of Medicare, Social Security, and other government programs.

         This is a number that can simply not be paid without draconian spending cuts to every (or nearly every) government program.  And, the longer deficit spending continues, the more severe the ultimate cuts will have to be.

         Presently, when examining federal government expenditures, the largest outlay is for Social Security benefits at $1.581 trillion per year.  (Source:  https://internationalman.com/articles/the-debt-spiral-that-ends-in-dollar-destruction-6-hard-truths-america-can-no-longer-ignore/). The second largest federal government outlay is for interest on the debt at $1.227 trillion.  Within months, interest expense will become the largest federal government expense.

         Defense spending is currently $979 billion, but President Trump has proposed increasing this annual outlay to $1.5 trillion, which will further exacerbate the deficit problem.

         Side note:  for those who are still thinking we can just ‘make the rich pay their fair share’ to solve this problem, in other words, just raise taxes on the wealthy, think again, and do the relatively simple math. 

         According to “Forbes”, there are 902 billionaires in the United States with a combined net worth of about $6.8 trillion.  The US Government spent about $7 trillion in 2025.  If 100% of the wealth of all billionaires were confiscated via a wealth tax, the US Government would come up about $200 billion short to fund just one year of spending.

         There is another inconvenient truth to consider.  The US Government will need to refinance $10 trillion in debt this year, in addition to financing additional deficit spending of about $2 trillion.  As I’ve discussed previously in this newsletter, the US is still selling its debt, but only for ever shorter time frames.  There are simply no lenders willing to loan the US Government money for a longer-term time frame.

         The debt is unpayable.  The experts agree.

         Where the disagreement occurs, from my experience, is what the policy response will be.  There are only two options.

         One, the Fed creates currency to continue to finance the debt and deficit spending.  History tells us that this can continue until there is a ‘confidence tipping point’ as far as the currency is concerned.  At that tipping point, there is a panic mass exodus from the currency.

         Two, the Fed will not be an accomplice to reckless spending and monetize debt.  If this is the outcome, there will be a painful deflationary environment not unlike the 1930’s.

         The experts whom I interviewed seem to differ in their opinions when it comes to policy response.  There isn’t much disagreement on the problem.

         If you’ve not yet prepared for both outcomes in your personal financial situation, consider this a ‘nudge’ to do so.

Apartment Rents Down; Vacancies Up

         Year-over-year median apartment rents are down.  From March 2025 to March 2026, median apartment rent fell 1.7%.  (Source:  https://www.theepochtimes.com/business/us-apartment-rents-post-largest-annual-decline-since-2017-in-march-report-6006845)

         That’s the largest year-over-year decline since rent recordkeeping began in 2017.

         The national median rent peaked at $1,442 in August 2022 but rents have trended lower since that time.  In March 2026, the national median rent was $1,363. 

         As one might expect, one of the primary reasons for the decline in rents is the buildup of apartment inventory.  608,000 new apartment units hit the market in calendar year 2024, which was a 38-year high.

         This increased inventory has created a 7.3% apartment vacancy rate nationally.

         There’s another side to this story.

         Most apartment dwellers are young adults, age 18-34.  There are an increasing number of young adults living with their parents.  Nationally, about 33% of young adults live with their parents.

         While that 33% number is slightly below the pandemic peak, it is still far above historical averages and is reflective of higher living costs across the board.

 RLA Radio

The RLA radio program this week features an interview that I conducted with Mr. Karl Deninger.

Karl is a prolific commentator at market-ticker.org. I got Karl’s forecast for inflation moving ahead and also picked his brain as to where he thinks Federal Reserve policy might go and how you might be affected.

You can listen now by clicking on the "Podcast" tab at the top of this page, or you'll find it posted to your favorite podcast channel.

Quote

“Winning is not a sometime thing…it’s an all the time thing.  You don’t win once in a while…you don’t do the right thing once in a while…you do them right all the time.  Winning is a habit.”

                                                   -Vince Lombardi