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COVID Exhaustion, Rich Dad's Bad Advice, and Raising the Debt Ceiling

We're all tired of hearing about COVID. You are, I am, everyone is. I'm sorry to bring it up again but I'm going to anyway.

There's some interesting research on COVID exhaustion and the effect it has had on our collective mental health. (Check it out here.) What started out as two weeks to flatten the curve has become a monotony of emerging variants, each seemingly more dangerous than the last. While infections seem to have peaked in many areas, there isn't an end in sight.

So then, what will the future look like? Will we ever have a world without COVID? I don't think so. Instead, we're going to have to learn to live in a world in which COVID will probably pop up every year, similar to the flu. Many of us, even those who are vaccinated, will probably catch it at some point. The good news is that the current vaccines are working and if you're vaccinated, there's a very low risk of serious complications.

At some point, we're going to have to accept that a world without COVID isn't a possibility and return to our normal lives, with confidence that vaccination will protect us from the worst effects.

I occasionally enjoy picking on popular personal finance personalities, like Dave Ramsey. This week, it's Robert Kiyosaki's turn to be wrong. You might know him as the author of Rich Dad, Poor Dad. His basic advice is to buy appreciating assets and not liabilities, which is great advice for anyone. He also likes to give advice on the stock market, advice which is generally wrong. He's a Cassandra, always believing the market to be days away from a drop.

Like many other smart people, he believes that his knowledge in one area should extend into related areas...and that's just not the case. The fact is, it's incredibly hard to predict what the market will do at any point in time. Here are some of his prior predictions.

My point here isn't to slam Kiyosaki for his incorrect calls (although that is fun). My point is that long-term investors should ignore the noise. I say it all the time, but trying to time the market is a fools' errand. It can't be done. Instead, build a portfolio that you can stick with and go with that. Invest on a regular basis and take advantage of pullbacks in the market. Consistent, long-term investing is the path to building wealth, not timing the market or picking the best individual stock.

I rarely mix politics and business because there's rarely a benefit. Today I'm going to break my own rule.

The debt ceiling must be raised, and soon.

Politicians of both parties have used the debt ceiling as a cudgel by framing the debt ceiling in partisan terms. The fact is, the current debt ceiling isn't affected by proposed spending from either party. Instead, the debt ceiling only applies to expenditures which have already been incurred. It only applies to the spending that we've already done, i.e. the ridiculous amount that we've spent over the last twenty years in Afghanistan.

I believe in paying our debts; the only way we can do that is to raise the debt ceiling. We can talk about the costs and benefits of long-term deficit spending, and we should have that discussion, but now isn't the time.

Failing to raise the debt ceiling will cause a US default, which will have the follow on effect of raising our cost to borrow in the future. It will also most likely push us into a recession and none of us want that.

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