By Mark Anderson, Legal and Legislative Assistant, NMBA There’s a phrase sometimes used in political discussions that essentially stands in as a shorthand for Occam’s Razor, the principle that can be boiled down to the notion that the simplest explanation is often the correct one. The phrase I’m referring to is “It’s the economy.” In evaluating the mood or temperature of the American public, both media and political elites tend to search for overly complicated, vague and ephemeral reasons for why people hold certain opinions when the simplest explanation is often the correct one. Economic fears and anxiety drive a lot of people’s beliefs, whether those beliefs are correct or incorrect. And, as the world has become far more complex and difficult to navigate economically, so increases the amount of anger, irrationality, paranoia and fear coursing through the veins of the average person. The phrase, “It’s the economy,” acts as a shorthand to remind people that many problems are eventual fallout from economic precarity and volatility, and are often not as complex as we want to make them. The notion that the world and the economy are becoming increasingly difficult to navigate certainly isn’t new, but it’s becoming more frighteningly accurate over time. A recent article from The New York Times details the financial struggles of senior citizens in America, with much of the article being framed around Social Security taxation, which is something of a surprise to many seniors. The thrust of the article revolves around the increasing complexity of managing one’s finances and navigating the proverbial sharks in the financial waters, just while trying to keep one’s head above water. The article highlights 72-year-old Jennie Phipps, a single woman who was caught off guard by the taxation of Social Security. “It’s not that I didn’t know about the tax, but, in my head, I didn’t calculate it,” she said. “I’m always surprised at the end of the year by how much I owe.” Luis Rosa, a certified financial planner in Los Angeles, says in that same Times article that it’s becoming increasingly difficult to navigate the economy without a financial adviser. “A lot of people who don’t work with a financial adviser are very surprised to find out that Social Security benefits can be taxable,” he said. “Then they have to take more money out of their IRAs to compensate for the difference, and it becomes a 13
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