Feb 23, 2022
Economics applies to every industry at the individual, national, and global level. In this week’s episode, we have a distinguished guest who is on a mission to make economics useful at all levels. Dr. Laurence Kotlikoff is an economics professor at Boston University. He is also the author of Money Magic, a personal finance book written from an economist's standpoint. Today's podcast examines his book and financial outlook, which frequently counters conventional economic theories. Throughout the podcast, he shares his experience in handling personal financial decisions while also discussing some insightful observations about the state of our country.
[03:38] Introduction – Laurence introduces himself and discusses his current career emphasis.
[06:22] Personal Financial Decision Making - We must see individual financial decisions through the prism of consumption smoothing. Laurence explains what this is and why it is essential.
[12:42] IRA and Mortgage - Laurence outlines why under certain circumstances, it makes sense to withdraw funds from the IRA to pay off the mortgage.
[18:43] Investments – Laurence discusses investments, stocks, and the importance of making sound investment decisions. Furthermore, he evaluates the risk associated with each sort of investment.
[32:06] Social Security – Laurence discusses how individuals can navigate the complex social security web.
[34:10] Viability - Laurence discusses the Social Security system's viability and what individuals may do to prop it up.
[42:54] Massive Deficits - Whether it is the aggregate federal deficit, unfunded liabilities, or Social Security, taxing one's way out of some deficits is politically unappealing. Laurence discusses his approach to enormous deficits.
[48:28] Politics and Economics – Laurence discusses the causes of present crises, relating them to a lack of synergy between policts and economics.
[51:33] Campaign Trail – Laurence reflects on his 2016 presidential campaign experience, and shares what he would do differently in 2024 if he was running with an unlimited campaign budget.
Connect with Dr. Laurence:
Mentioned in the episode:
Money Magic: An Economist's Secrets to More Money, Less Risk,
and a Better Life: