Readers sometimes complain when we write about politics here. But that makes no sense when you think about it.

Our goal is not to sway your vote. (The editors here cover the political spectrum.) Our objective is to explain how various policy proposals will affect the markets – and your financial security.

The stock and bond markets reflect what is happening – or is likely to happen – in the economy. And what comes out of Washington – new laws, taxes, mandates, prohibitions, regulations and executive orders – has an outsized effect on that economy.

[ad#Google Adsense 336×280-IA]And not always in a good way.

As Mark Twain famously said, “No man’s life, liberty or property is safe while the legislature is in session.”

When I look at the U.S. today, I see countless positive developments occurring in the private sector: faster communications, safer transportation, more powerful computers and smartphones, new drugs that cure lethal diseases, life-extending medical devices, and technological innovations that make virtually every industry more efficient and productive.

Every day, companies around the world are knocking themselves out to bring you products and services that are better, cheaper or longer-lasting.

At the same time, however, the federal government – while providing essential services like national security and the enforcement of contracts – is creating a tidal wave of red ink that threatens to drown us all.

This is hardly a news flash, I know.

However, it is not just the federal debt, which is prodigious at more than $19.2 trillion. It’s the additional unfunded liabilities for Social Security, Medicare and Medicaid, which total $101.9 trillion – and are growing by approximately $9 trillion a year.

These numbers are so large they are meaningless to most Americans. You might as well say the federal government’s projected shortfall in coming years is “approximately $999 bazillion.”

The national debt is an abstraction to voters. They are more concerned about tangible things, like their mortgage, their credit card debt, their student loans, their health insurance and their retirement security.

Politicians recognize this. But in recent years, an ominous trend has developed. Candidates on both sides of the aisle are exploiting people’s economic anxieties for political gain.

The master of this is Bernie Sanders.

At this stage in the primary process, the senator from Vermont has no realistic chance of winning the Democratic nomination. Even if the self-described Democratic Socialist did, he would be trounced in the national election. And if, by some miracle, he also won that, no sane Congress would ever enact his policy prescriptions.

It would be an economic disaster… and political suicide.

Even the left-leaning Washington Post describes Sanders’ pie-in-the-sky promises of free healthcare, free college education, bigger Social Security benefits and an even larger welfare state as “an assault on reality.”

Since his 15 minutes of fame is now drawing to a close, many feel Sanders is harmless.

But look at the folks who make up his crowds. They are mostly under age 35. Young people – who are too young to know what socialism is or too dumb to know what it does – are overwhelming for him.

Sanders is stoking envy, resentment and class warfare, demonizing the economically successful, and beating the tom-toms for more confiscatory tax rates and greater redistribution.

This appears to be the future of his party. And it’s more than a little scary.

Thanks to decades of unrealistic promises and irresponsible spending – much of it under the current and previous administrations – we are sailing toward the most predictable crisis in American history.

(And, apparently, Sanders wants to hasten its arrival.)

Yet even with the chaos and dysfunction in Washington, you can still build and protect your financial future. And in my next two columns, I’ll explain exactly how.

Good investing,

Alex

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Source: Investment U