I had a very interesting conversation with a reader this week. ‘Hank’ is an American citizen living in Ecuador and running a local business exporting raw materials around the world.

Hank was very familiar with asset protection and international taxation issues and had previously worked at a law firm assisting international clients with these issues.

The two of us had very similar ideas about politics, economics and ways to reduce the risks is your financial life. We chatted on the phone for quite awhile about these and other issues.

Politics – We’re screwed. Politicians are all liars. Democrats and Republicans are all alike. President Bush presided over this country during the largest increase in government spending in history (at the time).

He waged war in countries that never asked for us in order to enrich his political cronies at the oil companies and defense contractors. He effectively colonized the Middle East.

In the name of national security he robbed us of privacy and personal freedoms through the Patriot Act. We now are subject to phone taps, email interception, bank and property seizures, and vigorous, yet gentle groping while passing through security at airports all over the country.

King Bush also grew entitlement programs at a break neck pace further indebting us and our heirs to a generation that we have no responsibility for, nor can we afford.

But luckily, Komrade Obama came on the scene. He has taken the Bush playbook and doubled down on nearly every move. Under his leadership, he has put the US in debt unlike anything ever before seen in the history of mankind.

The US debt per taxpayer has now reached about $129,000. We are running ANNUAL deficits exceeding $1 trillion. Keep in mind, this is annual. It accrues each year. Imagine running up a $20,000 credit card balance this year. And next year you accrue another $20,000 balance that you use to pay off your interest from the previous years. Welcome to US political economics.

Economics – We’re screwed. Mainly because we now have no separation of Politics and Economics.

At what point in history did our political leaders become responsible for the economic well being of the country and its citizens? The current environment reminds me more and more each day of the book, Atlas Shrugged, by Ayn Rand (my all time favorite novel). Much like the boiling frog analogy, we cannot really pinpoint the time when the water became too hot for comfort.

We do know that it sure was nice when the government stepped in and bought mortgages, treasury bonds, and bailed out companies to make us all feel nice and cozy. It gave us that secure feeling that big brother really was watching out for our best interests (just a hint of sarcasm here).

The reality is individualism and personal responsibility has somehow left the mainstream thought process of the American public. Our society has come to expect that Social Security and Medicare will take care of us when we are old and Medicaid and welfare programs will take care of us when we are poor.

We have been sold a bill of goods that we really do need hundreds of military bases all over the world to protect us from the evils that lurk in the shadows.

What we don’t realize is that this all comes at a price. The piper must be paid, and he is here to collect.

As Hank mentioned when we were on the phone, he has found the only way for him to ensure his safety, privacy and personal freedoms was to leave the US.

Hank, and many others like him, has found living in other countries to be much less intrusive on their personal lives. Ultimately, it all boils down to economics.

When the citizens of a country have to pay for excessive government intrusion, it will increase your cost of living and reduce the free time you have to spend doing the things you truly love.

Taxes in any form are always passed down to the end user. Many people are now complaining about how corporations are ‘getting away with murder’ by shifting profits to low tax jurisdictions.

Keep in mind the alternative is they keep their profits here, pay the highest corporate tax rate in the world, and pass the cost increase on to you dear consumer. Do you really think the corporate benefactors at HP, Dell, Intel, Proctor and Gamble and others are willing to bear the burden of the increased cost? Not likely. Welcome to higher prices thanks to massive government growth.

Of course there is always the hidden tax, inflation. Since the Obamessiah took office, the money supply in the US has more than doubled. It has far outpaced economic productivity.

Have you bought a gallon of milk lately? A gallon of gasoline? Loaf of bread? Movie ticket? Furniture? Are any of these items less expensive today than they were 3 years ago?

The government is left with few choices but to either massively cut spending, increase taxes, or print money and inflate away the debt. We all know #1 is not an option.

Tax increases and printing money are the easy choices for policymakers.

Money printing is the hidden tax that raises the prices for nearly everything you buy. Thank you government incompetence.

In just a couple of week the federal government faces a major hurdle. On August 2nd we will have reached the federal debt limit, which means we won’t be able to pay our bills in August.

Currently the debt ceiling is at $14.29 trillion. The last time it was raised was just last year. Most likely it will be raised again, all at your expense.

Right now the Republicans and Democrats are playing a cat and mouse game trying to negotiate for higher taxes, lower taxes, spending cuts, new programs, and who gets the last serving of garlic mashed potatoes at the dinner table.

In other words, we have no idea what they are really doing in Washington, but ultimately their only goal is to win votes to make sure they get re-elected. Heaven forbid they lose their job and have to actually work for a living.

This is what happens though when you put the purse of the minority into the hands of the majority. Politicians have to pander to the majority to keep their jobs. Unfortunately it’s the productive minority who has to foot the bill.

Or you can be like Hank and I. Hank left the US permanently several years ago. I left a few years ago and have been back for several months now. In just a few short weeks, I will be leaving permanently.

This may seem like an extreme move to many of you. Some of you have already taken the plunge. I have talked with many of you who have left and never heard an inkling of regret.

I have also talked with many of you that would love to make the jump, but just aren’t sure where to go, how to educate your kids, or how to earn a living abroad.

I can tell you from personal experience, the hardest thing about making the move – is making the decision to make the move. Once the decision has been made, you will figure out the rest. By solidifying in your mind that you want to make the leap, you will be open to finding the solutions to each and every challenge that will present itself. But the process will certainly be rewarding.

We are currently working with a couple of law firms in the Baltics who are offering services helping clients establish residency in Estonia and Latvia. We will be offering a special report sometime in the next couple of weeks that will explain the details of the programs available and exactly what you need to do and who you need to talk to.

Estonia and Latvia are both EU countries so by obtaining residency in one of these countries, you would also have EU residency. Both of these countries have developed unique programs that make it very easy to receive a 5 year residency permit.

They are actively seeking educated, productive people who can bring money and jobs to the area. They are providing incentives for people like you and offering the reward of EU residency.

If this appeals to you drop me a line here and I will keep you on the early notification list.

I would love to hear from those of you that have taken the plunge to live an expat life. Please share your stories, both good and bad and I will reprint them in an upcoming newsletter.