The Hidden Tax

The Tax You Shouldn't Ignore

The U.S. Debt-to-GDP ratio is now over 122%—a level we haven’t seen since COVID...and the end of World War II. Both driven by massive government stimulus which was meant as a temporary solution. Now the Debt-to-GDP issue has become structural.

Why does it matter?

Because the government owes more than the entire economy produces in an entire year—and it’s not slowing down.

With rising interest costs, aging demographics, and structural deficits, the question isn’t if we’ll pay the bill…it’s how.

Spoiler:
They’re not going to slash spending. And they won't raise taxes. In fact, the most recent bill passed cut taxes across the board while increasing both the debt & deficit, according to the CBO (Congressional Budget Office).

So what are we left with? Inflation.

The Hidden Tax
It doesn’t show up on a statement, but it quietly erodes your purchasing power. As more money is printed to fund the gap, the dollars in your account steadily lose value.

We’re told:

• “Inflation is coming down.”

• "It's corporate greed."

• “It’s transitory.”

But here’s the truth:

Inflation doesn’t reverse. Once prices increase, they rarely experience fall. Sure, the rate of inflation may slow—but the higher prices remain. That's the silent danger, the damage done to your wallet sticks.

And with inflation doing the work, the government can effectively reduce its debt burden by devaluing your savings—without raising taxes or asking permission.

Why Investing Isn't Optional Anymore
Cash in a traditional savings account isn’t “safe”—it’s shrinking by the day.

At Iron Valley Investments, we focus on:

• Positioning assets to outpace or keep up with inflation

• Build resilient portfolios to preserve long-term purchasing power

• Diversify beyond the dollar to reduce inflationary pressures

The cost of doing nothing is rising.

If you want to retire comfortably, this is something you need to be running the numbers on.

This newsletter is for informational and educational purposes only and does not constitute investment advice or a recommendation to buy or sell any securities. All investments involve risk, including the possible loss of principal. Past performance is not indicative of future results. Iron Valley Investments is a registered investment adviser in the State of Pennsylvania. Registration does not imply a certain level of skill or training. A copy of Iron Valley Investments current written disclosure statement discussing Iron Valley Investments business operations, services, and fees is available at the SEC’s investment adviser public information website – www.adviserinfo.sec.gov or from Iron Valley Investments upon written request.