No. of Recommendations: 7
The reality is the divest thread is really just political, and political isn't a reasonable investment strategy.
I know a few Canadians abroad, all of them left Canada for Cayman, Monaco, various other places to escape their local tax regime. Skipping your taxes to enrich yourself seems good for YOU ... but not a strong vote of confidence for the country's political system.
Trump: he was elected in 2016, reelected in 2024. Why do people keep insisting he isn't going to leave when his term runs out? He left last time. The same people on the Republican right were convinced Obama wouldn't leave, Biden wouldn't leave etc. It's just political nonsense.
More to the point: the problem with democracy - as we're seeing - is the citizenry and their elected officials have learned that it's easy to promise and give and increase, but it's very very hard to limit and reduce and restrict. People don't usually vote for pain and the officials who bring it generally find themselves either infuriated and quitting or summarily booted from office. Let's count our blessings for a moment that we have some people in and around elected office who are willing to CUT something / anything and REDUCE something / anything in the face of tremendous social / political pressure. Yes, it may be sufficiently overridden, and we can revisit, but it takes some brave souls to give us the hard medicine we may in fact need (just look at how Elon Musk has been painted some evil demon here to destroy the world when the man's done more for humanity and frankly leftwing political causes than any other person in the last 20-30 years).
Here's the math of the problem, public debt to gdp:
https://fred.stlouisfed.org/series/GFDEGDQ188SThe solution to this problem is simple: freeze current spending for a decade and force every government agency to produce a plan to adapt to the new budget reality. Enforce a mathematical REQUIREMENT on the budget process that cannot be overridden for any reason whatsoever. The Swiss have some nice ideas on this.
Most of the spending the current administration is focused on ending / cutting has been funds / funding abroad. Would we prefer to cut funds at home first? Just because you hate the man and the party DOES NOT MEAN everything they do is wrong or evil or incorrect.
Back to investing. If the US does not address the debt problem materially in 20 years, we will suffer massive economic consequences -- as will Canada, Europe, and the entire planet. The American left wrapped in the Democratic party (which isn't left at all, let's be honest) has no ideas and no solutions. They pretend we don't have a problem. The American right wrapped in the Republican party (which also isn't right at all) pays lip service to the issue then spends like drunken sailors. Trump is not really loved by the Rs, but he's also not very good at running sound financial enterprises. The country needs to move to a true middle - a truly fiscally conservative, socially more tolerant and liberal middle -- if we want to survive.
