Money Rehab with Nicole Lapin - The Supreme Court vs. The Internet

Episode Date: February 22, 2023

Nicole unpacks the biggest headlines of the week (so far) that will affect your wallet. This week, she's covering a Supreme Court case that will decide the future of the internet, game-changing national debt predictions, suspicious Binance reports, and more. For those of us who dunked on the crypto bros (IYKYK): https://moneynewsnetwork.com/shop/

Money rehabbers, you get it. When you're trying to have it all, you end up doing a lot of juggling. You have to balance your work, your friends, and everything in between. So when it comes to your finances, the last thing you need is more juggling. That's where Bank of America steps in. With Bank of America, you can manage your banking, borrowing, and even investing all in one place. Their digital tools bring everything together under one roof, giving you a clear view of your finances whenever you need it. Plus, with Bank of America's wealth of expert guidance available at any time, you can feel confident that your

money is working as hard as you do. So why overcomplicate your money? Keep it simple with Bank of America, your one-stop shop for everything you need today and the goals you're working toward tomorrow. To get started, visit bofa.com slash newprosmedia. That's b-o-f-a dot com slash n-e-w pros p-r-o-s media. bfa.com slash newprosmedia. I'm Nicole Lappin, the only financial expert you don't need a dictionary to understand. It's time for some money rehab. There's a lot of news coming out of the government this week. So let's begin with the national debt. Now, we've talked about the debt ceiling a couple of times on past shows. But last week, the Congressional Budget Office released a new budget prediction.

This latest prediction puts the national debt over the next 10 years rising to $19 trillion. This is $3 trillion more than past predictions. There are a lot of factors at play here. The wars in Iraq and Afghanistan, our responsibility to the veterans of those wars, and emergency declarations signed after the financial recession of 08 and the pandemic of 2020 all play a role. But it's impossible to ignore the upcoming expense that is unbalancing the budget. This can seem like sort of a big problem that has nothing to do with little old you. But this adds extra fuel to the debt ceiling debate, will impact future tax policy, and should have you thinking

about your retirement as well as maybe your mom's. If you've been thinking about opening a Roth IRA or getting long-term care insurance, consider this the universe telling you to get a move on. Moving on to other government news, let's talk about how the internet works. And I don't just mean the internet as a series of tubes, how it works. I'm talking about one of the most foundational laws of the internet, Section 230. So Section 230 of the Communications Decency Act protects websites from legal repercussions for the content that individual users post on them. Section 230 has shaped the way the internet grew up because it went into effect in 1996. There have been slight changes to it since then. For example, in 2018, it became illegal for websites to knowingly allow people to use their sites for sex trafficking. But beyond that, websites haven't been liable for your nonsense no matter how out of pocket or straight up illegal.

All of that could change this week. There are two cases before the Supreme Court that challenge Section 230. Yesterday, the court heard arguments in Gonzalez v. Google, which argues that Google allowed content that radicalized terrorists and led to the Paris attacks. Today, they heard Twitter v. Tamne, which argues that Twitter shares content that radicalizes individuals and leads to terrorism. It will be about six weeks before we have a verdict in these cases, but if the claims against Google and Twitter are upheld, they could have massive implications for the way we conduct ourselves online, the type of content that gets shared, and the value of many tech companies who would suddenly be open to lawsuits and legal

claims that they have never had to face before. This isn't the only place, though, that the government and the internet have been getting into it. Ever since the fall of FTX, the SEC has been scrambling to play enforcement catch up. And if you're living for this moment, you are not alone. I too very much enjoy saying, told you so crypto bro. I liked it so much that I had a hoodie made out of it. And if you want one too, head over to the new Money News Network website, moneynewsnetwork.com, and snag one for yourself. Anyway, the SEC has been ramping up action for months now, and this past month has been

particularly busy. They've settled with crypto exchange Kraken for $30 million. Kraken was offering staking services, which is when users lend their crypto assets to be used as part of the blockchain record or proof of stake. This staking can earn investors a high rate of return, but the program wasn't registered with the SEC and was operating without any sort of government oversight. In further legal action, Paxos, a stablecoin issuer, was ordered last week to stop issuing Binance USD, or BUSD, by the State of New York Financial Services Department due to issues with its relationship with Binance. For bonus points, the SEC is planning to sue Paxos over BUSD being an unregistered security. But those aren't the only troubles around Binance as of late. It was also discovered

last week that Binance has moved $400 million from Binance US to a trading firm called Merit Peak LTD, owned by CZ, the CEO of Binance. Binance claims any parallels between this and FTX and Alameda research are overblown. But it sure seems sus. Just saying. You might have another reason to wear that told-you-so crypto bro hoodie sooner than you think. This week, I'm looking forward to the release of the PCE numbers. They come out on Friday. Now, on the show, we talk a lot about CPI.

And CPI is a measurement of inflation based on consumer goods. PCE is a similar number, but it weighs things differently. It stands for personal consumption expenditure. For example, housing costs make up 42% of how CPI is calculated. But housing is only 32% of how PCE numbers are calculated. Because different purchases and costs are weighted differently, the two numbers are different. One isn't necessarily better, and the Fed pays attention to both. So beyond waiting to see what the next wrinkle in the Binance story is, I'll be looking out for those PCE numbers.

For today's tip, you can take straight to the bank. Crypto is generally taxed like stocks. One of the exceptions is actually staking, which we talked about earlier in the episode. That's treated like income. But otherwise, you're looking at paying capital gains taxes on your crypto profits. You can also write off crypto losses as a tax deduction. You can write off up to $3,000 per year in losses and your total loss will roll over. But these of course are realized losses, so you have to have sold your coins to write them off. That also means that if your crypto exchange went bankrupt last year, you can't write off losses just yet. You actually have to wait until the bankruptcy

is finalized before you know exactly where you stumped. Money Rehab is a production of Money News Network. I'm your host, Nicole Lappin. Money Rehab's executive producer is Morgan Lavoie. Our researcher is Emily Holmes. Do you need some money rehab? And let's be honest, we all do. So email us your money questions, moneyrehab at moneynewsnetwork.com to potentially have your questions answered on the show or even have a one-on-one intervention with me. And follow us on Instagram at moneynews and TikTok at moneynewsnetwork for exclusive video content. And lastly, thank you. No, seriously, thank you. Thank you for listening and for investing in yourself,

which is the most important investment you can make.