American Voters May Be Catching On
Last November’s election may not have made huge waves, but it’s clear that in many ways voters are not happy with Congress and their elected leaders for a perceived lack of progress.
A large number of bills that originated in the House have been stalled in the Senate for some time now. Starting in January, it’s possible that these bills will be brought back for another try at passage. Pay close attention to the ones that contain proposals to trim spending and to alter or repeal the president’s healthcare legislation from a few years ago.
It’s still not clear whether these legislative efforts will be productive.
Setting aside all partisan considerations, there is a growing lack of approval for unchecked government spending. It may be that an increasing number of voters are seeing through the financial smoke and mirrors that have been giving a false impression that the economy is growing.
There is cause for cautious optimism that the country may be moving in a more positive direction now that voters appear to see the writing on the wall.
Unfortunately, the national debt still stands at unprecedented levels. This stubborn reality must be faced.
To understand how the national debt continues to spiral out of control, just consider the following factor.
For more than two years now, every dime of the nearly $2.5 trillion of annual revenue collected by the IRS has been spent before they even collect it. This means that our government has to borrow an additional $1 trillion it takes to run its yearly budget. That means taking on additional debt that will have to be paid back with interest.
By the end of Obama’s second term, our national debt will top $20 trillion. If you were to divide that sum up evenly between America’s 100 million taxpayers, each of us taxpayers would owe a personal debt of $200,000.
Higher taxes are in our future.
Meanwhile, the continued printing of billions of dollars is allowing inflation to diminish the purchasing power of every dollar that is in circulation. This means that it will take more dollars in just a few years to purchase the same amount of gas, groceries, clothing, and prescriptions you’re buying today.
This doesn’t mean certain doom but it does require a willingness to face reality.
Right now is the optimal time to position ourselves to not only ride out but also to thrive during any future economic uncertainty.
How Will Your Retirement Fare?
It’s clear that our government isn’t going to be able to turn this mess around overnight. This means that we all have some choices to make.
For instance, if a majority of your wealth in real estate, you probably already understand how your hard earned equity can vanish when the real estate markets plummet. Likewise, if you’re still saving for your retirement in a 401(k) or an IRA, your nest egg is in more danger than you think.
The three dangers you must be prepared to counter are higher taxes, inflation, and continuing market volatility.
Remember, our politicians are going to have to somehow cover this huge looming debt and accompanying deficit. They’ve shown no sign of curbing their desire to spend.
That means they’ll need to hike taxes to continue their spending habits.
Even if you believe you’ll remain unaffected because you’re going to be in a lower tax bracket, you could be in for a rude awakening.
In the meantime, inflation is still eroding the purchasing power of every dollar, cutting it in half roughly every seven years.
If you believe that the period of economic unrest from 2000 to 2012 was an aberration and that we won’t face another market correction or crash, you may be engaged in wishful thinking.
On the other hand, if you do have concerns about rising taxes, inflation, and continuing market volatility, you’ll want to make it a serious priority to learn how to protect yourself from these risks.
With the right knowledge and using the proper strategies, you will not only survive but actually thrive during uncertain times.
The important thing is to take action and to not wait until its too late.
Doug Andrew is a teacher, counselor and financial guru that Ted and I have known since 2005. He is anincredibly wise person and family man and we respect his insights and thoughts. Lynette Robbins, Founder of The Knowles Systems