By Edward Leone Jr. CFP RFC MBA DMD
Contact Information: 303-478-6793 edleonedds@gmail.com
The political rhetoric as we approach the election season is getting very deep. We are hearing a lot of what, but not very much how! Issues regarding economic growth, national security, budgeting and employment opportunities are among the many issues that need to be addressed. It will be a challenge for the White House and the Congress to take steps necessary to solve these and so many other issues we are facing as U S citizens.
Social Security is an issue that will be pressing over the next few years. The program is not sustainable in its present form. The Federal Government has been borrowing from the fund since there is so much money there. It seems such a waste to just let it sit there earning interest. The fund is now stacked with Government IOUs which we as tax payers are obligated to pay off! Program adjustments are unavoidable. A Yale professor recommends raising the full retirement age to 76. What else will come our way? What about the weak situation with Obama Care regarding higher premiums for insurance and the exit of many major insurers from the program. Just another situation to solve!!
Other government entities are also facing man challenges. The Illinois teacher pension program is lowering the assumed rate of return on investments in order to mitigate some of the legacy costs it can not afford to pay. The Japanese Government, in order to stimulate its equity markets, will own the majority of shares of 55 major companies by next year, accomplishing this with more borrowed money. Their national debt is at 280% of GDP currently. Are we here in the U S headed in the same direction? The trends toward deflation as being experienced by foreign central banks has caused government bonds in many foreign countries to be issued at negative interest rates. Foreign banks are offering negative interest rates on deposits. It costs the investors and depositors money to deal in these mediums. Where is this going to go? We are also not hearing much about the problems Hong Kong is having with the Chinese National Government. It appears that this former British Colony is in the process of revolt over government restrictions. Is this the next are of military conflict?
As you can see there are many issues which will cause our population to be concerned and nervous about future out comes. We need to come together as a society and implement steps to address our citizens needs and mitigation of global concerns. Those who are in retirement or getting close are much concerned about their economic well-being. This portion of the population needs to be aware of the following:
Down equity markets
Healthcare costs
Inflation
Tax structures
The ability to continue working if necessary
My comments contained in this blog have been quite negative. Looking back on the history of this country and the ability of its citizens to come together and solve problems on what have been perhaps more serious past challenges makes me feel that we will find a way to progress in a direction which will sustain what we know as the great United States.
For The Record:
DJIA 18,479.91
NASDAQ 5,259.48
S&P 500 2,181.30
Suggested Reading: “Extraordinary Wealth” By Ric Edelman
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