Be Careful What You Wish For
Have you heard the expression “Be careful what you wish for”? Well, this year this question might very well apply to the winner of the presidential election. It might be one of those situations where the winner won’t be able to do enough of anything to satisfy anyone! The experts are saying that the winner will have to deal with the following issues as soon as he takes office:
The Fiscal Cliff. Under the law currently in effect, in 2013 we will see the expiration of the Bush-era tax cuts as well as spending cuts that the government has already agreed to. The impact of these coming changes on a very fragile economy might move us back into a recession.
Jobs. With the high unemployment rate, as well as all the people that are under-employed, 15% of the workforce is estimated to be looking for a change. While new jobs are being created, the experts agree that we need a lot more jobs to get back to where we once were.
Retirement. The problems with Social Security and Medicare are huge. But, there’s another problem just as big: 80 million baby boomers are starting to retire, and very few of them are financially prepared for retirement. Sixty percent of all workers are said to have less than $25,000 in savings. Baby boomers have done better saving, but it is still not enough. Can retirees live off of their savings and Social Security (average check of $1,200)?
Debt. Even as Americans have been paying down debt, and businesses are sitting on large cash balances, it’s still not a good situation. Personal debt is lower than during the peak, but higher than 2006. Businesses have total debt of over $8 trillion. The US Government owes another $39 trillion. How are we going to pay this back?
China. The effect of that country on the rest of the world cannot be under-estimated. For the last 150 years, the United States has had the biggest economy in the world. But experts are saying that China will overtake the US in about five years. This poses tremendous economic and political challenges to the US, as well as its ability for world influence.
So, who wants the job now?
Marcelo Sroka – Is a Tax Partner of Wertz & Company, LLP, a Professional Services Firm located in Orange County, CA that specializes in working with entrepreneurs along their journey to success.