Few would argue that economy is unstable. Is the sky is falling? Not last time we checked, but there has never been a time like the present to take inventory, prepare and ensure you have a sound financial strategy for the road ahead.
1 “Federal Budget (2011 and 2012) – Obama and Ryan Budget Plans. NY Times. August 24, 2011. http://topics.nytimes.com/top/reference/timestopics/subjects/f/federal_budget_us/index.html
If you’ve never visited it, CLICK HERE to check out www.us.debtclock.org. This website features a “clock” showing our government’s current budget – roughly $3.6 trillion. In just a decade’s time, that would equate to $36 trillion, assuming, of course, that we don’t increase spending. (With Social Security, Medicare and Medicaid for Baby Boomers all looming in the wings, the likelihood of our country NOT increasing spending seems slim to none.)
You’ll notice the Debt Clock also indicates Federal Tax Revenue of roughly $2.2 trillion per year – $22 trillion over the next decade if nothing were to change. Let’s assume, for the sake of illustration, no major changes, as Congress has repeatedly voiced their desire not to raise taxes, our economy continues to struggle, and unemployment remains an issue for millions of Americans.
Let’s stop and consider the math. Over the next decade, $36 trillion in ballpark spending with $22 trillion in projected revenue would leave a shortfall of roughly $14 trillion. Even with this month’s proposed $4 trillion budget cuts over the next 10 years1, we’re looking at the very real possibility of adding another $10 to $15 trillion in debt on top of the $14.5 trillion we already owe. (By the way, if it’s difficult to wrap your mind around the $14.5 trillion we already owe as a nation, CLICK HERE to have that number quickly put into perspective.) In the very near future, a quarter of our nation’s budget could be used to pay interest on our debt – an alarming reality to face.
What does all of this mean? While we certainly don’t claim to hold a crystal ball (be cautious of anyone claiming he or she does), some of the signs need no fortune teller for interpretation. The short to medium-range outlook holds all indication of significant volatility – a roller coaster we simply don’t want our clients enduring.
If you, your family members or friends would like a complimentary second opinion on your current financial strategy, we urge you to contact our office today. While no one can predict exactly what the road ahead will look like, we feel certain it will be a bumpy ride for those who’ve failed to prepare. Please don’t let that be you.