If we slash trillions from the federal budget, what does that do to our GDP?
The summer of discontent stretches on. As July ebbs into August, we have no resolution on the federal debt limit issue. The possibility of default is still in play. Republican leaders want major cuts to entitlement programs as a condition of raising the debt ceiling; Democrats agree on the necessity of cuts but also want tax hikes for the wealthiest Americans to bring in added revenue.
A trillion-dollar divide. On July 14, CNBC.com reported that both parties had tentatively agreed on nearly $1.4 trillion worth of reductions to the federal budget. That’s not too surprising: $1.4 trillion is the projected size of the budget gap for the fiscal year ending in September. Republicans have called for $2.4 trillion in cuts.1,2
This federal belt-tightening is going to lead politicians, economists and consumers into the second part of the debt cap (more…)
Is there a chance that America could actually default on its debt?
When will the debt ceiling issue be solved? The NFL, the NBA, the EU, Congress … wherever you look, it seems people would rather wrangle these days than resolve their differences. The U.S. Treasury has set a hard deadline of August 2 for Congress to settle its divide on the federal debt ceiling, and if partisan bickering interferes, the world economy could suffer a severe hit.
What would happen if we miss the deadline? According to federal budget analysts at the Bipartisan Policy Center, the Treasury would only be able to make a slight majority of its 80 million monthly payments in August. Treasury Secretary Timothy Geithner would likely be put in the same position as a struggling consumer low on cash and behind on his bills: he would have to selectively decide which debts to pay for the month and which to ignore.1
Should August 2 come and go without a solution, Congress’s inaction (and Geithner’s subsequent decisions) would have dramatic global repercussions. Most likely, his big priority would be to pay off bond investors so that a formal (more…)
With overseas investments, we remind people that, “international markets carry additional risks, which include differences in financial reporting standards, currency exchange rates, political risk, foreign taxes and regulations.” The Chinese markets are no exception to that.
Summer jobs are a perennial aspect of the American workforce. It’s a time when teenagers are filling out applications and, in many cases, earning wages of their own for the first time. But some of what we’ve become accustomed to may be changing.
High net worth investors face investment challenges that some would consider unique to their financial status. The fundamental tenets of investing apply just as equally to them as any other investor, but these investors need to be mindful of issues that typically arise only from substantial wealth. Let’s examine a few of these.
Corporate earnings season has begun, and the results are turning heads on Wall Street. Of the 120 companies in the S&P 500 index that reported numbers as of Friday, July 23, 89% of them beat the Street’s earnings-per-share estimates by an average of nearly 21%.1
Given the threat of COVID-19, seniors today may be considering their eldercare alternatives with extra caution. In addition to health factors, the cost can be an issue. According to Genworth’s 2020 Cost of Care Survey, the median annual cost of a semi-private room in a nursing home is now $90,000. A single-occupancy room may cost … Continue reading “Eldercare Choices in the COVID-19 Era”
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