Tag Archive for Fiscal Cliff

Markets Respond Favorably To Fiscal Cliff Bill

January 3, 2013 / / Comments Off

Stock Market Was Up After Lawmakers Passed Fiscal Cliff Bill

Economic IndicatorsAfter the fiscal cliff bill passed on Tuesday, bringing closure to a lot of the hype and fear surrounding the Fiscal Cliff and the detrimental affects of 2013 taxation laws, the markets responded favorably.  Both the Down and the S&P 400 were up well over 2% in Wednesday trading, while NASDAQ was up close to 3%.  It appears investors were waiting for some sign that congress would avoid the across the board tax hikes and spending cuts scheduled to take place Jan. 1, 2013.  Instead, Congress  passed a bill averting spending cuts and tax increases to anyone earning less than $4,000 per year.  Since that uncertainty is out of the way for now, the market can better focus on the underlying economy and the recent economic reports that have been pretty good.

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Austerity Didn’t Work In Europe, Why Do We Expect Austerity To Work In The U.S.?

December 31, 2012 / / Comments Off

American Austerity Measures:  How Higher Taxes Will Affect The Economy

Austerity Measures In The U.S.You’ve heard the term, Fiscal Cliff, Fiscal Slope, Fiscal Obstacle Course, no matter what you decide to call it; the obvious impact will be the same.  America is looking at its very own set of Austerity measures, set to take place in 2013.  Without intervention, the America is going to have to make its way around several obstacles that could be seriously detrimental to the economy.

The Fiscal Cliff Is Only A Small Portion Of What’s Facing The American economy

The fiscal cliff has gotten a bad rap, but it is not the only factor impacting the economy in 2013.  For starters:

-1 trillion annual budget deficit

-Possibly raising the debt ceiling

-The Burden and need to reform Medicare and Social Security

-Obamacare, how do we pay for it?

-Fiscal cliff:  Spending cuts and tax hikes

-The impending threat of inflation or hyperinflation

Is Austerity Measure Really The Solution To The Fiscal Cliff And Other Economic Problems?

We’ve all been watching Europe for the last several years, and austerity has taken them from bad to worse.  In the U.S., if Congress doesn’t act soon to help alleviate some of the tax burden facing us in 2013, American could be headed right down the path towards austerity.  With a lukewarm economy that is growing by a weak 2% per year, greater financial burden could put us right back into recession.

Look Where Austerity Measures Has Led Greece And Other European Nations? 

The fact of the matter is, austerity does not work.  Yes it may succeed in generating temporary extra revenue, but it also succeeds in squelching any future economic growth.  You can’t bleed a turnip, and frankly, when businesses start feeling the squeeze they let their employees suffer first.  Soon there will be more unemployed, more reliant on the government for assistance, and a serious downward spiral can ensue.  Take Greece for example, thanks to austerity, the government is nowhere near clearing their debt burden, and currently 25% of the Greek people are without work.

As an investor you’ve probably had your eyes on the American “wall of worry” for some time now, and if you’re like most you have very little idea on which way to go with your investments.  With the possible threat of inflation it’s difficult to ascertain “wise”, “safe” investment choices.  Thankfully Redhawk Advisors offer unique investment options that are perfectly designed for today’s economy.  For more information on how to protect your assets in order to weather the storm ahead, speak to a Redhawk advisor near you today.

 

 

Category: Financial Advisor, Investments, taxes, Uncategorized, US Economy / Tags: , , , , , , , , , , ,

The Fiscal Cliff: Only A Small Bump In The Road

December 30, 2012 / / Comments Off

Fiscal CliffFiscal Cliff:  The End Of The World?  Or Just Another Bump In The Road…

As Americans we have a tendency to get hyped up on conspiracy theories and other doom and gloom plots.  As 1999 rolled into 2000, many Americans were stocking up on flashlights, batteries, generators and food in the event Y2K were to strike leaving America without power, heat, or any modern technology.  Yet, Y2K passed with no major consequences and several years later people were tossing out barrels of grain that had gone bad over the years of not being utilized.  The Mayan calendar had the same effect.  People were all edgy about the possible end of the world on December, 21st 2012.  Well, the 21st has come and gone…and we are still here…still pressing forward.  Now, the fiscal cliff lurks around the corner.  People are paralyzed in their financial decision making and investments because they don’t know what decision congress will reach regarding the tax hikes and spending cuts that are scheduled to occur.  Although, unlike the other anticlimactic theories, the fiscal cliff has some merit due to the effect of higher taxes on the economy, however, like anything else…we will get through it.

What Will The Consequences Of The Fiscal Cliff Be?

President Obama and Congress have been under pressure to find a solution that not only boosts the economy, reduces the deficit, and does not impact entitlements.  However, in actuality that is an impossible feat. Thus, congress has been at an impasse trying to determine the best way to target the fiscal cliff.  Currently the tax hikes and spending cuts that are scheduled are expected to decrease the 2013 economy by 5%.  If there was no fiscal cliff, the economic prognosis for 2013 would be rather promising.

What Will Obama Do To Help Us Through The Fiscal Cliff?

The current plan by Obama and Congress is to avoid raising taxes on the middle class and to prevent the automatic spending cuts, which will equal 2% of the GDP.  However, the payroll tax cut and an imposition of discretionary spending will depress 1.9% of GDP.  This still may be too much pressure on an already struggling and weak economy.

Without The Fiscal Cliff The 2013 Economy Would Be Showing Improvement

If the fiscal cliff were not to happen, 2013 would have a better outlook for the economy.  The housing market is showing signs of reaching the bottom, which means the only direction it can go is up.  New home sales are already up by 38%.  They certainly still have a ways to go, but they are going the right direction.  The banks are holding onto 7 trillion in savings deposits for retail customers, which is up from 4 trillion four years ago.  If the confidence in the economy were to improve, imagine how much of that money would make its way from the safety of the banks vaults into more risky investment ventures.

Although the fiscal cliff may pose some uncertainty in the upcoming months, in reality it’s just another bump in the road.  As an investor it would be prudent to talk to a Redhawk advisor today about the possible implications of the fiscal cliff on your own investments and income.  By doing so you can help lighten the blow on your personal finances by taking steps in preparation before the end of 2012, for more information find a Redhawk Advisor near you today.

Category: Economic News, Financial Advisor, Financial Planning/Retirement Planning, Investments, taxes, US Economy / Tags: , , , , , , ,

What Do I Do With My Portfolio To Save Myself From Higher Taxes?

December 4, 2012 / / Comments Off

Will The Fiscal Cliff Cause Me To Experience Higher Taxes?

Fiscal CliffLawmakers have been concerned about the “fiscal cliff” for months now.  With each day we get closer and closer to January 1, where income tax, capital gains, and dividends will all of a sudden be taxed at a much higher tax rate.  As a result, many are speculating what the impact will be on the economy, the stock market and on individual investors.  With the new imposing tax laws, the average American will see an increase on their taxes by about $3500 per year!  I don’t know about you, but there are very few people out there who would say they have an extra$3500 just sitting around to throw at Uncle Sam!  Additionally, for those who have wisely invested their hard earned money in the stock market and other investments they will take a major hit as capital gains and dividends are some of the heaviest taxed items.

Make Decisions Now Regarding Your Portfolio To Reduce Your Tax Exposure

If you are thinking about making some changes to your portfolio to reduce your exposure to the new taxes, now is the time to do so!  Your redhawk advisor may have many suggestions for you in how you can best manage what you have to maximize your profit, while reducing your exposure to higher taxes.  One specific idea is to manage your capital gains.  If you have a stock or an investment that has performed very well it may be time to sell it!  If you can lock in your biggest winners now, you will be able to pay the December 2012 tax rates, rather than the January 2013 tax rates.  The difference from one month to a next can be worth thousands and thousands to your porfolio.   Another option is to consider purchasing a Roth IRA.  Roth IRA’s are taxed at today’s tax rate.  So whatever you put into you IRA would be taxed at Dec. 2012 tax rate.  Also, when you choose to withdraw your money in the future it will have already been taxed, and will not be exposed to the higher taxes.

Stop Worrying About The Fiscal Cliff And Take Control Over Your Finances

If the fiscal cliff has you concerned, today is the day to be proactive about your financial future.  Take the time to find a Redhawk advisor near you who can guide you through the different taxes, the risks, and exposure of your investments to help you determine the best course of action for your portfolio.

 

 

Category: Economic News, Financial Advisor, Financial Planning/Retirement Planning, Investments, taxes, US Economy / Tags: , , , , , , , , ,

Update: How Will The Fiscal Cliff Affect Me?

November 23, 2012 / / Comments Off

The Fiscal Cliff?  So What, What Does It Mean For My Finances? 

Fiscal CliffThe looming ominous term “fiscal cliff” has been tossed around so many times over the last year that many of us have kind of “tuned out” the threat it poses.  We hear about higher taxes, we even voted President Obama, who supports higher taxes, back into office and yet we still haven’t taken the time to sit and figure out the bearing it may have on our financial well-being.  Following are 6 specific ways the Fiscal Cliff will impact you…

The Fiscal Cliff Will Cause Higher Taxes On Income

Taxes, no one looks forward to paying the government thousands of dollars every single year, and many of us dread the approach of tax day knowing that it could cost a pretty penny.  However, the taxes we are experiencing right now, are nothing compared to what they will be next year after the fiscal cliff raises income tax rates.  Currently, the tax brackets are taxed as follows:

2012 taxes:  10%, 15%, 25%, 28%, 33%, 35%

2013 taxes:  15%, 28%, 31%, 36%, 39.6%

No matter who you are, no matter how much or little you  make, these higher taxes will affect you.  The 2013 taxes will be the equivalent of an additional $2,000/year in taxes for middle income families…ouch!

The Fiscal Cliff Will Cause Unemployment To Rise

The Congressional Budget Office believes that 3.4 billion jobs will be lost due to a slowing economy.  This is largely due to:

-cuts in defense spending leading to the loss of military jobs

-higher taxes for businesses causing them to layoff employees

-less job creation due to a slowing economy

The Fiscal Cliff Is Accompanied By The Expiration of Unemployment Benefits

In 2008 when the economy was suffering so terribly, congress passed a law, allowing for federal money to extend unemployment for individuals who had exhausted their state funds.  This provision is also set to expire December 2012 and will affect 2 million Americans.

The Fiscal Cliff Will Cause Investments To Be Taxed At A Higher Rate

One of the benefits of investing is the many tax benefits it offers to have income generated from an investment.  However, due to the fiscal cliff many of those benefits will disappear.  Capital gains taxes will go from 15-20%, and dividends will be taxed at the individual income tax rate rather than a fixed 15%.  This will have a huge impact on retirees especially who withdraw income from retirement plans including annuities, and 401(k) plans.  The higher tax rates will seriously diminish the amount of actual income a retiree will have to work with.

The Fiscal Cliff Will Cause Estate and Gift Taxes to Increase And Exemptions To Decrease

The current exemption for an estate or gift tax is 5.12 million, anything over that amount is being taxed at 35%.  At the end of the year, the exemption will change to only 1 million.  Anything over 1 million will be taxed at a whopping 55%!  Unfortunately, it doesn’t take much for an estate, including house and assets to add up to a million dollars.  This will be a huge hurdle for parents planning on passing down an inheritance to their children.

The Fiscal Cliff Will Cause Social Security Payroll Taxes To Increase

Currently, social security is being taxed at 4.2% on the first $110,000 earned this is set to expire and will increase to 6.2%.  This will mean that the average retiree on a fixed income will be taxed an additional $20/week.

What it boils down to, is no matter who you are or how much you earn in a given year, these tax hikes will have an affect on your finances.  Rather than being a victim to these circumstances, make a decision now to speak to a tax advisor and a financial planner to learn how to invest to decrease your tax liability.

Statistics taken from:

http://www.investopedia.com/financial-edge/1112/6-ways-the-fiscal-cliff-could-affect-you.aspx?utm_source=Sailthru&utm_medium=email&utm_term=newstouse&utm_campaign=NTU-11%2F21%2F2012-st#axzz2D4O2KPEU

Category: Economic News, Financial Planning/Retirement Planning, Investments, taxes, US Economy / Tags: , , , , , , , , , , , , , , , , ,

Update: What’s Going To Happen To The U.S. Taxation Policies Under President Obama?

November 7, 2012 / / Comments Off

The Elections Over, And All Eyes Are On Obama To See How He Will Address The Fiscal Cliff:

Fiscal Cliff And Tax Hikes

Update: Fiscal CliffIf Romney had been elected president we all felt pretty sure that his plan would have been to keep taxation at the same rate until the economy had seen significant improvement.  Now that we know president Obama’s continuing in office, the issue of the Fiscal Cliff, and the U.S. taxation policies takes on greater concern.  At the end of 2012, a series of Bush era tax cuts are set to expire, which could suck 500 billion U.S. dollars out of the economy, sending the economy into a full fledged tail spin.  Without intervention by President Obama and Congress, the highest tax bracket will be at 39.6%.  The Income level for the alternative minimum tax will go back to 2000 levels, capital gains will go from 15%-20%, and dividends will go from being taxed at 15% to being taxed at normal income levels.

Fiscal Cliff And Spending Cuts

In addition to the anticipated tax increases, the other component to the fiscal cliff is a reduction in spending towards defense and discretionary spending (ie; social welfare programs).  We will also see the expiration of a 2% reduction in payroll taxes under the new laws .

Update:  How Can The Problem OF The Fiscal Cliff Be Avoided?

Unfortunately, the entire problem of the fiscal cliff rests on President Obama and a lame duck congress.  Currently, the president has vowed to allow tax cuts to expire for the upper tax brackets, and congress has refused to budget at all on their stance that the tax hikes should not occur.  As long as they are at a stand still nothing will change and the U.S. will go over the cliff.  Eric Solomon from U.S. Treasury made the comment:  “The president could say ‘no deal’ and let everything expire or he could find a way to reach a compromise, allowing for an extension of our current circumstances.

As an investor it would be wise to keep a close eye on how the President and Congress choose to deal with the situation of the fiscal cliff.  If in fact, Obama plans to allow for the U.S. to go over the cliff, it would be wise to reconsider positions in investments yielding dividends.  For more information on how to protect yourself from any negative impact caused by the new tax policies visit redhawkwa.com 

 

Category: Economic News, Financial Planning/Retirement Planning, taxes, US Economy / Tags: , , , , , , , , , , , ,

What If Congress Lets Us Go Over The Fiscal Cliff?

September 19, 2012 / / Comments Off

Congress May Choose To Let Us Go Over The Fiscal Cliff

Fiscal CliffFor months we have been talking about the potentially destructive “fiscal cliff” that awaits the US economy at the end of 2012.  The fiscal cliff includes the end of bush era tax cuts and the implementation of some serious spending cuts that would suck a total of $400 billion out of the economy.  Overall, the reaction to the “cliff” has been predominately negative.  There has been an overarching concern over how going over the cliff could send the economy into a tailspin and create another recession.  Interestingly enough, not every congressman holds to that sentiment.  Many in congress have made an appeal to allow the US to experience the fiscal cliff, because they see it as a way to reduce the national deficit.

Senator Patty Murray Is All For Going Over The Fiscal Cliff

One example of an individual who is all for the United States going over the fiscal cliff, is the democratic senator Patty Murray; Murray has expressed that allowing the spending cuts to occur in conjunction with the tax hikes is preferable to creating a budget plan that includes only spending cuts.  She strongly prefers the “package deal” of automatic spending cuts and across the board tax increases included in the fiscal cliff, than allowing for tax cuts for high income households.

The Benefits To Going Over The Fiscal Cliff

Those who feel that the US should be allowed to go over the fiscal cliff feel that this strategy forces the US to cut down on the deficit.  After these taxation policies go into effect the deficit will go from trillion a year to only 585 billion a year, that is a significant difference.  Also, the opinion is that if the taxes are raised high enough then after time if they are lowered to a “middle ground” it will appear to be a tax break.  Everything is about perception.  It’s like telling a 2 year old that they can’t have any ice cream, when they really want three scoops of ice cream.  That way when you come around and allow one scoop of ice cream it appears that you are being generous.

What About The Fallout From The Fiscal Cliff?

With the tumultuous economy we have been experiencing for the last several years, lawmakers could be playing with fire if they allow the US to go over the cliff.  Even though they are projecting that the recession it causes will be short lived, the cliff will cause 400 billion to be sucked out of the economy.  Who’s to say what the long term implications of that will be?

As an investor it’s difficult to predict which direction congress will go and how the decisions made will impact your investments.  If the tax hikes occur we could see the US slip right back into a major recession, if that occurs are your investments secure?  If you don’t know the answer to that with certainty, than it is wise to examine your portfolio now before the fiscal changes occur.  For more information on investments that are expected to perform in today’s economy visit redmoneyupdate.com 

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The Global Economy Has Many Factors Working Against It In The Upcoming Year

September 18, 2012 / / Comments Off

Nouriel Roubini Addresses The Wall Of Worry Facing The Global Economy

global economyIn a recent USA Today article, Nouiriel Roubini, the co-founder of the economic strategy firm, Roubini Global Economies in New York has offered his opinion and concerns regarding the so-called “wall of worry” that is facing the US, Europe, Asia and the emerging markets.  According to Roubini we can expect flat growth for the next year until much of the uncertainty clears the air.  Currently growth is slow across the globe, there is a recession in Europe, a double dip recession in the UK, sluggish growth in Japan, and the emerging markets are experiencing major slow-downs.  Here in the US we are impacted not only by the “hiccup effect” of other world-economies, we have our own mountain to climb with the upcoming fiscal cliff at the end of this year.

US Economy And The Fiscal Cliff

Here in the US we have seen growth at 2%, which is still positive-barely, but is well below trend.  The job market has been cranking out weak numbers for months now, which will only worsen when the US goes over the fiscal cliff and begins the process of deleveraging the nations’ debt.  The “fiscal cliff” as many have termed it includes tax hikes on income, dividends, capital gains and estates, as well as the implementation of a payroll tax.  In conjunction with these tax hikes we will also be seeing wide-spread spending cuts on both infrastructure and discretionary spending.  The Fiscal cliff will create a huge hole of spending deficits totaling 600 billion that will further push the US economy deep into recessions.  Even if the congress can come to some form of an agreement regarding the taxation policies and the spending cuts that are anticipated, the US will still experience a slow-down from whatever portions of the fiscal-cliff that remains intact.

European Economy And The Hiccup Effect On The US Economy

In Europe we are seeing a worsening recession due to harsh austerity measures.  For many of the countries in Euro’s periphery like Greece, Portugal, Cyprus, Ireland, and even Spain and Italy; the value of the Euro has become too strong for them to sustain it in their struggling economies.  Additionally, the same countries are experiencing a credit problem, where the banks have no capital and lending is at a stand still.  It’s difficult to regenerate economy, when the banks can’t lend, and the growth is stifled by austerity.  In a nut shell, we are seeing smaller weaker countries that are sick and tired of austerity, and bigger stronger countries that are absolutely exasperated by the incessant bailouts of the smaller countries.  At some point something’s got to give.   If Greece or any of the smaller countries choose to bailout of the Euro the impact on the euro zone will be minimal, however if Spain or Italy follow suit, as the second and third largest economy in the Euro the impact would be devastating, and would probably cause the collapse of the Euro Zone.

How Does The Wall Of Worry Caused By The Global Economy Impact The US?

In addition to our own problems, the US is hugely interconnected with Europe.  When the European stock market adjusts, the US markets follow a similar pattern.  Additionally, many US businesses have factories operating in Europe and overseas.  Around half of the profits from the S&P 500 come from foreign operations.   By now you’re seeing the big picture.  If the rest of the world contracts, there is no way to avoid the fallout, we’re all in it together.  As an investor this can paint a rather glum picture, but it’s important to remember that no economic situation is forever, and if you hope to keep along-term perspective on your investments there are many opportunities to behold.   For more information on how to make the most of today’s global economy and turn crisis into success talk to a redhawk advisor today.

 

http://www.usatoday.com/money/companies/management/bartiromo/story/2012-05-18/nouriel-roubini-global-economics/55094776/1

Category: Economic News, global economy, Investments, US Economy / Tags: , , , , , , ,

Riding Over The Fiscal Cliff Into 2013

September 5, 2012 / / Comments Off

Congress Will Probably Allow The US To Go Over The Fiscal Cliff

Tax PolicyThere has been increasing amount of discussion regarding the termed “Fiscal Cliff” and it’s potential impact on the US economy.  Basically, at the end of 2012 a series of bush era tax cuts are set to expire, and some significant spending cuts are to be imposed.  Everyone is up in arms over these tax policies.  The democrats have one idea on how it should go, with a real emphasis on taxing the rich and keeping the tax cuts for the low to middle class; whereas the republicans are emphasizing keeping taxes low for everyone in the hopes that the economy will respond favorably.  While they remain at this impasse, the days are ticking by and we are getting closer and closer to the edge of the fiscal cliff.

Allowing The US To Go Over the Fiscal Cliff

Peter Orszag, the vice chairman of global banking at citi group believes that the US is headed right over the cliff.  His feeling is congress will probably do nothing to ease the fiscal policies during the lame duck session after the elections in November.  In all likelihood, the US economy will go over the cliff but congress will offer up a plan to retroactively deal with the problem in January.  According to Orszag, in all likelihood there will be a combining of progressive tax cuts and raising the debt limit.

The CBO Warns Of The Implications Of Going Over The Fiscal Cliff

In spite of the speculation out there, the Congressional Budget Office, CBO, has  estimated that the fiscal cliff in its current tax policies will cause the US economy to contract by 0.5% and unemployment could skyrocket to over 9%. The implications on the economy could be devastating.

Until a final decision is reached and congress gets passed their current impasse, many Americans will be biting their nails over what’s to come regarding fiscal policy.  In fact, fiscal policy itself could be a major issue in the upcoming elections.  In all of this its very important to ask yourself whether or not you are prepared for what’s to come in today’s economy.  Are your assets secure?  If you can’t say yes with confidence then it is time to talk to a redhawk advisor to determine whether you are properly positioned in regard to tax liability and profit potential.  For more information visit greenmoneyupdate.com 

http://www.moneynews.com/StreetTalk/orszag-citigroup-fiscal-cliff-congress/2012/09/05/id/450914

Riding Over The Fiscal Cliff Into 2013

Congress Will Probably Allow The US To Go Over The Fiscal Cliff

There has been increasing amount of discussion regarding the termed “Fiscal Cliff” and it’s potential impact on the US economy.  Basically, at the end of 2012 a series of bush era tax cuts are set to expire, and some significant spending cuts are to be imposed.  Everyone is up in arms over these tax policies.  The democrats have one idea on how it should go, with a real emphasis on taxing the rich and keeping the tax cuts for the low to middle class; whereas the republicans are emphasizing keeping taxes low for everyone in the hopes that the economy will respond favorably.  While they remain at this impasse, the days are ticking by and we are getting closer and closer to the edge of the fiscal cliff.

Allowing The US To Go Over the Fiscal Cliff

Peter Orszag, the vice chairman of global banking at citi group believes that the US is headed right over the cliff.  His feeling is congress will probably do nothing to ease the fiscal policies during the lame duck session after the elections in November.  In all likelihood, the US economy will go over the cliff but congress will offer up a plan to retroactively deal with the problem in January.  According to Orszag, in all likelihood there will be a combining of progressive tax cuts and raising the debt limit.

The CBO Warns Of The Implications Of Going Over The Fiscal Cliff

In spite of the speculation out there, the Congressional Budget Office, CBO, has  estimated that the fiscal cliff in its current tax policies will cause the US economy to contract by 0.5% and unemployment could skyrocket to over 9%. The implications on the economy could be devastating.

Until a final decision is reached and congress gets passed their current impasse, many Americans will be biting their nails over what’s to come regarding fiscal policy.  In fact, fiscal policy itself could be a major issue in the upcoming elections.  In all of this its very important to ask yourself whether or not you are prepared for what’s to come in today’s economy.  Are your assets secure?  If you can’t say yes with confidence then it is time to talk to a redhawk advisor to determine whether you are properly positioned in regard to tax liability and profit potential.  For more information visit greenmoneyupdate.com

http://www.moneynews.com/StreetTalk/orszag-citigroup-fiscal-cliff-congress/2012/09/05/id/450914

Category: Economic News, Investments, US Economy / Tags: , , , , ,

Fiscal Cliff Is Striking Fear Into The Defense Industry

August 20, 2012 / / Comments Off

Could Going Over The Fiscal Cliff Destroy Millions Of Jobs?

At the end of 2012 the US is set to experience a series of tax hikes and spending cuts that could have a drastic impact on the nation’s economy.  Among the spending cuts is 55 billion dollar cut in defense spending.  The overall goal is to gain control of the nation’s debt and reduce federal spending by 1.2 trillion dollars every year.  However, in spite of the good intentions to reduce debt, the tax hikes and spending cuts are rather short-sighted due to the devastating implications they could have on the economy.

What Will Happen If 55 Billion Is Cut From The US Defense?

For starters, 1 million people will lose their jobs.  If that number is combined with other non-defense spending cuts, a total of 2 million people will be out of work at the end of 2012 if congress does not intervene and prevent the fiscal cliff from occurring.  Think about how devastating it will be to the economy and the morale of the American people if another 2 million Americans are out of work.  Currently unemployment has been firmly above 8% and that number does not include discouraged workers or underemployed workers.  Another 2 million jobs lost could be very destructive.

AeroSpace Industry Is Getting Prepared For Layoffs After Fiscal Cliff

In a recent Reuter’s article, many employees from the south Florida’s aerospace industry were interviewed regarding the impact of the spending cuts on the US defense.  Of the employees interviewed many of them were very uncertain about their future saying that the whole company is in a holding pattern until congress makes a decision on the fiscal cliff.  Both personal and corporate spending is on hold right now.  Some employees are unsure of how they are going to pay for their kid’s college, others are holding off on purchasing a home.  Uncertainty and worry are the prevailing emotions among workers.

Congress Needs To Act To Protect Americans From The Fiscal Cliff

Fiscal CliffOne of the most destructive things is congress’s silence on the manner.  Even though republicans and democrats aren’t agreeing on taxation and budget, by congress remaining silent it only deepens the level of uncertainty. One worker from the aerospace technology in Florida made the comment:  the term “’do nothing Congress’ is a misnomer, Congress is doing something even when it’s not.  When you’re required to make a decision and you don’t make one that is a decision.”  By not taking action, congress is making a decision through their inaction.

The Fiscal Cliff has been gaining attention as many wonder how it will impact the economy as a whole and investments in general.  If you have not yet spoken to a financial planner to make sure you are properly prepared for the economic times ahead, now is the time to do so.  For more information speak to a redhawk advisor today.  Click Here for more information.

http://www.reuters.com/article/2012/08/19/us-usa-congress-defensecuts-idUSBRE87I03B20120819

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