As I write this at 5:30am, there is still no clear sign that Congress will agree and act on the debt ceiling issue.
There’s a big surprise…politicians no getting things done that need to be done.
Our country is over-extended. If the debt ceiling is raised and the additional spending approved, the United States of America will have doubled our debt in just 5 years to the tune of $17 Trillion +/-.
We deserve to have our rating downgraded (even though the rating companies don’t have much respect these days). We are upside down on our spending vs. revenue ratio. Could you or I run our household or business with the type of monkey-math that the United States government uses? Of course not. What would happen if you couldn’t make your mortgage payment because you didn’t have the money and called the bank for a loan? They would deny your request and they’d probably want their free toaster back they gave you when you became a customer!
As the title of this post implies, this is a purely political play right now. The Administration wants a couple of trillion dollars in spending to get it through the election next year, and the Republications and Independents don’t want to offer up the blank check. Now, the repercussions of the political wrangling comes at a very bad time. The U.S. economy is stuck in the mud and citizens, consumers, investors, small businesses and corporate America are all dealing with a train load of uncertainty.
Having said all of that, I think this “out in the open” fighting and debate is a good thing. It allows Americans to access where the country is today, and more importantly, where we want to go. Do we want to return to a country of the highest standards, morals, and financial strength of the past, or do we want to continue to live beyond our means and drift to the bottom of the fish tank.
As a wealth manager, I am frequently asked how I handle this type of political event, with all of its financial implications. As this scenario plays out, and in order to combat the volatility and weak economic environment, my firm employs conservative and diversified strategies for the wealth that our clients have entrusted to us. We will continue to offer an unparalleled level of service, sophistication, tools, strategies, and models to provide consistent protection and the pursuit of growth that our clients expect.
Tune in to Your Financial Editor this Saturday at 8am on AM 930 WFMD to hear more as the debate rages on!