Will 2013 be another year of expanding debt, high unemployment and low economic growth? It appears that it will be. Regardless of who gets elected, and takes the oath of office in January, 2013 is looking like a replay of 2012. Could things get any worse?
My guess is we will land in a recession in 2013. Growth, if any, will be at a precarious 2.0%. "Fiscal cliff" will become a reality and businesses will continue the waiting game as tax increases and spending reductions loom on the horizon.
China, once the evil savior, has growth problems of its own. That, coupled with recession in Europe, will make U.S. exports to those markets sluggish. The production ripple effect will impact employment and consumer spending here. Employment growth will screech to a halt.
Families already under the stress and strain of 5 years of financial and economic woes will continue to feel the pain. Those lucky enough to have jobs will be working longer for less. 401(k) contributions will continue to decline as employer matching funds are reduced, or cut, and consumers' needs for extra funds will tap whatever resources necessary. Retirement fund growth will be anemic, creating another long term crisis 25 years down the road. Productivity will climb, as businesses get more out of less people. Not good news for the unemployed.
Not much either Obama or Romney can do. This is not like any recession or depression we have seen in the past. Not sure either guy gets it. We just are not seeing the sparks that lead us out of previous recessions. Today's ratio of household debt to GDP is about 90%. During the great recession of the early '80s (bad time to be graduating college) this ratio was 50%. There is no consumer savings, there are no incremental dollars available to help drive a recovery. Consumer debt will continue to increase and not at the low Fed driven interest rate.
We have not seen this in our lifetime. It will take far longer to recover from this financial induced crisis than any other recession we may remember. If anyone tells you that the slow recovery is because of policy, past, present or future, it's an insult to our intelligence.
Demographics are troubling. Can any President control demographics? The U.S. now has the oldest workforce on record. Average age 42. Older workers are more expensive, less flexible, and provide little consumer spending growth. Those older individuals can look forward to interest rates at close to zero for the next three years. If you can get anyone to loan you the "free" money, that could help; conversely, money you have invested in fixed income will be at an extremely low interest rate. Borrowing from older Americans to finance the debt of a younger generation?
Growth will be slow. Neither candidate can do anything about it. How can we make 2013 a better year? Sua Sponte.
Bradford C. Bruner for Sua Sponte Wealth Management
My guess is we will land in a recession in 2013. Growth, if any, will be at a precarious 2.0%. "Fiscal cliff" will become a reality and businesses will continue the waiting game as tax increases and spending reductions loom on the horizon.
China, once the evil savior, has growth problems of its own. That, coupled with recession in Europe, will make U.S. exports to those markets sluggish. The production ripple effect will impact employment and consumer spending here. Employment growth will screech to a halt.
Families already under the stress and strain of 5 years of financial and economic woes will continue to feel the pain. Those lucky enough to have jobs will be working longer for less. 401(k) contributions will continue to decline as employer matching funds are reduced, or cut, and consumers' needs for extra funds will tap whatever resources necessary. Retirement fund growth will be anemic, creating another long term crisis 25 years down the road. Productivity will climb, as businesses get more out of less people. Not good news for the unemployed.
Not much either Obama or Romney can do. This is not like any recession or depression we have seen in the past. Not sure either guy gets it. We just are not seeing the sparks that lead us out of previous recessions. Today's ratio of household debt to GDP is about 90%. During the great recession of the early '80s (bad time to be graduating college) this ratio was 50%. There is no consumer savings, there are no incremental dollars available to help drive a recovery. Consumer debt will continue to increase and not at the low Fed driven interest rate.
We have not seen this in our lifetime. It will take far longer to recover from this financial induced crisis than any other recession we may remember. If anyone tells you that the slow recovery is because of policy, past, present or future, it's an insult to our intelligence.
Demographics are troubling. Can any President control demographics? The U.S. now has the oldest workforce on record. Average age 42. Older workers are more expensive, less flexible, and provide little consumer spending growth. Those older individuals can look forward to interest rates at close to zero for the next three years. If you can get anyone to loan you the "free" money, that could help; conversely, money you have invested in fixed income will be at an extremely low interest rate. Borrowing from older Americans to finance the debt of a younger generation?
Growth will be slow. Neither candidate can do anything about it. How can we make 2013 a better year? Sua Sponte.
Bradford C. Bruner for Sua Sponte Wealth Management
