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Missed Fortune – More Stimulus Spending Isn’t the Answer

Posted on | August 28, 2011

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More Failed Stimulus Spending Is On the Way

There is widespread concern among Americans from every part of the country about where this nation is headed.

The Washington Examiner ran an article last week titled “Here Comes More Failed Stimulus Spending.

In this article, it is reported that President Obama will be promising to provide details for more stimulus plans to “get America’s stagnant economy back on the right track.”

Spending $859 billion on stimulus policies in 2009 failed to get the economy growing, so why do they think it will work in 2011? The article asks why the American people would trust these same leaders that squandered the better part of a trillion dollars the first time, to throw hundreds of billions more down the same rate hole?

Doing something over and over again and expecting a different result is a classic example of insanity.

Every time we have a recession, the American people have to tighten their belts and decrease their outgo while increasing their income. But our government does the exact opposite by dramatically increasing its spending in an attempt to spend its way out a the recession.

In another article in the Pittsburgh Tribune titled “Obama Circling Back to the Iceberg”, a recent Gallup poll shows that only 26 percent of the American public approve of the president’s handling of the economy.

That means a whopping 71 percent disapprove. This also indicates that a growing number of Americans are feeling strong dissatisfaction and that’s not surprising.

The National Bureau of Economic Research says that the only U.S. president with a worse record of job creation than Barack Obama was President Herbert Hoover during the Great Depression.

During this past 2 and half years when economic stimulus packages of $3.6 trillion were passed, unemployment was just 7.2% and the promise was that the jobless numbers would drop. Instead, unemployment soared to over 10% and has steadied at 9.2%, nearly 2 percent higher than before the stimulus spending.

In the last 5 years the national debt has climbed from $9.2 trillion to over $14.6 trillion, which means that every U.S. taxpayer would now have to write a check of roughly $150,000 just to pay off the national debt.

If we would have just allocated about 20% of that $3.6 trillion to employers and allowed them to make the decision of who to hire, every single one of those people who have been unemployed could have been hired at $50,000 a year for two years.

Doing the same thing over and over again is making less and less sense.

Amidst all the uncertainty, the state of Wisconsin still stands out as a shining beacon of good news. Remember, this is the state that turned around its economy in just 8 months from a $3.5 billion deficit to a surplus and while creating nearly 9,000 new jobs in the month of June alone.

The state of Wisconsin increased its private sector jobs by 39,000 and its manufacturing jobs by 14,000 while its non-farm growth was two times the national average. The secret to putting Wisconsin’s uncertainty to rest was to lower taxes and business owners were given confidence to grow their businesses without fear of being punished for their success through higher taxes.

Solving the Dangers of Taxes & Inflation

One of the keys to restoring your own certainty and confidence is understanding how to solve the dangers of taxes and inflation.

Whether taxes stay the same or the Bush tax cuts are allowed to expire, it’s in your interest to learn how to accumulate money tax free today and in the future.

If you had a million dollar nest egg generating 7.2% interest and you pulled out $72,000 a year as a married couple filing a joint tax return, every dollar you make over $69,000 is taxed at 25% federally and includes an additional state income tax on top of that in 41 out of 50 states.

About a third of what you earn over that amount is taxed at 33%.

Single tax filers pay about a third on every dollar they earn over $34,500.

This is your marginal tax bracket or what you pay on the last dollars you earn.

If you put money away in IRAs or 401(k)s and you’re thinking you’ll be in a lower tax bracket, you’re in a for a rude awakening.  When you retire and you pull out $72,000 a year, you’ll be paying roughly $2,000 per month just in taxes.  And that’s if taxes don’t go up.

This is why it’s critical that your money grow tax free now and in the future.

When you add in the effects of inflation, the purchasing power of your nest egg will have dropped to the point where it will take $4,000 to purchase what you can now purchase for $1,000.  Your returns must be linked to those things that inflate during inflation in order for you to keep pace with the increasing cost of living.

In addition to these strategies, you’ll need to understand how to position your serious money in such a way that it bypasses market volatility and grows when the market grows but doesn’t lose a dime when the market falls.  These are the Missed Fortune strategies that have been making the difference for decades.

Learn more by meeting with a Missed Fortune advisor.

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*Life insurance policies are not investments and, accordingly, should not be purchased as an investment

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