Archive for January, 2013

Business Groups Propose Raising Age for Entitlement Benefits

Wednesday, January 23rd, 2013

Did you know that Medicare, Medicaid and Social Security account for 42% of the federal budget?

The Business Roundtable, which represents chief executives of major U.S. companies, proposed shoring up Social Security and Medicare by raising the eligibility age without increasing taxes on income subject to the Social Security payroll tax.  

For Social Security, the group’s plan released today in Washington would gradually raise the retirement age to 70 from 67, scale back benefits for wealthier recipients and switch to a method of calculating inflation that would result in lower cost-of-living payments for current and future retirees. 

To read the full article about how business groups are calling for Congress to address the shortfall in funding for Social Security and Medicare as part of the overall debt reduction plan please CLICK HERE.

A Breakdown of the New Fiscal Cliff Law

Tuesday, January 15th, 2013

On January 2, President Barack Obama signed the American Tax Relief Act, an eleventh-hour bill designed to resolve the year-long fiscal cliff debate over expiring tax breaks and automatic spending cuts set to take effect in 2013.  The legislation staves off massive job losses and a potential economic recession, but it raises more questions about government spending policies, entitlement programs and the need for a viable debt reduction plan.

 Peter Lefkin, head of government and external affairs at Allianz of America, highlights the key components of the American Tax Relief Act, which includes permanent lower dividend and income tax rates for households making $450,000 or less.  To see a rundown of the law’s key components please CLICK HERE.

2013: The Beginning of the End of the Great Financial Crisis?

Thursday, January 3rd, 2013

Although risks remain and volatility will continue, Andreas Utermann (global CIO from Allianz) is more positive about the world in 2013 than at any point since 2007.  US growth could surprise on the upside and markets could see the beginning of the end of the great financial crisis.  The key takeways from Utermann’s article on 2013 include:

  1.  1.  China’s robust growth should continue and a turnaround in the US   housing market could lead to an upside surprise.

 2.  Global central banks will continue their ultra-loose monetary policies until economic growth is firmly established.

3.  With nominal bond yields at record-low levels, we do not expect  their return to match inflation over the next 10 years.

4.  We expect equities to continue to outperform bonds.  Although there will be continued volatility, any significant weakness should be used to establish longer-term positions.

5.  Emerging-market assets should continue performing well.

2013 could very well be the year when growth in the US surprises on the upside and markets begin to anticipate the beginning of the end of the great financial crisis.  I encourage you to read the full article on Utermann’s feelings toward 2013.  Please CLICK HERE