Welcome to Silly Season...The Fiscal Cliff
For years, I have been a fan of auto racing. Usually by mid-summer auto racing drivers enter what is known as the silly season, a time of year when the speculation begins about who will be driving for what car during the next year. But we have now entered a silly season of much greater importance. The silly season I write of is the fiscal cliff negotiations being played out in Washington.
Recently I came across a report from the Heritage Foundation called Federal Spending By The Numbers-2012 written by Alison Acosta Fraser. You may read the full report by going to this website; http://www.heritage.org/research/reports/2012/10/federal-spending-by-the... The report analyzes the various ways our government spends our taxes. Some points from the report I found interesting are:
- Medicare, Medicaid, and Social Security are about 44% of the federal budget.
- For every $6.80 the federal government collected in taxes in 2012, it spent $10.
- In the past 20 years, federal outlays have grown 71% faster than inflation.
Obviously, we are on a path that is not sustainable. Erskine Bowles stated on a recent interview on CNBC, “For years we have judged our politicians by bringing home the bacon, I am here to tell you the pig is dead”.
Considering these enormous fiscal challenges our government faces, have you reviewed your retirement income plan? Does your retirement income plan have the flexibility to adjust to the potential challenges and opportunities that lie ahead?