We have made a small dent into our public (Federal Govt) budget deficit, but significant work remains to be done. We hope that our elected officials remain vigilant to improve our fiscal health. As such, we continue to believe that economic activity will be sub-par 1 – 2% GDP for the next several years as the government continues to cut spending, and the consumer (albeit better) still struggles with low wage growth and underemployment.
The following is an excerpt from a post from Dr. Ed Yardini this morning that reinforces that we still have some structural problems (redistributing income… another word for entitlements) that must be addressed:
“The federal and state governments are currently redistributing income at an annualized rate of almost $2.4 trillion, which slightly exceeds the sum of federal income and payroll taxes. In effect, every tax dollar collected from workers by the federal government is redistributed to entitlement beneficiaries.”