Grand Rapids, MI -- (ReleaseWire) -- 06/05/2013 -- When financial advisor Dennis Tubbergen isn't helping his own clients he can usually be found writing his daily blog, his weekly newsletter Moving Markets or interviewing his next guest expert for his weekly radio show.
Tubbergen's next guest is Jim Babka, a writer, activist and former radio talk show host. Babka is currently president of the Downsize DC Foundation and DownsizeDC.org. According to Babka, DownsizeDC.org is an organization that makes it easy for every day citizens, with jobs and busy lives, to express their wishes to their two Senators and Representative. It is free and easy to use.
Tubbergen, who is an author, radio show host, and CEO of PLP Advisors, LLC, spends a lot of time giving his opinions on the economy in his online financial blog. On May 28, 2013 his blog was titled U.S. Budget Deficit Less Than Predicted.
"The Congressional Budget Office, a non-partisan organization, reported recently that the U.S. government's budget deficit will fall to $642 billion, down from the $845 billion that was originally projected," began Tubbergen.
Below he quotes from an article on the subject published May 14, 2013 by UPI.
The U.S. budget deficit is shrinking faster than thought, falling to $642 billion from the $845 billion projected in February, number-crunchers said Tuesday.
The Congressional Budget Office said the unanticipated $203 billion cut to the current-year shortfall -- a 24 percent drop from just three months ago -- comes from higher-than-expected individual and corporate tax payments and $95 billion in expected dividend payments from mortgage-finance companies Fannie Mae and Freddie Mac.
Both private companies were bailed out by taxpayers in 2008 and have been under temporary government control since.
The shrinking budget deficit has nothing to do with the $85 billion in mandatory, across-the-board budget cuts, known as sequestration, that went into effect March 1 or with tax increases Congress passed in the winter to avoid the so-called fiscal cliff, the non-partisan CB O, which provides economic date to Congress, said.
Those policy changes were already worked into the February forecast, it said.
The $845 billion in red ink in February would have put the deficit at 5.4 percent of economic output. The new projection would put the deficit at 4 percent of gross domestic production.
The deficit was 7 percent of the budget in 2012 and 10.1 percent in 2009.
The improving deficit picture will likely continue until 2016, when spending picks up as a share of the economy and revenue levels off, the CBO said.
At that point, Medicare and Social Security are expected to start taking an even larger share of the budget, with Social Security and government healthcare spending hitting an expected $3 trillion, or half the budget, by 2023, the office said.
"This is good news, at least in the short term," explained Tubbergen. "However, the long-term picture is still bleak largely due to entitlement spending on Medicare and Social Security. To the President's credit, in his proposed budget he did propose that the growth of the Social Security program be slowed."
What is Tubbergen's bottom line here?
"It's a step in the right direction but a long way from where we need to be," Tubbergen concludes.
Moody's Investor Services, a rating agency, agrees. Unless the U.S. addresses long-term debt levels, the agency has stated the country risks a credit rating cut.
"Short-term, however, given the state of much of the rest of the world, this is likely bullish for the dollar," states Tubbergen.
To read the blog in its entirety go to http://www.dennistubbergen.com and select his May 28, 2013 entry.
Tubbergen’s syndicated radio show can be heard on metro Michigan stations WTKG 1230 AM and WOOD Newsradio1300 AM and 106.9 FM.
About Dennis Tubbergen
Dennis Tubbergen has been in the financial industry for over 25 years and has his corporate offices in Grand Rapids, Michigan. Tubbergen is CEO of PLP Advisors, LLC and has an online blog that can be read at www.dennistubbergen.com. To view Tubbergen’s latest Moving Markets? newsletter, go to www.moving-markets.com.
The opinions expressed herein are those of the writer and not necessarily those of USA Wealth Management, LLC. This update may contain forward-looking statements, including, but not limited to, statements as to future events that involve various risks and uncertainties. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual events or results to differ materially from those that were forecasted. Therefore, no forecast should be construed as a guarantee. Prior to making any investment decision, individuals should consult a professional to determine the risks, costs, benefits and fees associated with a particular investment. Information obtained from third party resources is believed to be reliable but the accuracy cannot be guaranteed.