PLP Advisors, LLC

Financial Advisor Comments: The U.S. Credit Rating Upgraded, Now 'Stable'

Dennis Tubbergen's radio shows are available as podcasts on his website.

 

Grand Rapids, MI -- (ReleaseWire) -- 07/31/2013 -- In our modern world it is difficult to stay on top of everything that is happening financially. Dennis Tubbergen, a financial advisor, author, radio show host and CEO of PLP Advisors, LLC can be counted on to give a little help when it comes to understanding the latest events in U.S. and world economics.

Whether people enjoy his monthly newsletter at www.moving-markets.com or his blog at http://www.dennistubbergen.com, Tubbergen is dedicated to sharing his viewpoints and opinions. On August 1, 2013, his blog was titled U.S. Credit Rating Upgraded.

"Moodys, the rating service, recently upgraded U.S. Government debt from negative to stable," began Tubbergen.

Below he quotes from a July 18, 2013 article in Money News.

Moody's Investors Service upgraded the outlook for U.S. government debt to 'stable' from "negative" and affirmed the United States' blue chip Aaa rating.

The rating agency cited a surprising drop in the federal deficit — the difference between what the government collects in taxes and what it spends. The U.S. government is on track to report its lowest annual deficit in five years.

Through the first eight months of the budget year, the deficit has totaled $509.8 billion, according to the Treasury Departure. That's nearly $400 billion lower than the same period last year.

The Congressional Budget Office forecasts the annual deficit will be $670 billion when the budget year ends on Sept. 30. That would be well below last year's deficit of $1.09 trillion and the lowest since President Barack Obama took office. It would still be the fifth-largest deficit in U.S. history.

The deficit hit a peak 10.1 percent of gross domestic product — the broadest measure of the U.S. economy — in the depths of the Great Recession in 2009. CBO expects the deficit to fall to 3.4 percent of GDP in 2014 and 2.1 percent in 2015.

Moody's had lowered the outlook to "negative" two years ago. But it never went as far as rival Standard & Poor's, which stripped the U.S. of its top credit rating in 2011.

S&P last month upgraded its outlook for long-term U.S. government debt but kept its rating at AA+, a notch below its top grade.

An improving economy and tax hikes and spending cuts that took effect this year have narrowed the government's budget gap.

Still, Moody's warned that the government needed to control longer-term deficits as Baby Boomers age and begin to collect Social Security and Medicare. Failure to do so "could put the rating under pressure again."

"Assuming the CBO’s numbers are reasonably close, a 2.1 percent deficit to GDP ratio is manageable if the economy grows as projected," explained Tubbergen. "That is a big if in my view, but in the meantime, give Washington credit for getting one thing a bit closer to right. It would be nice to see a comprehensive plan to deal with the debt and the deficit, though."

To read the blog in its entirety go to http://www.dennistubbergen.com and select his August 1, 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.oAbu

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 http://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.