Austerity at home and…at home

A new era of austerity at home…

In the last three years we’ve spent 862 billion dollars in stimulus, repaving America, for the most part to spend our way out of a depression. Frankly and from where I’m standing, it hasn’t worked. Official unemployment numbers are still hovering just under 10%, housing isn’t recovering and is lingering in the basement, our credit rating is downgraded to AA+ and the stock markets have all but sold off any gains realized in the last eight months.

So what is the answer? I think; austerity at home and at home. On the home front; create a budget, pay off credit cards, pay down your mortgages and carefully improve the capital in your home. If you don’t have to move, then don’t. If you move then seek ways to creatively do so. Rent your current home so not to incur a loss and capitalize on the fact that others can help you build equity in that investment vehicle.

Looking at a broader scope; the US must eliminate deficit spending and a staggering debt; the debt deal reached didn’t go far enough, instead of cutting 2 trillion, Standard and Pores really wanted to see numbers approaching 4 trillion dollars in cuts. In addition to deficit reduction, the US must reduce outstanding debt; yes that’s right, we need to buy it back. Unfortunately to make this work the Federal Government is going to have to find capital and cutting will only go so far, the logical solution; the tax code needs to be corrected to find additional revenue sources and those NOT paying taxes will have to start doing so.

So, the trillion dollar question remains…will Washington be able to do what needs to be done?