In his first address before Congress in late February 2001, President George W. Bush promised that his ‘responsible” budget plans would “pay down an unprecedented amount of our national debt.” However, from February 2001 to January 2009 (when Bush left office), the national debt of the USA increased by $4.9 trillion dollars to $10.6 trillion. President Barack Obama never made any promises to balance the nation’s annual budget, and during his 8 years in office the national debt increased $9.3 trillion to $19.9 trillion. President Donald Trump’s 10-year budget plan (that will be released on Tuesday 5/23/17) will document his proposal to balance our nation’s annual budget over the next 10 years. However the reality is that the USA has failed to produce a balance budget (revenues equal to outlays) in 52 of the last 57 fiscal years, i.e., 1961-2017 (source: CBO).
Last summer’s report from the Social Security Board of Trustees forecasted that the trust fund backing Social Security retirement benefits will be exhausted in 2035. Proposed House legislation (“Social Security 2100 Act”) by John Larsen (D-CT) would increase from 6.2% to 7.4% the Social Security payroll tax rate (unchanged since 1990) paid by employees, phased in over 24 years from 2019-2042. Larsen’s plan would also phase out the current $127,200 ceiling on earnings subject to payroll taxes so that by the year 2047 all earnings would be taxed (source: Social Security Office of the Chief Actuary).
The US dollar fell to its lowest level against the Euro in 7 ½ months last Friday (5/19/17). Political tensions in Washington along with less than stellar economic data have caused the demand for the greenback to slip 6% since the end of 2016 (source: BTN Research).
Notable Numbers for the Week:
NO TAX DEDUCTION - The deductibility of mortgage interest expense reduces individual income taxes by $77 billion per year. Canada and Australia do not allow its taxpayers to deduct mortgage interest expense (source: IRS).
GRASS IS GREENER - 34% of American workers anticipate that they will have a different job with a new employer within 12 months (source: Met Life US Employee Benefit Trends Study).
HERE TODAY, GONE TOMORROW - 23% of American workers surveyed in April 2017 are concerned about losing their jobs (source: Fannie Mae).
I DON’T SEE IT - A painting sold for $110.5 million at Sotheby’s in New York City on Thursday 5/18/17. The art was sold for just $19,000 in 1984. The staggering sale price for the art equates to a +30% annual rate of return over the 33 years from 1984 to 2017 (source: Sotheby’s).
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