A big part of personal financial planning is controlling your debt and expenses so that you can accumulate more wealth. It’s the first and most basic principle of financial independence and personal financial planning. If you want to be financially free to do all the things you eventually will want to do, you’ve got to pay off your debts and build up a nice nest egg. Everybody knows that, right? Everyone except for our government, it seems.
Today Washington announced that the U.S. will run a $9 trillion defecit over the next 10 years, $2 trillion more than it had forcasted earlier this year. That’s a 28% increase in their estimate of a few short months ago! Washington also predicted that our nations unemployment rate will rise to over 10% for a period of months and quarters sometime in the next year and a half. Right now the jobless rate is at about 9.3%, so they expect it to climb somewhat higher.
While it is quite normal to let government spending balloon during economic recessions (in order to help stimulate the economy) these numbers are far greater than we’ve ever seen in our country’s history. And it looks like it could take a while to climb out of this hole we’re in. One major contributor to our huge deficit is the amount Medicare is spending each year for health care. This administration hopes to help slow down Medicare spending with its health care overhaul, but many are concerned about the effects it may have on the quality or availability of health care that they recieve. Cuts to Medicare means that doctors who care for Medicare patients will get paid less, or fewer proceedures will be covered. This will cause doctors to no longer want to treat Medicare patients, and/or cause the patients to have to pay for more things out of pocket. Many seniors are worried that they won’t be able to afford the care that they will need. This is going to make having a good Medicare Supplement policy even more important.
To read more about this go to the Wall Street Journal online.
If you haven’t changed your spending and saving habits already, now is a great time to start. Since it could be a number of quarters before we start to see the unemployment numbers start to improve, we all need to be putting away some extra cash for a rainy day (or an unemployed day). While spending less isn’t going to help stimulate the economy, we need to all worry more about taking care of ourselves and our families. Our government is doing a fine job of spending plenty of money.