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The U.S. Economy Will Struggle Until Sacrifices Are Made - Winston Rowe & Associates
Many American’s are dismayed by our high deficits, but they are quite vague about at government services they are willing to reduce or give up. 248-246-2243.
Winston Rowe & Associates, a national no advance fee commercial real estate finance and advisory firm has prepared this article to address fundamental economic issues concerning the future of U.S. economy and commercial real estate.
Readers, who would like to learn more about Winston Rowe & Associates, can contact them at 248-246-2243 or visit them on line at http://www.winstonrowe.com
Not In My Back Yard (NIMBY):
Many American’s are dismayed by our high deficits, but they are quite vague about at government services they are willing to reduce or give up. At the same time most American’s have a not in my back yard (NIMBY) mentality and aren't willing to cut back on any programs that benefit them.
The elderly want to maintain and increase all their benefits from Social Security, Medicare, and Medicaid. American car owners want to keep their gas-guzzling cars and get better roads, but they oppose any increase in today's inadequate gas taxes.
American homeowners get more than twice as large a subsidy in tax savings than the federal government spends on all housing programs that benefit lower-income households combined.
It would be fairer to use tax credits for homeowner benefits instead of deductions from taxable income. Then every owner would get the same benefit per dollar spent on interest.
Currently the wealthiest owners get much bigger gains per dollar. Yet home builders, realtors, mortgage lenders, and banks oppose any changes in homeowner tax benefits.
In commercial markets, the federal government provides tax subsidies to developers who build affordable housing and road systems that attract home seekers into new suburban areas.
However, these benefits have been greatly reduced by declines in government revenues.
We Are Ripe For A Foreign Take Over Of Our Banking System:
Unfortunately, most political and business leaders are not willing to be honest with the public and the public needs to honest with themselves. The United States is a democratic republic, hence we did elect (hire) these people to run our States and Federal Government.
What should we do about this worsening situation? First, we should start telling the truth and demand that our political leaders do the same. Yet the truth is not always pleasing to hear. That the United States is going broke and is ripe for a foreign takeover of our global financial sector, which is the true power of our Republic. Currently, China is buying our banks.
Consider the reaction to Washington’s Blue Ribbon Panel recent deficit reduction findings, which proposed a detailed plan for cutting both budget deficits and the nation's total debt. Nearly every elected politician has objected to its findings because they impose costs on some programs that benefit politicians.
No politician currently in office really wants to reduce our budget deficits and debt in the painful ways that would aid our long-term growth and prosperity. They know that they will either get recalled or not win another term, because we are a nation of NIMBY’s.
Get Ready For National Lower Standards of Living:
In order to escape from our situation of ever-rising debt to pay for consuming more than we earn, most Americans will have to adjust to lower living standards than we got used to from the mid-1990s through 2007. We should not maintain consumer spending at 70% of gross domestic product, but go back to about 60% to 62%.
That means spending more on investment and less on consumption, and changing our tax system to favor investment over consumption. This message isn't something most elected officials and voters want to hear.
Another truth we must face is that real estate is not going to recover from its weak condition for several more years or decades to come. Housing is going to remain a drag on all property markets as long as unemployment and foreclosures remain high.
Loans on many commercial properties cannot be repaid without a large infusion of equity, which will not be easily forthcoming. Hence commercial foreclosures will increase substantially.
It is in the best interests of our industry to confront the basic problems facing not only real estate, but also the very nature of the American economy. That means facing up to many unpleasant and challenging truths we have been avoiding for a long time — especially living beyond our means by constantly borrowing from abroad.
Winston Rowe & Associates has an excellent knowledge based investor resource for commercial real estate valuation and market analysis located at:
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