Grand Rapids, MI (PressExposure) May 12, 2009 -- The U.S. House of Representatives just recently approved a $3.5 trillion budget - the largest budget in U.S. history. The new budget also establishes the largest deficit in the nation's history, at $1.2 trillion, according to an April 30 Wall Street Journal report.
Dennis Tubbergen reviews and analyzes our nation's latest deficit mark on his financial services blog, http://www.dennistubbergen.com, and specifically focuses on its impact on investors. "We're in a hole and trying to get out by digging deeper," according to Tubbergen.
The national debt clock is approaching $11.2 trillion, according to The Metro Daily News in an article published on April 27.
If you take that current debt figure and pile on the $1.2 trillion from the present budget, the U.S. could be facing a national debt of $12.4 trillion just one year from now.
There is no light at the end of this tunnel. The Democrats in Congress who voted in favor of the current budget vowed the deficit would be cut in half within five years, despite the fact the current budget proposes new entitlements and social programs, according to the same Wall Street Journal article cited earlier.
Also outlined in the article, there was a provision known as 'reconciliation' inserted into the budget by Democrats that would enable the Senate to approve a health-care overhaul with just 51 votes, as opposed to the 60 votes normally required.
In Tubbergen's view, it's simply a matter of time before nationalized healthcare is at our doorstep. Considering the present financial state of Medicare and Social Security, Tubbergen is not enthusiastic about the prospect of such a program.
Tubbergen explains his method for calculating the deficit's effect:
The U.S. Census Bureau reports a U.S. population of 304 million, so a $3.5 trillion budget means there is $11,600 available to spend annually for every man, woman and child in the country. This also equates to about $31,818 per household as there are about 110 million households in the U.S. The median household income in 2007 was $50,233 per the U.S. Census Bureau.
Now what might those figures mean to you and your wealth? Earlier this year, Tubbergen released a market update where he forecast that the U.S. dollar may lose value eventually and interest rates may increase. Historically safe investments, such as the U.S. dollar and U.S. Government Bonds are therefore likely to lose value, and possibly be a great deal.
A free copy of Tubbergen's market update can be obtained at: http://www.usawealthmanagement.com.