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Terry Savage Tells Washington to Stop Scaring America!
February 28, 2013
Investors are facing a political March Madness that will likely end in a disappointing deadlock if Congress doesn’t “start talking about a serious deal that includes the entire budget,” writes my friend Terry Savage in a recent email. The U.S. government is continually at an impasse over a spending cut of only $85 billion. Few would doubt that the figure is enormous, however, it is “just 2 percent of our $3.6 trillion in annual Federal spending. Every American family with a job has just taken a 2 percent cut—as payroll taxes rose in January. We survived—and Congress can too,” she writes.
Terry and I have known each other for years. She is financially savvy, dynamic, and incredibly versant on personal finance, the markets and the economy. She is also the author of The Savage Truth on Money, which was named one of the ten best money books of the year on Amazon.
According to recent data from the Pew Research Center, trust in government has sunk to a historic low: Over the last seven years, only 3 out of 10 Americans said they trust Washington to do the right thing always or most of the time.
The opinion holds across partisan lines, although more Democrats than Republicans say they trust government most of the time. Historically, the party in control of the White House receives a stronger conviction from its supporters, yet “partisan differences in trust in government have been much wider during the Bush and Obama administrations than during previous administrations,” says Pew Research.
This sense of distrust doesn’t appear to be getting through to Washington. “As reality sets in that there might be some limits to our ability to borrow and spend, Washington is insulting the American people with stories of impending collapse of government services because they need to cut 2 percent from their increased spending,” says Terry.
As Americans, you can voice your opinion by sending a message to your representative; as investors, you can manage your expectations and anticipate the volatility that will likely occur as politicians keep up their “March Madness.”
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