Within his first 30 days of taking office, President Barack Obama signed the American Recovery and Reinvestment Act of 2009 into law, on February 17, 2009. The $787 billion stimulus package was intended to provide a boost to the U.S. economy in the wake of the economic downturn and was predicted to save or create 3.5 million jobs.
The Act included federal tax cuts, expansion of unemployment benefits and other social welfare provisions, in addition to domestic spending in education, health care and infrastructure.
Yet the slide continues
During the first three months of 2009, the Standard & Poor’s 500 Index saw record-setting declines. In addition to market deterioration, the economy is still experiencing a rise in unemployment, foreclosures, credit card defaults and ongoing bank troubles.
President Obama and other economists think the biggest sign of success will stem from an improvement in the unemployment rate, with the understanding that if people are employed, they will have the confidence to make purchases and investments.
Now, more than ever, is the perfect time to call upon our elected officials at all levels — local, state, county and federal — to work together to put our financial affairs in order. It’s imperative for elected officials to reduce the debt that will now be given to the next generation as a result of the legislation — an estimated $350 billion in interest alone over 10 years. Don’t we want to ensure that the next generation will be able to live the lifestyle to which they are accustomed?
Everyone must understand the staggering cost of entitlements such as Medicare; health care costs continue to grow at unsustainable rates and at a time when families are least able to pay for it. As financial professionals we know all too well Medicare does not cover all medical expenses or the cost of most long term care. Because of this, we must stress to our clients the importance of taking responsibility for their long term care needs. Purchasing long term care insurance ensures individuals receive the care they need — whether at home or in a nursing home — minimizing the negative effect of a spouse or family members.
As the Act takes effect, I encourage you to implement these suggestions with those in your communities. As trusted financial advisors, we will make a positive difference in the lives of our clients.