Market Overview

Government Shutdown – 1995 and 2013 – A Comparison - Good Times Bad Times

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The last time the government was shut down, the economy was ripping upward with the DOW Jones returning a whopping 33.45% and unemployment at a low of 5.6 percent which is about as good as it gets. In 1995, the nations' leaders: Speaker Newton "Newt" Leroy Gingrich and President William "Bill" Jefferson “Blythe” Clinton worked together somewhat harmoniously in the best interests of the people and nation. The solutions, prudence, and compromises of the mid-1990's seemed to dramatically augment the global confidence in the American economy.

In 2013, with this new shutdown, it can be argued that the middle-class and working poor are very angry at Washington's elected executives for the present budgetary confusion, waste, cronyism, fiscal negligence. Additionally, people are generally upset with the fact that the government salaries and perks are much greater than what is available in our local communities and suburbs.

Most would agree that real leadership is required at this present time, and that the President and other leaders should continue to seek insights and innovative ideas from all citizens including common sense feedback from working folks. In this difficult economy over the last 5 years, our nations middle class is now demanding fiscal innovation and greater regulatory benefits from this government.

With the present unemployment problems, there is general concern about the condition of: working folks, the middle class, and single parents etc.
However, there is one caveat, and that is the sweet benefits and pay of government jobs. In 2011, federal civilian workers had an average wage of $84,671, according to data from the U.S. Bureau of Economic Analysis. By comparison, the average wage of the nation's 102 million private-sector workers was $53,463. Thus, a good government job is now an extremely coveted position, and recent polls show that 10% of top 100 companies to work for are now federal government agencies and departments.

In the recent news, Former President Jimmy Carter has spoken on the dire condition of the economy and other related research is indicative of our economic and employment problems. A further issue of deep concern are new middle class tax hikes, higher costs of the new health care system for the working middle class, higher costs those with pre-existing conditions, and the lack of disposable income for average Americans.

We can only hope that the leaders in this country can sit down in the coming months and negotiate some solutions and priorities to help those with the highest needs such as: orphans, widows, and those who are sick.

Further, leaders need to find ways to provide some tangible benefits to working people who genuinely want to be productive and contribute to community, society, and humanity.

With the financial crisis issues over the last 5 years, the stagnant economy and unemployment may continue for years to come because of the higher income taxes, new health care taxes, new regulations, and global competition.
Overall, the only way to restore global confidence in the US markets is to show the world that you are willing to spend strategically, lower the barriers for success, and invest strategically using the budgetary process. For example, at the end of the 1995/96 budget negotiations, the world seemd to believe that for the first time in many years, that the leaders were working to solve problems rather than deepen them.

For investors interested in this article, it is always good to consider blue chip investments which represent good growth and income in good and bad economies and are sometimes called Defensive Stocks. Examples are: WalMart (NYSE: WMT) , Gold ETF (NYSE: GLD), PG Proctor and Gamble (NYSE: PG), Dollar General (NYSE: DG), Target (NYSE: TGT), Utilities SPDR (NYSE: XLU) , Pfizer (NYSE: PFE), Walgreens (NYSE: WAG), Microsoft (NASDAQ: MSFT) and other brand names where you spend your money.

Because many countries are growing quickly with demographics and exporting at high levels, it is always good to consider investing a portion of your money in emerging markets such as China, Russia, Brazil, Africa, India, Arabia and South Asia. You can use ETFs to invest in just about any region or nation. Global markets are competitive and many companies and professionals are moving to countries where the corporate and individual income taxes are coming down to reasonable levels.

See Jimmy Carter/USA Today Web MD and Department of Labor http://www.usatoday.com/story/news/nation/2013/10/08/jimmy-carter-middle... and : http://www.webmd.com/health-insurance/20130924/some-say-obamacares--affo... and http://data.bls.gov/timeseries/LNU04000000?years_option=all_years&period...

The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

Posted-In: Politics Economics Markets General

 

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