Economic and Investment News Bits
- Economist John Mauldin writes about the potential disaster with public pensions, “It’s not as if no one saw the problem coming. Experts have been harping on it for decades. Politicians at all levels of government knew very well that a train wreck was inevitable and still did nothing. In some places, like Illinois, the politicians actually did something worse than nothing: they bought votes with promises of future benefits. Even worse, many states had their pension funds sell bonds, thinking they would be able to profit on the difference.” He goes on to compare the worsening problem of public pensions to what is happening in Greece today.
- According to health care information and technology company IMS Health, total pharmaceutical spending around the globe is expected to reach $1.3 trillion in just three years’ time, in large part due to rising life expectancy. Although the U.S. remains the largest market in the world, China is set to experience the largest spending growth as its population continues to swell and incomes rise.
- Last week, a House Appropriations subcommittee voted to cut funding intended to require bank, insurance, and brokerage salespersons to act as fiduciaries, commenting that forcing the commission industry to act in the clients’ best interests would hurt consumers. Really?
- 21% of the U.S. population participates in one or more of the six different means-tested assistance programs in the country. They are 1) Medicaid, 2) Supplemental Nutrition Assistance Program, aka food stamps, 3) Housing Assistance, 4) Supplemental Security Income (SSI), 5) Temporary Assistance for Needy Families, and 6) General Assistance. (Source: Census Bureau)
- Even with wage growth 4% higher this year, official inflation stands at 1.85%. Lower energy prices are helping to prolong the cycle of below-trend inflation. (Source: Federated Investors)
- Columbus is the Midwest’s fastest-growing city and the country’s 13th, according to the latest annual report from the U.S. Census Bureau. Compare that to St. Louis, which has lost 62% of its population since 1950, Detroit down 61%, Youngstown down 60%, and Cleveland down 56%.
Thought for the week
“The less prudence with which others conduct their affairs, the greater the prudence with which we should conduct our affairs.”
Warren Buffet, American investor (b. 1930)
A Little Perspective
The U.S. economy is the largest single-nation enterprise in the world. Only when all members of the European Union are combined does their total GDP outpace the U.S., and then by just a small amount. It is also very revealing to look at some of the individual state economies and compare them to other countries. California’s GDP is greater than India, Canada, Australia, and Spain. Texas has a greater GDP than all of Mexico. New York’s economy is greater than South Korea and Indonesia. Florida and Pennsylvania’s GDP is ahead of Turkey, Netherlands, Saudi Arabia, and Switzerland. And Ohio’s economy is greater than Iran, Sweden, and Norway.
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