What is the Ultimate Price We May Pay for Runaway Federal Spending?

Online, September 30, 2010 (Newswire.com) - Another stimulus package has been suggested by the Obama administration which would include a $50 billion 'up front' investment paired with a long-term framework to renovate and expand America's transportation infrastructure. According to financial advisor Dennis Tubbergen, more borrowing against future production may only compound the excessive debt problem in the U.S.

Tubbergen, who is CEO of USA Wealth Management, LLC, a federally registered investment advisory company, believes excessive debt is the major reason for the economic mess we now find ourselves in and offers his opinions in his economic blog and monthly newsletter Moving Markets. In his September newsletter, Tubbergen asks us to consider the ultimate price Americans may pay as a result of runaway federal spending.

He points to the September 7, 2010 article in the Street which states in 1901 the national debt amounted to $28 for every person living in the United States. But what is today's debt? An incredible $43,507 for every resident.

"Here's the reality," explains Tubbergen. "Much of America's population doesn't have a net worth of $43,507, especially on an individual basis."

According to the article, "Government debt held by the public totaled about $7.6 trillion at the end of Fiscal Year 2009 and is in the form of Treasury securities such as bills, notes and bonds."

Tubbergen goes on to state a 2004 survey by statemaster.com revealed that the average household is made up of 2.5 members. If you take the median net worth of $91,304 per household and divide by 2.5 members per household, the median net worth of an individual is $36,522.

"That means if the U.S. government confiscated the median wealth from each individual, we'd still be in debt!" exclaims Tubbergen. "How will this affect the U.S. government bond market? Short term, given the state of the rest of the world, probably not much. Longer term, look for the possibility of rising yields and falling bond prices."

The opinions expressed herein are those of the writer and not necessarily those of USA Wealth Management, LLC. This update may contain forward-looking statements, including, but not limited to, statements as to future events that involve various risks and uncertainties. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual events or results to differ materially from those that were forecasted. Therefore, no forecast should be construed as a guarantee. Investing in market related securities involves a risk of principal loss. Prior to making any investment decision, individuals should consult a professional to determine the risks, costs, benefits and fees associated with a particular investment. Information obtained from third party resources is believed to be reliable but the accuracy cannot be guaranteed.