Economic Outlook 2011
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1 Economic Outlook 2011 Sponsored by: Presented by: TERENCE SHEPHERD
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Economic Outlook 2011. Sponsored by:. Presented by: TERENCE SHEPHERD. Economic Outlook. What does the current environment and economic outlook mean to business owners?. And what should they be doing to move forward in 2011 and beyond?. The Great Recession!. - PowerPoint PPT Presentation
Transcript of Economic Outlook 2011
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Economic Outlook 2011
Sponsored by:
Presented by:
TERENCE SHEPHERD
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Economic Outlook
What does the current environment and economic outlook mean to
business owners? And what should they be doing to move forward in 2011 and beyond?
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The Great Recession!
After a tough 2 years of hanging on
Business Owner’s Are Tired
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The Great Recession!
Thoughts shouldn’t just be about “hanging on”!
But Today…
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The Great Recession!
With Staggering Unemployment, Struggling World Economy,
Massive and Growing Federal Deficits, Pending Federal and State Income
Tax Increases . . .
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Knowing Your Environment
And, for every dollar you make,
Growth will continue!!...but businesses should plan on an extended period of slow growth.
. . .Success is still possible,but business owners must understand the environment they face and the magnitude of potential changes in the background.
plan on having less in your pocket after taxes.
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• Consumers account for 70% of economic activity
• Consumers are paying down debt and not spending as much
• September 2010 consumers saved 5.3% (5.6%
in August) of disposable income; before recession 2.1%
• End of September 2010 – 14.8M received unemployment benefits (including extended benefit rolls of 6.1M)
• 5 more years before employment around the world rebounds to before the financial crisis (International Labor Organization-Annual Report)
Decrease In Consumer Spending
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• China’s low cost of goods• Obama presses China to let currency
rise (currency experts advise undervalued by 20% to 25%) (NY Times 9/24/10)
• Congressional action – punitive tariffs
Potentially more expensive goods
Economic Outlook
Less Available $’s to Spend
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Less Government Spending – The Age of Scarcity
For the past 7 decades, in both foreign affairs and domestic policy our defining
watch word was “more”…in the 2nd decade of the 21st century and beyond
it will be “less”.Thomas Friedman
NY Times 9/5/10
Frugal Superpower
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Less Government Spending – The Age of Scarcity
Standard remedy for fighting recessions (deficit spending) losing effectiveness
Diminishing marginal effect of debt on growth ratio of debt growth to GDP
growth1950’s 1.351970’s 1.671990’s 3.122000’s 5.57
Carol McMullen
Eastern Bank Wealth Management
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Less Government Spending – The Age of Scarcity
“China and other countries will not lend to the U.S. indefinitely and
without limit. Americans will have to consume less.”
Michael Mandelbaum
The Frugal Superpower, America’s Global
Leadership in a Cash-Stripped Era
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Less Government Spending – The Age of Scarcity
• National debt $13.4 Trillion• War financing• Aging baby boomers will rise the costs of
social security and Medicare rapidly• Rising health care costs (including health insurance)
• 2009 annual deficit $1.4 Trillion (10% of economy; 3% considered maximum safe amount)
• 2010 Projected deficit $1.6 Trillion• Annual deficit projected for next decade of
over $1 Trillion each year
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The Answer
Ten – 1 = 5• Cut taxes• Cut spending, but entitlements are off
limitsAND• Balance the budget
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• It is about fiscal responsibility.• It is not a failure of understanding or
foresight. It is a failure of political will.
• Borrowed money…simply postpones the day of reckoning and increases the price that has to be paid when that day arrives.
Michael Mandelbaum
The Frugal Superpower, America’s Global
Leadership in a Cash-Stripped Era
To Govern Is To Choose
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• Reduced Federal Spending• Discretionary• Entitlements
• Reduced money to the States• Increased taxes• 29 States raised taxes
$24Billion• Federal:
Government Deficit Fallout
Economic Outlook
some on their way,more may have to follow
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Economic Outlook
• Don’t wait on a hockey stick recovery
• Understand the economic environment you are facing
• Formal planning
Advice To Business Owners
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Economic Outlook
• Begin With The End In Mind
• Re-energize Your Business
Advice To Business Owners
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Economic Outlook
• Stabilize Your Business• Revisit Your Value
Proposition• Strategic Growth Analysis
Advice To Business Owners
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Closing Thoughts
It is those businesses that properly plan and execute that:
• will drive profitability and growth,
• help command maximum business value upon sale and;
• protect and grow their wealth to live the lifestyles they choose.
New courses of action are necessary to survive the challenges that lie ahead and prosper.
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Questions & Answers
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Boston Office
Start Your Planning Now
Terry Carl JoeShepherd Goldstein Vajda
: (617) 412-4640
