Watley Group CEO John Bryan understands the ramifications of the economy on U.S. businesses. The Watley Group has successfully been involved with the restructuring of numerous companies including Chrysler, FedEx and Enron. John Bryan holds the position of CEO of several companies including Copper King, of which Josh Romney was an investor. According to Bryan, whether Tuesday’s election brings an Obama or Romney presidency, the state of the union will be impacted.
By the end of 2011, the U.S. government had over $65 trillion of debt and liabilities in four categories: the U.S. debt totaled 15.6 trillion(1), 7.9 trillion in liabilities for federal employee retirement(2), 18.8 trillion for unfunded social security benefits(3) and 24.4 trillion in liabilities for unfunded Medicare costs(4).
Bryan explained, “No matter who wins the election the U.S. balance sheet will stand in the way of new government spending, big new tax breaks or other stimulus measures that presidents often use to influence economic trends.” Bryan feels that Romney’s plan to reduce regulations promotes job growth, “Governor Romney has an advantage by reducing regulations on small businesses in the hopes of stimulating private-sector investment and job creation along with reducing the top corporate tax rate to 25% from 35%. President Obama may seek to lower corporate tax rates to 28% and eliminate tax incentives for companies that send jobs overseas.”
Bryan stated, “No matter what your income, the number one issue is taxes. Bush-era tax cuts from the early 2000s are due to expire at the end of 2012, which could mean higher taxes on income. And, a temporary cut in the Social Security payroll tax is due to expire. If Romney is elected, the current income tax cuts will be extended for several more years. Democrats have pushed for higher taxes on higher earners to help close the gap, but the extension would still occur. Romney’s goal is to cut individual income tax rates including the top rate from 35% to 28%. Obama would keep the Bush-era tax cuts for at least one more year, if reelected, and taxes on high earners would increase.”
The failure of bipartisan congressional committees to agree on a deficit-reduction deal earlier this year means that billions of dollars in automatic spending cuts on defense and social services programs are scheduled to start in 2013. The Congressional Budget Office estimates that the economy would shrink by 1.3% in the first half of next year and push the country back into recession.
Bryan further explained, “From a policy perspective, the two parties are in a gridlock and any advantage of either candidate has the potential of being lost. However, the outcome of this election will still have a major impact on the outlook for the restructuring of the U.S. economy outside party platforms and policies. Obama has stated clearly that ‘in this country, broad based prosperity has never trickled down from the success of a wealthy few.’ He has run his campaign against the richest ‘20%’ of Americans. Obama believes that the other 80% are not dependent on the richest 20% for their prosperity. He believes that the U.S. can provide enough stimuli and a safety net of social programs to insulate from any dependence on the richest 20%. Romney, on the other hand, believes the 20% is vital to U.S. growth and he firmly believes in trickle down. In short, Romney wants to give the Chinese a run for their money.”
Bryan explained further, “The U.S. government spent $6.1 trillion in 2011 – so Obama has some clout. However, the richest 20% own $46 trillion dollars of wealth. This dwarfs the U.S. government in terms of investment, income creation, and spending. The bottom line is if Obama wins your vote, your job is insulated from the richest 20% and if Romney wins your vote, your job depends on the wealth of the richest 20%.”
1. Source: http://www.treasurydirect.gov/NP/BPDLogin?application=np
2. Source: http://www.gao.gov/financial/fy2011/11frusg.pdf
3. Source: http://www.ssa.gov/oact/tr/2011/tr2011.pdf
4. Source: https://www.cms.gov/reportstrustfunds/downloads/tr2011.pdf