What do all three have in common? (Hint: it's not classical architecture) The answer, sadly, is debt. Not just debt but growing debt. And possibly debt that is growing unsustainably. Worldwide, the Greek debt crisis has garnered headlines for threatening to sink the Euro as a common currency. Athens has stacked up public debt to fund its out of control obligations for reckless spending, particularly for public employee pensions. Sound familiar? In Albany both Democrats and Republicans have for years increased spending with an eye toward securing votes from public-sector unions. Of course, Albany doesn't issue its own currency, so debt levels may hurt NY's ability to borrow money but shouldn't have a global impact on our standard of living.
But Washington controls the printing press, and the public-spending bacchanalia of the current administration has had bond ratings agencies talking about a downgrade for the US Treasury. In plain English: the US could lose its AAA rating and become, in effect, a sub-prime borrower. And by the "US" I mean "us" - you and me and everyone who pays taxes here.
This thought came to me over the weekend. Every day I talk with clients seeking personal finance guidance. For those who have mortgage or other debt, part of our conversation involves tactics to reduce and ultimately pay off their debt as the prudent course to financial comfort. It is sound advice but hardly remarkable. Prudent people already know that debt = servitude.
Are there prudent people in Athens, Albany, or Washington?
(This article contains the current opinions of the author but not necessarily those of Brighton Securities Corp. The author's opinions are subject to change without notice. This blog post is for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. References to specific securities and their issuers are for illustrative purposes only and are not intended and should not be interpreted as recommendations to purchase or sell such securities).