The 2010 Year In Money
By David Dierking
As we get to the end of the year, it seems like now might be as good a time as any to review some of the major events that shaped our financial lives in 2010. While most of the news of the year seemed to be doom and gloom there were a few bright spots along the way too that helped balance out the overall picture.
Let’s take a look back at some of the more important financial events of 2010…
Economic Recovery Still Stalled/Unemployment Still Hovers Around 10%
Despite a plethora of economic stimulus from Washington, a broad-based recovery featuring increased corporate spending and job creation has yet to really happen. The nation’s unemployment rate has hovered above the 9.5% area all year long and has increased to 9.8% in November. For the foreseeable future, the unemployment rate is forecasted to stay at a high level. The Fed continues to keep interest rates at near zero and has indicated that they will stay there until things start moving again.
Greece Teeters on the Verge of Bankruptcy
In April, the Greek government requested an emergency bailout from the European Union in response to a national debt rapidly spiraling out of control. They got it to the tune of over $60 billion but it didn’t come without consequences. There was widespread protest and rioting in the capital city of Athens that left three people dead and the nation’s debt rating was to cut to junk status by S&P following the bailout. The Greek budget deficit crisis remains unresolved.
Congress Passes Wall Street Reform
Washington was bound to step in to address some of the issues that resulted in the current economic recession but there’s deep disagreement as to whether or not this is the answer. This summer, the Dodd-Frank Wall Street Reform bill passed through Congress and aimed to add protect consumers from being taken advantage of by lenders and getting slammed with unnecessary fees. Consumer protection is a good thing but how effective this will be in the long term remains to be seen.
Congress Passes Health Care Reform
This bill ended up being almost entirely a Democrat vs. Republican issue. Some of the features that come with the bill such as eliminating co-pays for minor procedures like blood pressure checks and expanding the period where young adults can stay on their parents’ insurance sound good but the ultimate argument again comes down to who’s going to pay for it and how much will it cost.
Congress Extends the Bush Tax Cuts
A lot going on in Congress this year, especially in the lame duck session! This is just a recent development as the Obama administration reached a compromise to extend the Bush tax cuts into 2011. This will mean more money stays in taxpayer hands (low capital gain taxes, payroll tax holiday, etc.) but the longer term issue again could be cost. The tax cut could push the deficit further north and the 2% Social Security payroll tax cut, while putting money back into your pockets in 2011, could speed up the future insolvency of the retirement program.
Housing Market Starts to Stabilize
This isn’t to say that housing prices are starting to go up. They just look like they’re beginning to finally bottom out. Exceptions exist though. Some of the high flying markets still have room to correct and some markets are already seeing price increases but the days of the national real estate freefall look like they could finally be moving behind us.
Looking forward to 2011, do you think we will be better off?
Photo credit: Gnerk
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