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Economic Outlook 2011

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!.

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Economic Outlook 2011

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  1. Economic Outlook 2011 Sponsored by: Presented by: TERENCE SHEPHERD

  2. 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?

  3. The Great Recession! After a tough 2 years of hanging on Business Owner’s Are Tired

  4. The Great Recession! But Today… Thoughts shouldn’t just be about “hanging on”!

  5. The Great Recession! With Staggering Unemployment, Struggling World Economy, Massive and Growing Federal Deficits, Pending Federal and State Income Tax Increases . . .

  6. Knowing Your Environment but business owners must understand the environment they face and the magnitude of potential changes in the background. . . .Success is still possible, Growth will continue!!... but businesses should plan on an extended period of slow growth. plan on having less in your pocket after taxes. And, for every dollar you make,

  7. Economic Outlook Decrease In Consumer Spending • 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)

  8. Economic Outlook Less Available $’s to Spend Potentially more expensive goods • 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

  9. Economic Outlook 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

  10. Economic Outlook 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 growth 1950’s 1.35 1970’s 1.67 1990’s 3.12 2000’s 5.57 Carol McMullen Eastern Bank Wealth Management

  11. Economic Outlook 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

  12. Economic Outlook 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

  13. Economic Outlook

  14. Economic Outlook The Answer Ten – 1 = 5 • Cut taxes • Cut spending, but entitlements are off limits • AND • Balance the budget

  15. Economic Outlook To Govern Is To Choose • 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

  16. Economic Outlook Government Deficit Fallout • Reduced Federal Spending • Discretionary • Entitlements • Reduced money to the States • Increased taxes • 29 States raised taxes $24Billion • Federal: some on their way, more may have to follow

  17. Economic Outlook Advice To Business Owners • Don’t wait on a hockey stick recovery • Understand the economic environment you are facing • Formal planning

  18. Economic Outlook Advice To Business Owners • Begin With The End In Mind • Re-energize Your Business

  19. Economic Outlook Advice To Business Owners • Stabilize Your Business • Revisit Your Value Proposition • Strategic Growth Analysis

  20. Closing Thoughts New courses of action are necessary to survive the challenges that lie ahead and prosper. • 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.

  21. Economic Outlook Questions & Answers

  22. Boston Office Terry Carl Joe Shepherd Goldstein Vajda (:(617) 412-4640 *:terry.shepherd@rocg.com carl.goldstein@rocg.com joseph.vajda@rocg.com Start Your Planning Now

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