There is a lot of hype on TV and in the news from people who have no knowledge about the economics involved and the timing and gravity of the situation. It makes good headlines and captivates audiences but it really doesn't amount to much. It is not even a slippery slope said Victor Weintraub, noted economist and President of First Charter Financial Corporation.
Scottsdale, AZ -- (SBWIRE) -- 12/13/2012 -- The two major components of the “Cliff” are first the expiration of the Bush tax cuts. This will result in a tax increase, more on upper income people, and an increase of the marginal tax rate. The other major component is the “Sequester”. This will result in cuts to defense spending and to some entitlement programs. The other components are the expiration of extended unemployment insurance and the end of temporary payroll tax cuts. You must recognize that when President Clinton raiser taxes unemployment went down from 7% to 4%, the economy expanded rapidly and the budget went from a deficit to a surplus. Earlier this year I published a study that establishes a positive correlation between increased taxes with an increased marginal tax rate and an expanding economy and declining unemployment. Contrary to what a lot of commentators and politicians say, increasing taxes and especially the marginal rate will stimulate the economy and reduce the deficit. Do not fear a tax increase.
The “Sequester” will cut the defense budget. It is way out of a rational relationship with our economy and our defense needs and should be cut to balance the budget. So far as social and entitlement program cuts, I do not think that will really last.
It appears to me at this time that there will not be any agreement in Washington. I expect that we will go over the “Cliff”. When the new Congress takes over in January, then we will see some adjustment of middle class taxes, some restoration of entitlements and a spreading out of defense cut. We will have turned the corner toward restoration of our economy and a boost to the middle class.
First Charter Financial Corporation is in the business of advising our clients on their financing needs and placing Commercial Real Estate Financing for them. It is my opinion that we will see continued but slow improvement to the economy. This will be reflected in improved occupancy and leasing activity. I expect to see interest rates remain very low and that the availability of funds for commercial mortgages will remain liquid. From a historic standpoint this is a very advantageous time to finance property and to lock up rates for as long as possible.
First Charter Financial Corporation is a leading independent mortgage company conducting business on a nation wide basis. We specialize in arranging financing for commercial propertied throughout the US. The projects that we handle include office, retail, multifamily, hospitality and specialty properties. We arrange loans in amounts ranging from a minimum of one million dollars up to as large as 100 million dollars. We maintain relationships with large and small insurance companies, retirement and investment funds, regional, national and multinational banks and we are very active with capital markets funding sources. Victor Weintraub is the President of First Charter Financial and has been in the business for over forty years. Contact First Charter Financial with your commercial mortgage needs and concerns. 480 970 0990. Email Info@fcfcorporation.com