Navigating the money maze of life is not getting any easier for nearly all families across the U.S.A. Most working taxpayers received little or no relief under last year’s “Tax Cut & Jobs Act” except for a slight bump in weekly paychecks and maybe, if lucky, a few extra greenbacks in an annual tax refund.
In some states, taxpayers discovered tax grief, not relief, with the elimination of the state and local tax deduction (SALT), resulting in huge and, in some cases, devastating tax increases. Also, a significant portion of the country had their financial lives completely disrupted, if not totally destroyed by the “Trump Shutdown,” blowing up budgets for paycheck-to-paycheck families across the nation.
Now, “Trump Tariffs” are setting the stage for another budget buster as all major retailers are preparing to hike prices for stuff made in China, or stuff made from Chinese parts. Walmart is going from “Price Rollbacks” to “Price Rollups.” The best estimates, as of this writing, is the “Trump Tariff” will cost working families an average of an extra $800 per year — not small potatoes for the vast majority of families including the employed, unemployed, deployed and retired.
Now, looming on the horizon is the loss of health insurance for millions of Americans with the destruction of “Obama Care” for a yet to be dreamed-up “Trump Care.” Adding salt to the wound is rampant rising prescription drug prices.
The possibility of rising fuel costs also looms due to war talk, or possible action. And, interest rates could increase if the economy remains strong.
Furthermore, let’s not even discuss investing or politics, as uncertainty has clearly taken over both. The economic recovery will likely run out-of-steam within the next two years, based on historical patterns. Most investors know what goes up will eventually come down, but this time a prolonged recovery might result in a prolonged recession.
Nevertheless, after a crappy economic start in the first three months of 2019, U.S. consumer confidence showed signs of rebirth in April. For the short-term, consumers see a strong economy into the summer and the fall with solid job and business growth, but 2020 is another question. Recent surveys indicate the April bump is still a good sign but remains below year-ago levels. Some surveys are pointing to weakening car loans in the U.S. (as well as the U.K.) and consumers unwillingness to buy big ticket items as ominous signs.