Two sides to every economy - Part II

In my last editorial, you may recall that I wrote about the fact that economists rarely agree about anything. Harry Truman famously remarked, "Give me a one-handed economist! All my economists say, 'On the one hand...on the other hand.'" Well, things haven't changed much since then. And though you may have read some interesting opinions in my last article, I thought I'd add a few more so that you could see just how divergent the points of view have become these days.

On the one hand

Gov. Butch Otter definitely believes that the recovery has begun. In fact, at The Coeur d'Alene Resort in May, he told hundreds of people attending a luncheon on behalf of Jobs Plus, "The states created the federal government and the created cannot be as strong as the creator. Therefore, as states like Idaho gain economic strength, they-not the federal government-will lead the nation out of this recession."

On the other hand

The Governor's assessment makes a lot of sense. But here's something else to think about: It's almost certain that income tax rates will increase starting on Jan. 1, 2011, when the current tax laws sunset.

Since it is a truism that people change their behavior when incentives and disincentives appear, it's not a large leap to assume that many people who have the ability to bring additional income into 2010 from 2011 might do so-and this might trigger a double-dip recession.

On the third hand

First Trust Chief Economist Brian Wesbury, however, believes that the economy may slow in early 2011 but will probably not double-dip into recession. He compares the coming tax increases in 2011 to the tax increases of 1993. He reported that the first quarter of 1994 showed slow growth, but the rest of 1994 saw the economy move ahead at a normal pace.

We're here to lend a hand

What's the one true answer? There is none. That's why it's critically important that you invest your portfolio in a balanced and strategic manner. So call your financial advisor-and if you don't have one, we at Atchley Financial Group would be happy to help. Should you wish, we could also provide you with a second opinion about your financial portfolio. Our goal has always been to give you the information you need to choose wisely, and help to ultimately enjoy financial independence, realize your dreams, and achieve whatever goals you have for you and your family.

Les Atchley is the founder of Atchley Financial Group, a national wealth management firm headquartered in Coeur d'Alene that specializes in retirement, investment, and estate planning. He and his team of knowledgeable professionals help clients make intelligent decisions with their wealth in order to realize their goals and achieve financial independence. You can contact him directly at 208-664-1900 or learn more about the firm by visiting their website at AtchleyFinancial.com.