The MHEDA Journal - Second Quarter, 2013 - (Page 24)
The Next Economic Cycle
With the proper precautions, the
looming recession could be a
non-event for MHEDA members.
BY ALAN BEAULIEU
T
hough many people are still feeling the effects of the
latest recession, the U.S. economy has actually been
on an upswing since the second half of 2009. That
recession was the worst of our lifetime, with a 14.5
percent year-over-year decline in the quarterly U.S. Industrial
Production figures. Recovery has been slow, but steady. However,
though it seems like just yesterday, we are actually poised to
enter another recessionary period starting in the latter stages of
2013 and extending through 2014.
With the “Great Recession” so fresh
in our minds, the prospect of another
recession seems daunting. But this
coming recession will be much milder,
with a projected 3 percent year-overyear decline. In fact, with the proper
planning and precautions, this can
be almost thought of as a non-event.
To understand how to prepare for a
recession, however, we must examine
its root causes.
Contributing Factors
In the 2nd Quarter 2012 issue of
The MHEDA Journal, we wrote, “I
will be keeping a close eye on the
Congressional elections, because those
are the races that will have a longterm impact on the economy. To me,
24
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it’s all about who controls the Senate
after November 1. I am looking for
a strong fiscally conservative majority. A veto-proof Congress of fiscal
conservatives should give distributors
encouragement going forward. While
it may not affect 2012, a lack of fiscal
conservatives would leave us at ITR
feeling further deflated about 2013
and 2014.”
Suffice it to say, it didn’t break that
way. Congress looks remarkably like
it did before the 2012 elections, which
could signal more gridlock and, worst
of all, more regulation.
Taxes
The dawn of 2013 saw us faced with
the “fiscal cliff” debate, which ended
quickly with a deal struck on January 2.
While the potential impact of going
over the fiscal cliff was wildly overblown by the media, the compromise
will have some impact on businesses.
Taxes were raised significantly, slight
spending cuts were agreed upon, and
the can was kicked down the road for
two months on more talks on spending
cuts regarding the debt ceiling.
There are three good things to
come out of the discussions. One, the
increased taxes will be applicable
to households making $450,000 as
opposed to the originally proposed
$250,000. In addition, the dividends
and capital gains tax increases are
gentler than would have occurred
without the bipartisan agreement.
Lastly, the dreaded Alternative
Minimum Tax annual problem looks
to have been successfully handled,
saving a potential 20 million households from a sharply higher tax bill on
2012 income. The AMT should not be
an issue in the coming years because
of the pending legislation.
Health Care
With President Obama winning
re-election and Democrats retaining
control of the Senate, any prospect
of repealing the Affordable Care Act,
or “Obamacare,” is gone. It is the law
of the land. And this health care law
is an added expense for businesses.
The Supreme Court ruled that it was a
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Table of Contents for the Digital Edition of The MHEDA Journal - Second Quarter, 2013
President’s Perspective
From the Desk of Liz Richards
Ask Your Board
MHEDA Member Profile
At Work
The Next Economic Cycle
In Case of Emergency – Disaster-Proofing Your Supply Chain
Annual Convention
Convention Program
Exhibitors' Showcase Floor plan
Absorption Measures Performance and Sustainability
Exhibitors’ Showcase Product Guide
The Parachute Congress Made
Get Your Game On
An Expert, Advisor, Resource and Single Point of Contact
What Looks Good on Paper
Instilling Work Ethic in the Emerging Workforce
How to Get People to Do What You Want Them to Do
Search Engine Marketing Value Proposition
New Members
Spotlight on Association News
MHEDA University Calendar
MHEDA Milestones
New Products
Index of Advertisers by Product Category
The MHEDA Journal - Second Quarter, 2013
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