We reached our debt spending limit last week and hopefully have enough money to pay our current debts (not new ones). Congress has approximately until June to be able to raise our debt limit; otherwise, the U.S. will be in default on our obligations to pay our bills — an event that has never occurred.
In 2011, when similar issues arose, the credit-rating agency, Standard & Poor’s downgraded the credit rating of the U.S. government for the first time in its history, although Moody’s and Fitch kept the higher AAA ratings because they felt we were headed in the right direction but were very concerned about our future debt.
Unfortunately, at this point in time, the Republicans are refusing to increase our debt limit unless there are considerable reductions in Social Security, Medicare, Medicaid and other appropriations and budget considerations already in effect. But what about the military, which they are always in favor of increasing? As one of his concessions to becoming speaker of the House, Kevin McCarthy agreed to a 10-year spending limit for the military based on its 2022 budget that could lead to a 10% decrease in funding. The GOP also wanted to defund the IRS by $80 billion.
The Democrats including President Biden say social benefits are off the table and are totally against this action. So for now they are at an impasse and nothing will get accomplished even though they have some time to figure out an agreement. Most will go about their daily lives not truly understanding what will happen unless the full Congress authorizes the increase in our national debt limit.
In 2023 consumer spending will surely decrease with the continued effects of inflation, layoffs, lost businesses, and high-interest rates. Although local real estate has done fairly well with the current demand during these inflationary times, the lag effect and the time it takes for a greater shock haven’t been totally felt just yet. Unless rates come down and inventory increases, the impact on reduced sales will be felt, especially as demand decreases when individuals and families (millennials and Gen Zs) become less serious about buying and either stay where they are, go into affordable rentals, or leave NYS altogether.
Baby Boomers are also exiting to reduce their expenses, too. Last year New York State had a net loss of 180,000 people, the highest in the U.S., fleeing to less costly states, such as Florida and Texas, which had the greatest influx as well as Idaho, South Carolina, and South Dakota gaining population, too.
Things will continue to digress this year unless there is a pivot in rates, which isn’t necessarily in the cards at the moment, where the scope and intensity of the recession is still unknown. However, I believe the No. 1 advantage that many Long Island communities possess that keeps and enables those who can truly afford to stay is top-notch and highly ranked school districts. Other benefits are the cultural diversity, scenic beaches, and camping, hiking trails, and green spaces. Here are links to many more reasons why to live or move to Long Island.
In order to keep more people from leaving, Democratic Gov. Hochul has recently proposed 800,000 additional units for middle-income individuals and families as well as lower-income qualified in and around New York City and especially on Long Island. To get this accomplished, usurping as needed local restrictive housing zoning regulations will be necessary.
Long Island Republicans have come out against this potential action, saying there are better ways to accomplish this ever-pressing situation. If so, I would like to know and look forward to when I can read or hear their plans as to what they would be considering as time is of the essence in our continuing dilemma of lack of housing. This would hopefully stem the tide of those leaving the area.
The span from 2023 to 2025 will be pivotal years for housing and we need our answers today and not sometime in the future when it just may be too late for New York and Long Island.
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Philip A. Raices is the owner/Broker of Turn Key Real Estate at 3 Grace Ave Suite 180 in Great Neck. He has 40 years of experience in the Real Estate industry and has earned designations as a Graduate of the Realtor Institute (G.R.I.) and also as a Certified International Property Specialist (C.I.P.S) as well as the new “Green Industry” Certification for eco-friendly construction and upgrades. For a “FREE” 15-minute consultation, value analysis of your home, or to answer any of your questions or concerns he can be reached by cell: (516) 647-4289 or by email: [email protected] or via https://WWW.Li-RealEstate.Com