Lorence & Vander Zwart is a wealth management firm located in beautiful downtown Holland, Michigan. LVZ is a registered investment advisory firm managing wealth for individuals, trust, corporations and retirement plans.
As a third party money manager, LVZ provides the ability for advisors and client’s to customize and control their investment portfolios on a wide range of investment platforms.
Major headwinds continue to impact the economy. The potential for significant weakness in Europe and China along with destructive regulatory policies in the US have prevented a strong recovery.
However, even in the midst of the Great Depression, pouring money into the economy produced major gains in real growth and jobs. This is what happened from 1933 to 1937. In the midst of the Great Depression spending and growth averaged increases of roughly 10% a year. The unemployment rate went from 25% in 1933 to 14% in 1937. The turnaround occurred when Fed policy turned from highly restrictive to highly expansive.
Hence, Fed policy can create what appears to be a recovery in spite of serious negative forces. This past year the Fed increased bank reserves by more than 20%. This compares to an average annual increase of only 6% the prior two years. So far problems in the banking system have muted the impact this policy has had on the pace of spending.
Gingrich’s New Contract—Great News!
Gingrich’s 21st Century Contract with American represents a detailed framework of plans for transforming the US economy. If adopted, there would be a greater shift in US economic policies in the direction of classical principles than at any time in modern history.
For starters, the Contract proposes to eliminate the tax on capital gains, reduce the individual tax rate to an optional maximum of 15%, lower the corporate tax rate to 12.5% and eliminate the death tax.
