Economic Recovery? We Need It Now! This Just Makes Sense!
Economic recovery? We need it now! This just makes sense!
If you think we need economic recovery now, stand up, raise your hand, send this everyone you know and call your congressional representative...now!
What I am about to share with you is not the most interesting topic in the world today...all deference given to Mr. Sheen. It just makes sense! The kind of sense that our father's have been trying to teach us all our life! And it has been tested and it has worked!!!!
It is called ACRS which stands for accelerated cost recovery system, which is a fancy term for accelerated depreciation, which can be seen as a fancy term or method for income tax shelter.
You are probably asking yourself...why am I still reading this? Because it works and it has been proven to work in the past! So keep reading!
Let's go back in history to a time when we had skyrocketing gas prices and inflation was beginning to rear its ugly head at the grocery store where the price of everyday staples like milk, eggs and cereal were racing upward radically....yes I am talking about the past but it seems eerily similar to today doesn't it? The time was the mid to late 1970's and instead of doing anything about the problem we just let it get completely out of control!
In comes a new President, new administration and newly elected congress with a mandate from the American people: Economic Recovery Now! Sound familiar? The newly elected powers that be passed the Economic Recovery Tax Act of 1981 and in it among other incentives was ACRS.
Now, buyers of commercial real estate, residential and non-residential could take the cost of the real estate improvement, the building not the land, and they could elect to receive that depreciation over then next seven years. This created what we need now, demand for our commercial real estate! Along with a capital gains tax cut, owners were able to sell and then buy into this new tax structure. Soon, there were limited partnerships that individual investors could buy into that not only gave them the advantage of a terrific investment, but a great opportunity to shelter some of their income from taxes. Thus, freeing up more capital for reinvestment, i.e., JOBS!
What impact did this have on our economy? The single greatest economic expansion we have ever seen in this nation!
Why? Because our real estate in this country was in demand again, it became worth more and banks became confident enough in the direction of the economy that they started to lend again.
Think about this for a second, because it just makes sense!
What is the key to economic recovery? Jobs!
Who is the number one employer in the United States? According to number of studies, small business!
Who owns commercial real estate, both residential and non-residential? Small business owners.
Who are the lenders not lending to right now? Small businesses.
Why? They have no real estate holdings with sufficient equity and the banks lack core confidence in this economy.
What is happening now to commercial real estate? It is imploding.
Why? Lack of demand and ultimately lack of available financing.
Why is real estate so important to our economic recovery? There are many reasons, not the least of which is that real estate is believed to be upwards of 75% of our nations net worth and it is a major source of employment in this country.
What is happening right now on the world stage? The world is seriously considering replacing the US dollar as the world standard currency.
Why? Lack of confidence in the U.S. economy and our monetary policy of record deficits and debt.
How do we get that confidence back? Economic recovery now!
Thanks for listening!