A big theme for Americans these days is the overspending indulged in by recent governments. One option for Americans is to look for political change; history, however, of politicians giving emphasis to less government in election campaigns points to the fact that when it comes right down to it, overspending remains way over the top.
The other option is to look elsewhere – to “escape from America.” One of the better options out there these days is Mexico. Tighter financial practices and a healthy, growing economy, point to several advantages to buying Mexico real estate, including retiring in a country where tax funds are put to better use, and where there are excellent investment possibilities. To start off, let’s consider government income and spending in each country.
Comparison of Numbers
The following are some estimates for the year 2011, except where indicated. The “Total Budget” and “Deficit” for Mexico were calculated using an exchange rate of 12.5 pesos per U.S. dollar. The amounts are in billions of U.S. dollars, and in parentheses are the percentages of the GDP, compared to the same year the data is from.
US GDP $15,299 Mexico GDP $1,541 (2010)
US Total Spending $3,834 (25.1%) Mexico Total Spending $267.6 (17.4%)
US Deficit $1,267 (8.3%) Mexico Deficit $5 (0.35%)
US External Debt (2009) $13,450 (94%) Mexico External Debt $177 (20%)
Although the comparison is approximate due to estimation and availability, the picture is clear. On one side (U.S.) there is overspending, very large deficit and huge debt; on the other side (Mexico) all of these are far more moderate, especially looking at the deficit for 2011 – less than 0.5%!
For 2011, Mexico is budgeting about $20 billion U.S. to pay towards the national debt. The U.S., on the other hand, had to set aside $164 billion of its budget in 2010 just to cover interest payments. Everyone knows that no government is perfect, but Mexico’s economic and spending practices do present some real benefits for Americans who choose to buy real estate, invest or live in Mexico, seeing government funds put to good use with real results, despite a much smaller budget, and a much, much smaller deficit.
In terms of infrastructure, Mexico has been moving ahead by leaps and bounds over the past few years. President Felipe Calderon has justifiably called his term the “presidency of infrastructure.”
Mexico’s current policy of modernizing and promoting economic growth throughout the country has lead to a large number of new expressways being built.
Mexico is currently #1 in the world for new expressway projects, surpassing giants like Brazil and even the U.S. While many of the projects have been focused on areas of high economic activity, new, modern highways have also been constructed to more isolated areas of the country to bring economic opportunity.
This also brings real estate investment opportunity – investment which can be made on a much smaller budget and can generate much higher returns. In the U.S., the market is much more sophisticated, with large amounts of information in the hands of large companies; these companies hold control, and leave few opportunities for small investors.
For Americans who choose to retire in one of the established tourist areas of Mexico, they will also see real benefits from new expressways, airports and other large-scale infrastructure which makes living in these areas more convenient, and bringing growth needed to support investment.
Considering what the U.S. spends on healthcare, you would think that it would be very affordable and accessible; in 2010 the $453 billion for Medicare, $290 billion for Medicaid and the $79 billion for the Department of Health and Human Service have made for a total of $822 billion. Despite this level of spending, and despite the new healthcare reform (or perhaps even more so because of the new healthcare reform) many Americans find healthcare costs inaccessibly high.
This compares to Mexico, which budgeted a total of about $8.4 billion USD (2011 – 105.6 billion pesos,) 1% of that of the U.S. Again, despite lower spending, residents of Mexico have access to modern, private hospitals which are on par to those of the U.S. in terms of quality (according to the World Health Organization) but on average are 50 – 70% less expensive. Full coverage insurance is available for about $150/month for a family with 2 children. A large range of private doctor’s practices can be found for any budget; even the more expensive ones are still cheap compared to the U.S.
(It is worth noting that the country’s most impoverished still have limited access to modern healthcare. But even in these cases, Mexico offers very low-cost private clinics that work well for minor illnesses and there access to generic medications in most urban areas; a doctor’s appointment can be as low as $2, and a package of 10 paracetamol tablets, the generic for Tylenol, is $0.40. A workers’ insurance hospital system is also especially in place which covers everyone with official work, and their family, for a very small monthly deduction. For those on really low incomes – i.e. less than the $800/month average – Mexico is still probably better than the U.S., at least for the people who live where these facilities exist.)
Due to the economic policies of recent governments, Mexico has entered the “trillion dollar” class, referring countries which have an economy over a trillion dollars; this “class” is shared by 13 other countries in the world, plus the European Union, if counted as one economy.
As mentioned above, the economic growth, combined with the new transportation access and government work to stimulate invest in high potential areas point to excellent opportunities for investment in real estate and other markets.
Where would you rather live – in a country that overspends with a huge debt, providing limited opportunities for individuals, or a country that limits spending, invests where it is necessary and profitable, and offers excellent opportunities both for investors and residents of just about any income level?
Consider retiring, living and buying property in Mexico.
TOPMexicoRealEstate.com; Mexico’s Leading Network of Specialists for Finding and Purchasing Mexican Properties Safely
About the Author:
Thomas Lloyd, Founder and President of TOPMexicoRealestate.com
Originally from Indiana, and a graduate of Purdue University in the Krannert School of Management, he holds a degree in management with a speciality in finances. Lloyd has several diplomas and certifications in Mexico Real Estate topics and is one of only a few professionals to hold Mexico’s new degree in real estate. This degree is accompanied by a Professional Identification Number, “cedula profesional,” which is issued for trained professionals such as those in the medical field, or in law. He has over 15 years of direct experience in Mexico’s business culture.
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