No matter what President Obama says and regardless of his eloquence saying it, it would be a dire mistake, completely lacking in common sense, wisdom, and - mostly - regard for the US Constitution, for "We the People" to allow or accept any health care or health insurance program created by the US Congress and run by the US Government bureaucracy.
Congress established The U.S. Post Service in 1775 - they've had 234 years to get it right.
o It is seven billion dollars in debt again this year and will need another "bailout" (a word that is becoming all too common these days).
Congress established Social Security in 1935 - They've had 74 years to get it right.
o It is broke. It survives only on funds the US Government has borrowed from the next generation of Americans.
Congress established Fannie Mae in 1938 - They've had 71 years to get it right
o It is broke. Moreover, it is taking millions of Americans to bankruptcy court while it survives on (here's that word again) bailout money.
Congress established War on Poverty started in 1964 - They've had 45 years to get it right.
o The IRS confiscates over a trillion dollars of our hard earned income each year to distribute to Washington bureaucracies to help poor Americans escape poverty, but the poor still abound. The US Government is losing that war.
Congress established Medicare and Medicaid in 1965. Both are health care and health insurance programs. - They've had 44 years to get it right.
o Both are broke. They survive only on funds the US Government has borrowed from the next generation of Americans.
Congress established Freddie Mac in 1970 - They've had 39 years to get it right.
o It is broke. Moreover, it too is taking millions of Americans to bankruptcy court with it.
In 2009 Congress established a fund of trillions of dollars in the massive political payoff called the TARP Fund.
o It shows NO sign of working the way the Congress and the White House (both Bush and Obama) presented it to "We the People."
In the first weeks of the Obama administration, the US Congress passed an almost one trillion-dollar pork-barrel bill disguised as a stimulus package that would, we were told, moderate the recession and reduce unemployment.
And now-a new record: Congress established "Cash for Clunkers" (welfare for the auto industry) in 2009 and it went broke in 2009!
o So much for the ability of the US Congress to think ahead - it simply doesn't exist.
So, with a perfect 100% failure rate, can Americans truly believe the US Government can be trusted with a government-run health care system that the Congress designed?
"We the People" pay for every one of the failed programs listed above. Add another trillion or so (remember, a trillion is one thousand billions) of our hard earned dollars to the money the US Congress can waste, and it most certainly will be wasted.
The health care system in America is undeniably the best in the world. It became the best because "We the People" are in charge, and because the free enterprise system works. However, "We the People" also know that the system is imperfect and that the delivery system for health care relies on insurance companies whose self-interest is often opposed to the interests of "We the People." It is also plagued by the irresponsible behavior of attornies that sue the medical commuity at the drop of a hat.
The health care and health insurance challenges that face America in 2009 have many more workable and less expensive solutions than the ones the Washington insiders are promoting. None of these alternatives requires giving the US Government another opportunity to fail.
This blog is too short to enumerate them. I encourage you to do some research on the internet where you will discover that the systems being modeled in Washington...
An article, Turmoil Spooks 529 Holders, was published in the National Underwriter on 4/20/2009. (TREVOR THOMAS) The article suggested a flight to safety by parents and grandparents that were "saving" in 529 Plans for their children's and grandchildren's college educations.
Hooray! America is waking up to the reality that Wall Street and the Dolts in DC have been telling us to "save" but they are really encouraging us is to gamble. Investing is, by definition, very risky. When investing that is disguised as saving it becomes a con-game. Basin your children's or your grandchildren's future on a con game that you or they cannot win is beyond risky; it is almost foolish.
However, the con-artists tell you otherwis. They show you 8% gains year after year. They proclaim it to be as certain as death. They pay little of no heed to actual investor performance history. Instead, they substitute generic stock market statistics from a company that wants them to write business and that support the sales proposal. (Sales proposals are OK if they are sales proposals. They create a con-game when they are pesented as personal finance advice.)
A truly sage advior told me today that her college funding proposals always incorporate cash value life insurance, which is not counted in financial aid assessments, and rely on gurantees that are ->
truth based
objective
verifiable
That kind of advice might just lead to reliable wealth creation and wealth preservation, intelligent legacy planning, and the perfect investment.
You might want to evaluate529 Plans that way, too.
In 1974 the US Congress passed ERISA. The aim was to convince Americans that saving money was a bad idea and that investing [aka gambling] in an IRA or 401(k) was better than putting our money into guaranteed return savings vehicles. Americans listened. Wall Street and the IRS rejoiced.
In 1977 a pretty good high school coach and motivater was able to convince thousands of naive amateurs that they were "financial advisors." He taught them how to strip every penny possible from secure whole life insurance policies and - you guessed it - buy term insurance and invest [aka gamble] everything else in mutual funds. Americans listened. Wall Street and the IRS rejoiced.
A few years later EF Hutton invented universal life insurance. These policies took the money that whole life insurance saved in guaranteed accounts and moved it into accounts that were not guaranteed but that the Wall Streeter could profit from without concern for whether the policy owner did or not. These kinds of policies destroyed successful insurance companies and sucked billions from the savings of American families. Americans listened. Wall Street and the IRS rejoiced.
In the ensuing decades Americans listened to advice to invest [aka gamble] in dotcoms and even to invest [aka gamble] our home equity in risky schemes. Americans became convinced that carrying debt equal to their investments [aka gambles] made some sort of sense. Americans listened. Wall Street, the IRS, and money lenders rejoiced.
"THE FACT THAT AN OPINION HAS BEEN WIDELY HELD DOESN'T MEAN THAT IT'S NOT UTTERLY ABSURD." Bertrand Russell.
We have been paying attention to the wrong people for almost 4 decades. The results are that American families and the American economy are bankrupt.
You and I can't stop the folks in DC from telling us that they can handle our money better than we can, or the not-so-smart gurus on Wall Street from trying to sell us investments that make them wealthy and us poor.
We can stop listening. Please, stop listening to the wrong people. Find old ways of creating wealth, preserving assets, and taking care of your families.
In January, 2008 I wrote an entry in my blog about the failure of the White Star Line to add enough lifeboats to the Titianic because they believed it unsinkable. It's worth re-reading today as the Titanic of the US economy is compromised by the arrogance and greed of the financial Behemoths and the gluttonous appetite for power by the Dolts in DC - the US Congress, the US Presidents of the past 16 years and the misguided ambition of the current US President for a "change" to the unknown...at least to you and me it's unknown.
The problem for the typical American is the possible failure of the good ship Economy - especially the financial structure that supports it. The media is not trumpeting the nature and outcome of such a failure, nor is the faltering financial community keeping us honestly informed. Instead they feed us the pabulum advice...
don't make decisions now,
stay the course,
wait for the market to settle,
buy now when the market is down so you can capture the gain on the upswing
and on, and on, and on...
BUNK, BUNK, BUNK, BUNK, AND MORE BUNK!
You were told the same thing when the market was at 12,000, 11,000, 10,000, 9,000, 8,000, and today. That advice has created immense losses for Americans - TRILLIONS OF DOLLARS OF LOSSES.
What if, on the other hand, you had done what common sense, and a few advisors that are not controlled by the Behemoths, recommended as early as July of 2007? What if you had moved your money into a lifeboat when all the signs pointed at the sinking of the good ship Economy? You would have lost nothing. Of course, if the market had surged at that time you might be disappointed that you didn't hang on for the gain. However, that is like folding a losing Texas Hold'em blind only to discover that the next three cards would have made it a winner.
In the current situation, had you opted to move your money from "the market" to the lifeboat of a credit union, money market account, CDs, whole life insurance [my choice], or any other financial product with guarantees, you would not have lost a penny - not one single penny - and would have earned fair market interest rates the entire time. Want proof?
$100,000.00 left in the "market" in July of 2007 is worth less than $50,000.00 today.
$100,000.00 moved into a lifeboat in July of 2007 at 3% is worth over $105,000.00 today.
That difference of over $55,000.00. 3% doesn't look so bad from this perspective.
The advice of the Behemoths and their Minions aims to bolster the balance sheets and income statements of, believe it, the Behemoths and their Minions, not yours. Their advice aims to keep their ship afloat at your expense. It is bad advice for you and me and for 99.9% of Americans.
Hell, Warren Buffett - America's iconic investment guru - lost money last year. So did T. Boone Pickens and many other notable investors. The Wonks on Wall Street [I now call it Dull Street] - the same folks the Behemoths quote to entice you to "invest" [aka gamble] with them - have failed across the board.
It gets worse. The Dolts in DC have spent over a trillion dollars in the last six months in a disorganized and undisciplined attempt to right the good ship Economy. They have committed almost two trillion dollars more of our money since January 20th. They have failed so far. Their failure to actually assist Americans save their homes and afford new mortgages is especially blatant since that's what got the greed up in DC.
We all want success in this regard. However, the plenitude of pork that permeates the spending plans of these failed programs indicates discomfort for "We the people" and contentment for the cronies of the Dolts in DC.
If you haven't taken refuge in a lifeboat yet, it's time. If the market grows dramatically and rapidly you may miss a part of the upsurge. That's very unlikely. If there's hope to repair the massive breach in the hull of the good ship Economy, it will likely have to be put in dry-dock for a period of time. In the short-term it is better to have a small guaranteed gain than the possibility of no gain or significant losses. For all practical purposes there is no long-term until the good ship Economy returns to full functioning capability.
"Relying on the long run for investment decisions is essentially relying on trend lines. But how certain can we be that trends are destiny? Trends bend. Trends break. Today, in fact, we have no idea where any trend lines might begin or end, or even whether any trend lines still exist."
If your advisor continues to encourage you to keep bailing while the ship is sinking and sturdy lifeboats are waiting, fire him or her. S/he is obviously not looking out for you.
The common sense approach to creating wealth and managing your personal economy does not depend on the success or failure of other people and self-serving financial institutions. It relies on you and other like-minded Americans taking control of the money that flows into your life to assure your success, not the success of some Behemoth, banker or politician.
Remember, America was built on the foundation of saving money in local banks and credit unions, whole life insurance policies, and home ownership. There is little or no place in the personal economy of American families for speculative investments - including and especially the overhyped and oversold "retirement accounts" such as IRA's, 401(k)s and their clones.
The best economic advice for centuries has been to have a lot of money in ready cash accounts and to pay off the mortgage. We may be a bit more sophisticated today as regards how to manage those processes, but the principles remain the same. People with a stash of cash [I recommend three to five years of gross income], and thity to forty percent equity in their homes are relatively comfortable in today's economy.
"Greed, for lack of a better word, is good." Wall Street, 1987
The SEC is a Behemoth that works for other Behemoths, in particular the major Wall Street firms and their minions. The SEC, along with its junior partner FINRA, wear the mantel of a Robin Hood while concurrently robbing everyone in the neighborhood by supporting the self serving aims of the Behemoths. Now they want to get control of another bag of money.
‘Sheryl Moore, chief executive of AnnuitySpecs.com, estimates there were $25.1 billion in indexed annuities sold in 2007, down about $2 billion from their peak in 2005. While sales decreased, last year total indexed annuity assets reached $123 billion according to the SEC."
The SEC claims that its aim is to protect consumers by further regulating an insurance product on the rather flimsy claim that Indexed Annuities are funded by investments.
DUH!
All insurance products are funded by investments. The simple fact is that the Wall Street wizards, who brought you the current credit and housing crises, now want to ‘fix' the indexed annuity market.
BUNK!
The Wall Street Behemoths, who will be no more open and clear in their explanation of this product than current state regulations require, want to capture all that annuity money for themselves.
Consumers will actually lose since the Wall Street wonks will dishonestly demonstrate that these products don't perform as well as the failed mutual fund industry, ETF's and fee based advisors, thereby recovering the $123 billion that Wall Street's Behemoths have been unable to get their greedy hands on.
American's have been duped into believing that the SEC/FINRA are the watchdogs they were originally intended to be. They are not. They have morphed into watchdogs for the Wall Street Behemoths and their aim has become protecting the Behemoths from lawsuits by consumers as opposed to protecting consumers from the subterranean subterfuges of the Wall Street Behemoths.
Having said all that, it is clear also that the Indexed Annuity business is plagued with charlatans and snake oil sales reps that create a problem for the majority. The states have been too slow to effectively regulate these products and the people who sell them. The answer, however, is not to add a layer of bureaucracy that answers to the Behemoths.
September 8th, 2008 The seemingly never-ending housing and mortgage crises effect each of us every day whether we feel it or not. The fact that the federal government is taking them over in order to rein in their excesses demonstrates that the take-over of Fannie Mae and Freddie Mac represents something much more than just a government bailout.
Fannie Mae and Freddie Mac are quasi-governmental agencies that were virtually immune to the checks and balances of free enterprise. Their failure is the failure of government intervention in the free market that established these entities in the first place, and allowed them access to the capital markets while concurrently giving them free rein to gain subsidy and support from the pork barrel congress.
This is a watershed moment in American economics and perhaps American politics; a monent when the do-nothing Congress may recognize that federal government's finger in the free enterprise pie creates many more problems than it solves...big problems. Dr Agon Fly _____________
Published: September 7, 2008 WASHINGTON - The Bush administration seized control of the nation's two largest mortgage finance companies on Sunday, seeking to shrink drastically their outsize influence on Wall Street and on Capitol Hill while at the same time counting on them to pull the nation out of its worst housing crisis in decades.
______________
The plan represents a cease-fire in a decades-long ideological battle over the proper role of the companies. Free-market conservatives see the companies as extensions of "big government," while Democrats have protected them as the main vehicle to promote affordable housing for middle- and lower-income people.
It is rare for me to quote someone else's blog in full detail. However, Greg Moore is helping many Americans escape from the Debt Paradigm and his emails are always worth reading. I hope this one inspires...
The U.S. Government is getting into the 0% Interest Loan Game. Actually, if you consider income tax refunds are really 0% loans taxpayers make to the government, the government is already in the 0% game.
Only this time, instead of you receiving 0% on money you lend to the government, the government will lend you money at 0%.
I'm referring to the new Housing and Economic Recovery Act of 2008, specifically, the "First-Time Home Buyer Tax Credit" portion of this bill.
I say, "current," because, as you'll read, some details are still being worked out.
In a nutshell, the FTHBTC provides a "refundable" tax credit up to $7,500 for first-time home buyers on homes purchased between April 9, 2008 and July 1, 2009.
Tax credits reduce your tax liability dollar for dollar, so, for example, if you have a $10,000 tax liability and you were eligible for - and took - all $7,500 of this credit, you would only owe $2,500. The "refundable"
part means you will receive this credit even if you have no tax liability. If you owe nothing, you will receive a check up to $7,500. If you expect a refund, your refund check will be increased by the amount of the credit.
Now, before you begin scheming on all of the ways you can put this credit to work in your debt-elimination, wealth-building, or flat screen TV plans... wait!
The amount of your credit must be PAID BACK over a period of 15 years. "Tax-credit" in this case means you have an IRS loan at 0% for 15 years.
This is just a wee bit different than a traditional tax-credit...
Michelle Singletary, personal finance columnist for the Washington Post had a few questions for an IRS spokesperson...
Michelle: Since this is a loan from the IRS, will the IRS be sending an annual loan statement to taxpayers?
IRS: The details of how the IRS will collect this money or inform people have not been worked out. A line would probably be added to the standard 1040 tax form to indicate that the credit should be paid as part of your tax liability.
Michelle: Can I pay off the loan early?
IRS: The IRS hasn't yet come up with a system to accommodate an early payoff.
Michelle: What happens if someone does not pay back the debt on time or at all?
IRS: The unpaid loan will be treated like any delinquent tax obligation, meaning standard IRS interest and penalties apply.
Yep. Just like any 0% loan you default on, the 0% rate disappears, which places it in the same category as 0% credit cards, with one exception...
Do you really want to have the IRS as a creditor?
Greg Moore is the Architect of the Debt Freedom System, ‘DebtIntoWealth - Lessons from My Journey to Debt Freedom."
Father Abraham stood, up and replied, "If you would have my advice, I will give it you in short; for A word to the wise is enough, as Poor Richard says.
Ah! The first words of Poor Richard and how profound. There's much more to come. Read on.
"[The crowd at the auction] joined in desiring him to speak his mind, and gathering round him he proceeded as follows.
"Friends," said he, "the taxes are indeed very heavy, and, if those laid on by the government were the only ones we had to pay, we might more easily discharge them; but we have many others, and much more grievous to some of us.
Father Abraham's comment reflects one of the most fundamental characteristics of Americans: the indomitable spirit that sees the insanity of governments and their attempts to manipulate the people and the economy with taxes, as a mere pot hole on the road of life. His comment also points to the next topic, which is that we create our own money problems. Read on.
We are taxed twice as much by our idleness,
Dr Franklin's math might be a bit obscure but one thing is certain; individually and collectively we lose both income and assets by failing to act when action is appropriate or required.
Money comes from work. Success comes from handling that money well. That's more work. Americans are the masters when it comes to making money from their work, but we have given in to idleness when it comes to the management of our money. We have allowed the Behemoths to convince us that they know better than we what's best for us. We have relinquished our power, and that is a greater burden than taxes ever could be.
three times as much by our pride,
When Father Abraham talks about ‘pride' as a treble-tax he's reminding America of one of its longest standing foibles: keeping up with the Jonses.
Perhaps it's just human. It's been a recognized human frailty since Cain whacked Able. Regardless, spending our money in an attempt to appear affluent, sophisticated, educated, informed, well-connected, etc. is real money that is being traded for rationalized gains that are nothing more than smoke.
and four times as much by our folly;
"Folly - a lack of good sense or normal prudence and foresight;an excessively costly or unprofitable undertaking" Merriam-Webster Online. Have you ever followed a whim and found it to be a folly? Or just entered into a folly, eyes wide open?
Father Abraham identifies the greatest ‘tax' that we impose on ourselves as ‘folly.' The Behemoths have convinced us that folly is wisdom. They want us to believe it's OK to lose real money in investments today in order to make maybe-money at some undetermined future date. That's folly - a lack of good sense, normal prudence and foresight; an excessively costly and unprofitable undertaking for you, but not for the Behemoths - that's how they have become wealthy as we find less and less in our accounts.
and from these taxes the commissioners cannot ease or deliver us by allowing an abatement.
Today a few Americans clamor for the government to take over everything from health care to energy. Father Abraham reminds us that government can't bail us out of our individual and collective idleness, pride and follies.
However, let us hearken to good advice, and something maybe done for us; God helps them that help themselves, as Poor Richard says.
Poor Richard, the Founding Fathers and Mothers, presidents and statesmen and women, and their families recognized that God created a universe where we are personally responsible for our actions and inactions, our decisions about our lifestyles and what we do with the abundance that we have been given to steward. Even those who do not believe in God rank personal responsibility highest on the stewardship scale.
Here's a story that should make you madder than h... and wake you up to the reality that is the credit card business.
A businessperson applied for and received an Advanta credit card with a low permanent rate of 7.99% - not an introductory rate, a low permanent rate.
The card was used to pay all of the businesses expenses and was paid in full periodically as cash flow allowed; ususally each month or so.
All payments were made on time and the credit limit was never exceeded.
There were no cash advances taken and the "courtesy checks" that came with almost every bill, and which carry usurious rates, were summarily shredded as they were received.
The businesspersons's credit score was in the high 700's and the business itself had never had any kind of negative report from any credit reporting agency or vendor.
So, what did Advanta do? They raised the rate to over 20% with a two week notice and with no justification other than "We adjust rates based on a variety of factors."
Here's the reality.
You have NO CONTROL of the money that is tied up by credit card companies or of the rates they can charge you for the use of that money.
Credit card issuers can raise your rate for NO REASON AT ALL and with minimal notice.
Unlike the fixed or variable rate mortgage on your home, the terms of the mortgage on your paycheck that credit card companies hold can be changed by them without cause or limit - that's right, they can charge you 100% if they wish.
Credit is a trap. You cannot win the credit game and you cannot escape unless you learn to be your own credit grantor; to be your own bank. It's not as hard as it sounds or appears. You have to change your mind about money and adopt The Money for Life Plan thatl lets You Be The Bank. I know this is a commercial of sorts, but I also know that those who follow this approach are rocking comfortably on the front porch while others are sneaking out the back door to avoid the bill collectors.
By the way, the businessperson cancelled the credit card, paid off the balance and now relies entirely on her own bank.
I pay close attention to the financial news. It's part of my job to know what's really going on in the general economy so I can properly train other advisors and guide my personal clients with integrity.
Below are six articles from financial news sources from last week I encourage you to skim the first five and read No. 6 carefully.
The Bush administration announced its plans to borrow billions of dollars to deal with the skyrocketing budget deficits, placing the blame for the near record levels of debt on the dismal economy a...
Despite previous threats to veto any proposed housing bill, President Bush today signed a controversial bill that aims to help the limping U.S. housing market as well as provide a financial boost m...
Between May 2007 and May 2008, the cost of homes in the U.S. declined an unprecedented 15.8 percent, indicates the Standard & Poors/Case-Shiller Home Price Index of 20 cities. This figure...
Hedge funds may post their worst month in at least five years after bets on financial stocks and crude oil backfired. Wagers on a decline in financial stocks and homebuilders soured afte...
The International Monetary Fund (IMF) today said there is no visible end to the ongoing housing recession in the U.S., adding that tough credit conditions could contribute to an extended economic s...
(Fortune) - Although you won't find it listed on your calendar, we're approaching the anniversary of an epochal event. No, it has nothing to do with the NCAA basketball tournament. It's a different kind of March Madness: The end of the bull market that lasted for a generation and changed the way that Americans think about stocks.
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