Pressure rises against bottled water. This item is really more about just thinking than personal finance but since I get to decide what to write I decided to post it here. I could have posted in on the Curious Cat Science and Engineering Blog. But when I see so many silly people paying way more for water than the $85 a barrel oil I hope that it is just because they don’t think not that they can’t think. Plus I just posted: Bottled Water Waste a few months ago.
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Salt Lake City Mayor Ross Anderson said, “When I see people at the airport go over to a vending machine and waste their money buying bottled water at the vending when it’s standing right next to a water faucet, you really have to wonder at the utter stupidity and the responsibility sometimes of American consumers.”
Wow, very blunt and very true. Related: Ignorance of Many Mortgage Holders – Too Much Stuff – Shop Around for Drugs
I have mentioned Kiva before: Microfinancing Entrepreneurs.
Kiva is lets you loan money directly to an entrepreneur of your choice. Kiva provides loans through partners (operating in the countries) to the entrepreneurs. Those partners do charge the entrepreneurs interest (to fund the operations of the lending partner). Kiva pays the principle back to you but does not pay interest. And if the entrepreneur defaults then you do not get your capital paid back (in other words you lose the money you loaned). I plan to just recycle repaid loans to other entrepreneurs.
I have just placed $150 in loans to 6 business entrepreneurs (in Honduras, Indonesia[2 loans], Tajikistan, Uganda and Ukraine) – and a $100 donation to Kiva. Adding to my previous loans of $350. Since our last post the Oprah Winfrey Show, President Clinton’s newly released book Giving and others have sung the praises of Kiva and made it a challenge to find entrepreneurs of Kiva to lend to. That seems to have been partially fixed the last few weeks (though still they limit you to no more than $25 per entrepreneur – in order to allow the large numbers of people that want to lend to get through).
If you lend through Kiva, add a comment with a link to your Kiva page and I will add you to our list of Curious Cat Kivans.
I have mentioned previously the horrible “service” I received from Discover Card. They actually sent me a check finally for the overpayment. They still have failed to send me the cash back reward I earned. ust spun off their Discover Card subsidiary today). As I stated before if they sent me the money they owed I would loan that through Kiva and add an equal amount from me. Obviously I exceeded that with the loans mentioned above. If they send the cash back bonus they owe I will do the same thing.
Related: Kiva: Microfinance Loans (posted on Christmas day 2006) – helping people succeed economically
Private- Equity Tax Hike Falters
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In response, private-equity firms — whose multibillion-dollar deals have created a class of superwealthy investors and taken some of America’s large corporations private — hired dozens of lobbyists, stepped up campaign contributions and lined up business allies to wage an unusually conspicuous lobbying blitz.
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Several prominent lawmakers expressed surprise to find that the managers’ profits, known as carried interest, were taxed as capital gains, for which the rate is usually 15 percent. That is less than half the 35 percent top rate paid on regular income.
Yet another corporate welfare loophole that allows private equity to avoid paying the taxes they owe. What a surprise that the political leaders decide to tax the future generation instead of those paying them huge sums of money today (ok, it is sadly not a surprise that money buys favors in Washington DC). One option to cut the debt passed on to future generations is to cut spending but since spending has exploded over the last 7 years the decision to force our grandchildren to pay instead of paying for it ourselves is something the “leaders” of our country should be ashamed of.
Federal spending in billions – source: fedspending.org
| year |
|
$billion spent |
|---|---|---|
| 2000 | $1,813 | |
| 2001 | $2,027 | |
| 2002 | $2,284 | |
| 2003 | $2,524 | |
| 2004 | $2,517 | |
| 2005 | $2,603 | |
| 2006 | $2,869* |
* $2,152 actual spending for 3 quarters which is a rate of $2,869 for a full year. 2007 data not yet available.
In Charge It to My Kids Thomas Friedman makes the correct point that I have made previously (Washington Paying Out Money it Doesn’t Have – Inheritance Tax Repeal). Politicians like to tax your grandchildren to pay for what they are spending today.
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added Ms. Perino. “I just think it’s completely fiscally irresponsible.”
Friends, we are through the looking glass. It is now “fiscally irresponsible” to want to pay for a war with a tax. These democrats just don’t understand: the tooth fairy pays for wars.
Huge deficits created by spending tons of money that you don’t have, is just taxing your grandchildren. It is not a sign of being fiscally responsible. It is a spending today and charging it to your kids – which is a bad idea.
If you want to cut (or not raise) taxes the honest way to do so is to cut spending. It is not honest to claim you are not raising taxes when you spend more than you have and pass on debts. Those debts are just future taxes. Those electing these politicians that just add more and more debt to the future are mortgaging the country. Those debts will come due. That is obvious.
You can seem to have a free lunch (or free roads to nowhere or whatever other frivolous, or important, spending you want) for awhile (decades actually for a country with a very strong economy) but eventually people will have to pay for the debts the current credit card culture of those in Washington. Those decades of spending what they don’t have might well start causing real pain in the next 10 years, or perhaps such irresponsible behavior can go on several more decades (a strong economy can hide spendthrift habits). but eventually that spending will have to be paid for – either by your children or grandchildren.
Related: Buffett on Taxes – Warren Buffett on the similar trade deficit (where those in the USA directly, instead of though their elected government) spend beyond their means:
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Jon Stewart is a Genius
Jon Stewart asks Alan Greenspan an excellent question:
Why do we have a Fed? Why do we have someone adjusting the rates if we’re a free-market society? Alan’s answer is not satisfying, but I don’t blame him: The economics profession does not have a good answer. We economists have rigorous and fundamental theory to explain why we have environmental regulation (externalities) and to explain why we have antitrust laws (market power), but there is no consensus about what market failure calls for the existence of a central bank. The answer has something to do with the benefits of a system of fiat money. And it has something to do with the possibility of short-run monetary nonneutrality… |
Nice post from the recent Chairman of the Council of Economic Advisers to President Bush and current Harvard professor. If I remember right he was in consideration to serve on the Fed. I also don’t think he is questioning the regulatory role of the Fed but the interest rate and monetary policy.
Related: Bernanke Calls for Stronger Regulation of Mortgages – Investor Protection Needed – What is the Fed Funds Rate?
Double-digit home price drops coming
The survey attempted to identify the high and low points of housing prices in each of the markets, some of which started declining from their peak in the third quarter of 2005. All are median prices for single-family houses. Nationally, Moody’s is projecting an average price decline of 7.7 percent. That’s a jump from the 6.6 percent total price drop that the company was forecasting in June and more than twice that of last October’s forecast of a 3.6 percent price decrease.
This forecast appears to me to be from the absolute top to the bottom over the course of several years. That decline is now estimated to be over 10% for nearly 23% of the markets. The remaining 67% will decline less than 10% from the peaks or increase. There average price decline prediction (again from the top of the market to the bottom) nationwide is now 7.7% up from an estimate of 3.6% last year.
Fair Use Worth More to Economy Than Copyright, CCIA Says
“Much of the unprecedented economic growth of the past 10 years can actually be credited to the doctrine of fair use, as the Internet itself depends on the ability to use content in a limited and nonlicensed manner,” CCIA president and CEO Ed Black said in a statement. “To stay on the edge of innovation and productivity, we must keep fair use as one of the cornerstones for creativity, innovation, and, as today’s study indicates, an engine for growth for our country.”
First, it is sad that college students are so lame they can’t even understand basic personal finance concepts like high interest credit card debt is very bad. But millions of them seem to actually be that lame (not exactly a great sign from our future leaders :-/). The credit card companies actually claim: “Our overall approach toward college students is to help them build good financial habits and a credit history that prepares them for a lifetime of successful credit use.” Does anyone believe this? A related articles discussed how much cash universities were taking from credit card companies: The Dirty Secret of Campus Credit Cards.
It really isn’t that hard to do the right thing. Credit card companies have learned to profit by gauging their customers. If they claim that they are trying to teach good financial habit then the university to set up a contract to favor that. If bad practices occur (students not paying off the full balance say) they the credit card companies don’t get to make a profit on that – since it would be rewarding failure by the credit card company. How you want to do this is up to you but I can’t think of several ways. It is pretty simple – don’t let the credit card companies profit by encouraging stupid credit card use – like they do now.
Yes, creating a climate where the universities focus on the credit card companies actually doing what they say they want to do is a new way of thinking. But paying universities millions to market exorbitantly expensive financial products that harm students finances and teach them bad financial lessons is not some grand tradition passed down from Cambridge 200 years ago. Obviously neither side minds doing things differently for the right amount of cash. Lets see if they mind doing so to help the students learn. My guess is they will mind doing that. But I will be happy if I am proved wrong. My guess is that some schools would (and maybe even are doing this) – some schools really do care about helping their students learn.
The universities could choose to use their clout to help student instead of just getting a big payday for themselves. That would be a good lesson for students to learn. Much more effective then telling students they really should act ethically and not only chase after the dollars after they graduate. Such “advice” rings pretty hollow if you see that same university selling students out for a quick buck.
Related: Poor “Customer Service” from Discover Card – Credit Card Tips – Don’t Let the Credit Card Companies Play You for a Fool
Some pretty amazing statistics are in this article – Homes entering foreclosure at record:
Serious delinquencies, those 90 days or more late, jumped to 1.11 percent of all loans, from 0.98 percent in the first quarter. The loans actually entering foreclosure proceedings stood at 0.65 percent, a rise from 0.58 percent in the first three months – and the highest rate in the MBA’s 55-year history.
This quote however is a bit misguided I think:
Stagnant home prices have not taken a toll on housing affordability. Yes people that put nothing down and took out mortgage where they could not pay the monthly payments and planned to just borrow even more from the house if the house price went up can’t afford it – but they couldn’t afford it in the first place.
Related: Learning About Mortgages – Mortgage Defaults: Latest Woe for Housing – Ignorance of Many Mortgage Holders – Median Housing Prices Down 1.5% in the Last Year – How Not to Convert Equity
But I have a nasty little secret for you, folks. If you use realistic numbers rather than what I call WAAP – Washington Accepted Accounting Principles – the real federal deficit for the current fiscal year is more than 2-1/2 times the stated deficit.
What is going on? The same old story. Those in charge of spending the money in Washington like to use deceptive tactics to try and trick people that don’t know any better. For example, if the government incurs a deferred liability to pay $100 Billion dollars in future social security payments this year and invests that money in treasury bonds they act like the government didn’t spend that money. Of course it did, they took $100 billion in social security taxes and spent it to build bridges to nowhere, pay huge corporate welfare payments, other worthless wastes, even worthwhile things etc..
Related: USA Federal Debt Now $516,348 Per Household – Washington Paying Out Money it Doesn’t Have – Concord Coalition