An Open Letter to B. H. Obama

I sent this to Barack Hussein Obama prior to the 2008 Presidential Election in response to his website posting asking for input. I doubt that he ever read it, because he never called me to discuss its contents.

I thought you might enjoy reading this, so here you go!

Mr. Senator:


While I agree with many of your goals, I have to disagree with your methods. You need to surround yourself with advisors who are non-political, and who really understand the driving forces around the economy, energy, foreign policy, immigration and medicine.

Income Taxes

You will not improve the economy by increasing taxes. This has never worked effectively, and it will cripple an economy that is already fighting to maintain balance. Also, remove the semantics from your argument. You state that you are not going to raise taxes. We both know that to be untrue. By allowing the prior cuts to expire, taxes are being raised from their current point. We know that the poor don’t pay taxes, but the working poor do qualify for the EIC and other programs. Telling the middle class that you are going to transfer their taxes to the wealthy is pandering. Placing more of the burden on the wealthy brings down the whole country, by taking away the incentive to produce.

The Pareto principle tells us that 20% of the people have 80% of the wealth. Well, of the 20%, we know that 20% of them have 80% of that wealth. The American Economy is driven by Free Enterprise. Owning a business is the American Dream. Now, you propose to punish those in the top 3% of incomes for having achieved success. You also want to remove the cap on FICA contributions for those who earn over $200K per year. This is another bad idea.

Windfall Profits Tax and Energy Policy

Your proposal to place a windfall profits tax on the oil companies is another idea that will not produce the desired results. This seems a lot like a government takeover, since the companies are being penalized for being successful. Ideologies aside, corporations do not pay taxes. Their customers pay the taxes, because the tax is included in the retail price of every product or service produced. The owners of the corporation pay taxes on their dividends, but corporate taxes are a cost of doing business, which is passed along to consumers. If you insist on stealing money from the oil companies, they will simply raise prices to overcome your tax. For example, a 50% windfall profits tax, when taxes are at 9% of retail price will result in a price increase of 6% to cover the tax, thereby maintaining the profitability of the enterprise, in spite of the taxes.

If we want to have lower gas prices, then we must be able to increase the supply of crude oil. While it may take ten years to realize the benefits of new domestic drilling and new refining, we still need to move forward in these endeavors. Had we done this ten years ago, we would not find ourselves in the current predicament.

We need to push for alternative fuel methods and expand production of hybrid vehicles. However, if the hybrid costs more than a comparable gas-only vehicle, the difference in cost may be too high to overcome in simple fuel savings. Tax breaks for production and purchase of these vehicles would be a good step.

It is possible to modify vehicles to work on other inputs, from used vegetable oil to propane. We should explore ways to help people that cannot afford new vehicles to be able to modify their current vehicles, so that these alternative fuels may be put into use.

Social Security

You will not fix Social Security by taking money from the wealthy. Social Security, as designed, is a Ponzi scheme, and we all know that those don't work. If you want to fix the system, make it fair to everybody. The system was poorly designed, and the government has been scrambling since the 1970s to try and fix it. If the system ran like a 401(k) or 403(b) program, where each contributor had control over the way their money is invested for their future, then the government wouldn't have to shoulder the blame for the system going bankrupt. The government has to meet its promises, but it can't. If you aim to be president, you must fix this problem right away. It can be done. If you don't know how, just ask me.

Social Security currently is an unfunded liability estimated to be as high at $20 trillion. Why not allow people to opt-out of Social Security, forfeiting all of their prior contributions, if they will agree to put at least 8% (an increase from 6.2%) of their gross income toward their own retirement under the privately-managed mutual fund family of their choice? The Financial Services Industry can easily set-up investments of this type. They would run similar to a Roth IRA, but with additional restrictions (i.e. No loans, available if permanently disabled, or retired at 62+). The rules for disbursement would be similar to current Social Security rules, with the annuity pay-out based on the amount invested and age-related factors. Accounts that are not annuitized during the lifetime of the recipient could be rolled into the account of a beneficiary or provided as a death benefit to heirs.

For those who opt-out of Social Security, their employer will continue to fund the FICA program based on wages paid, just like now. Self-Employed taxpayers would follow the same formula: Minimum of 8% into their own program, 3.1% to the government (SE Tax - capped), plus 2.9% (uncapped) for Medicare. This allows the system to continue to benefit from the labor force, without increasing the future liability of the system. Don't place an age cap on this, because the only people who will opt-out are those who can afford to fund their own retirement, and who don't need Social Security anyway.

Foreign Policy and Homeland Security

We need to get out of Iraq, but not until they can maintain their own security. We also need to continue to display to the world that we are united in our resolve to protect our interests and to remove the threat of terrorism. We don’t accomplish these goals by shrinking from fights that we are winning and by talking to despots and terrorists. Iran’s leadership is a problem that we need to correct now. We cannot wait until they have nuclear capability, and we cannot just let Israel attack, because the whole Middle East will go up in flames, and oil production and delivery will be affected.

We need to protect our borders and develop an immigration policy that makes it easier for productive members of other societies to enter, while making it harder for undesirables to enter. We need to allow those who protect our border to have access to the same technology that our military uses to perform surveillance activities during wartime, and we need to allow for military assistance with this problem.

Medicare and Health Insurance

The government does not need to be in the insurance business. Medicare is already an underfunded disaster (some estimate over $70 trillion with the new prescription drug program), and now you tell me that the government wants to increase its presence by taking over the industry? Bad idea!

Forcing employers to provide health insurance will result in higher unemployment. Forcing people to buy their own insurance will be a disaster unto itself. If you want to fix insurance, you need to deal with the underlying issues that contribute to high costs:

· Litigation costs · Malpractice Insurance Premiums · Medical Education Costs · Shortage of Doctors and Nurses · Inappropriate Usage of Benefits · Impact of non-paying Illegal Aliens

If you visit an emergency room in almost any state in the country, but especially in California and other border states, you will find a large number of patients using the emergency room, when it would be more appropriate (not to mention cheaper) for them to visit a family doctor. Why are they in the ER for a non-emergency visit? They are there, because they fall into one of the following categories:

· Medicare recipient · Uninsured Illegal alien · No medical insurance

Hospitals in the United States are not allowed to refuse care. Any other business or industry has the right to refuse service to anybody. No Shirt, No Shoes, No Money, No Service! I am not advocating the restriction of life-saving measures based on ability to pay, but I am advocating a more sensible approach to health care.

If we can reduce the cost of litigation and reduce the insane punitive damage awards, we can reduce the cost of both malpractice insurance and the provision of medical services. I know that the lawyers have a lot of money dedicated to lobbyists, but litigation legislation is necessary and long overdue.

Government assistance for medical education would be a big help, as doctors and nurses graduate with hundreds of thousands of dollars in education debt. This drives up costs as salaries must account for these debt service payments.

Deporting illegal aliens who cannot afford to pay for their care would be an important step toward reducing these costs for states that cannot afford them. Illegal aliens who reenter the country after deportation should be jailed for fraud and deported after their release.

Allowing hospitals to refuse patients who enter emergency rooms for non-emergency services, based on an inability to pay, would help reduce costs for everybody. Force non-emergency patients to seek family practitioners or urgent care centers for this type of medical care. Even if the government were to cover the cost of these services, it would still be much cheaper than ER care.

Conclusion

The United States of America is the greatest country on earth, but we have lost sight of how we became to be so great. Our country was built by entrepreneurs and tradesmen who believed that small government was good government. They did not believe that the government should tax its people, but should derive its income from tariffs imposed upon the importation of goods.

While we need the federal government to provide infrastructure and national security, the government has moved far afield from providing these basic necessities. Government is now immersed in almost everything we touch, and those in power seem to want to keep increasing its reach.

The economy would run more smoothly with a lower tax base. Gas prices would be lower without the restrictions on drilling and refining that have been imposed by the government. Government has let the people down with regard to immigration, but is finally doing a better job on Homeland Security. Medical care does not need to be provided by the government, but the government should take steps to lower the cost of care, so that everyone can afford it.

If we can get the politicians to stop and realize that their job is to protect the country and serve the citizens, rather than to succumb to the whims and fancies of lobbyists and their local constituents, then maybe, we can see some change. Until we change the way we elect our leaders, I don’t see anything changing for the better, which I find unfortunate.

Bankruptcies Are On the Rise

According to recent news articles, bankruptcies are at their highest level since October 2005, with an average of 5,945 filings per day during the month of March. Adding to this the fact that 663,000 Americans lost their jobs last month, indications appear to be that this number will only increase during the coming months.

While this is a shame, all too many people file bankruptcy when it is not their best financial option.

Bankruptcy comes in two versions that apply to most consumers. Chapter 7 is a total liquidation of assets and near total elimination of debts. Chapter 13 is basically a negotiated repayment plan, with terms set and monitored by the courts.

Certain items cannot be discharged in bankruptcy; notably any tax liabilities for the past three years, federal guaranteed loans (i.e. student loans), and any debts incurred as a result of fraud. Other exceptions vary by state, including what assets can be exempted from bankruptcy. As each state sets its own rules in addition to the federal guidelines, I will not get into that discussion here.

The key point to realize is what exactly is being protected by filing bankruptcy. If no one is suing you or threatening to take anything away from you, then you do not need bankruptcy protection. Filing bankruptcy is a move that shields your assets and income from attachment by creditors. If creditors are not filing lawsuits or taking repossessive action against you, then you do not need to file.

Now, what if you do find yourself facing multiple lawsuits and foreclosure actions? Well, take a moment to evaluate your situation. If you are facing the potential loss of your home, take a look at the numbers before you. If you only have a first mortgage, and the property value is under water, you would likely be best served to either attempt a loan modification with your lender or walk away from the property. Many states are non-recourse states, meaning that the holder of a first mortgage who repossesses your property cannot come after you for a deficiency balance. This does not hold true for auto loans, however.

Should someone file bankruptcy to hold onto their car? Probably not. If you are holding onto a car which you cannot afford, then you do not need it. You can try to negotiate new terms with the lender, and I can guarantee that you will face a lawsuit for any deficiency balance on the sale. You would be better off to sell the car short, and then try to make up any difference. An attorney retained prior to a repossession order would likely be a good investment.

OK, so we try to hold onto the house, and we let go of the car. Now what do we do?

Next, take a look at that stack of bills that you cannot pay. If no one is actively suing you, let them sit for now. If they are suing you, then take a look at what you have at risk. If you have no equity in your house, you won’t lose that. If your car is secured by a loan, other creditors can’t touch it. Your personal property along with any property that you use in your business, trade, or profession, is off-limits in most states also. That leaves your bank accounts and your paycheck as the primary avenues of recourse for a creditor’s attachment.

If you know that judgments exist against you, keeping as little money in the bank as possible should be a given. As far as your paycheck goes, part of your pay is exempt. This varies by state, but you are protected to a minimum of $5.15 (Federal minimum wage) x 30 hours per week. This money cannot be touched. After that, depending again on your state of residence, only 10% to 25% of the remaining Net Pay can be attached for ALL of your garnishments. It does not matter how many judgments or garnishments you may have against you, the limit is what it is.

Many Chapter 13 bankruptcy plans and many plans negotiated by CCCS for their “clients” require payments that can be much higher than that amount. You likely pay more than that now for your unsecured debts, if you are actually in financial trouble.

The problem comes when people facing hard financial times ask a bankruptcy attorney what they should do, and never consult anyone else. Now, I don’t want to upset the legal establishment, but I would venture to guess that at least one bankruptcy attorney out there recommends bankruptcy as the answer almost every time. Just consider how it is they earn their living: If you file, they get paid. If you don’t file, they don’t get paid. What would you recommend in their position?

Some items are not subject to the previously quoted exemptions. They include back taxes owed to the IRS, Federal Student Loans, spousal and child support, and some others that may vary by jurisdiction. However, bankruptcy won’t protect you from these either, so you are stuck with them.

By all means, if you are having financial difficulties, you should consult an attorney. You should also consult an accountant and a financial planner. I would personally do everything in my power to keep you away from CCCS, because they work for your creditors and not for you. That is why I put “clients” in parenthesis earlier. You are not their client, just their potential victim.

Other ways out of a financial crisis include loan modification, debt negotiation, and debt settlements. You can do an Internet search to get information on these types of programs, and I will caution you that a great number of people and companies are employed in these areas of expertise, and not all of them are trustworthy. Tread carefully, and try to deal with reputable firms and organizations for this type of help.

As with any advice you may read in articles, and especially online, keep a discerning eye out for your own best interest. Nothing herein should be regarded as legal advice, and it is not intended as such. Should you need any legal, accounting or financial planning advice, seek the counsel and recommendation of a competent, licensed practitioner in your area.

Security Freeze - Protect Against ID Theft

Identity Theft is one of the fastest growing crimes in America. Over $50 billion is stolen each year via Identity Theft, and you need to protect yourself. One of the best ways to protect yourself is to lock-down your credit reports with a PIN number.

By establishing a PIN number for your credit reports, you will keep prying eyes off of your information, which will help keep someone from being able to pretend that they are you, and then open accounts in your name. Of course, this only offers protection against potential future attacks.

Be sure to review your credit report to ensure that no accounts appear thereon, which are unfamiliar to you. If a review of your credit report reveals strange information, be sure to dispute it with the Credit Reporting Agency that is showing the faulty data.

Asking for a PIN number is a simple process. You may request via web, telephone, or mail. The downside is that Equifax is still in the stone ages, so they do not have an online way to ask for a PIN. You must either contact them via phone or mail. You may find information on all three of the CRAs below, if you want to establish PIN numbers for your credit reports:

TransUnion 1-888-909-8872 Fraud Victim Assistance Department, PO Box 6790, Fullerton, CA 92834

Experian 1-888-397-3742 PO Box 9554, Allen, TX 75013

Equifax 1-888-298-0045 PO Box 105788, Atlanta, GA 30348

If you have been a victim of Identity Theft, you can get a PIN for free, but you must make your request via mail only. Fees for PIN numbers vary by state. If you live in Indiana, your PIN is free. Other states allow charges ranging from $3 to $20 per bureau, so you may have to part with up to $60. However, this is chump change compared to the aggravation that any case of ID Theft may cause.

Another protection against Identity Theft is to join a program such as LifeLock or join the National Consumer Rights Alliance, which provides Identity Theft protection and up to $25,000 of insurance protection for potential victims of Identity Theft.

If you have been a victim of Identity Theft, be sure to file a police report, and obtain a copy for use in fighting unauthorized transactions and accounts. Undoing an Identity Theft can be a time-consuming and costly undertaking. Do everything you can to protect yourself upfront.

Flash: Congress Tries to Recapture Bonuses Through Taxes

In what may prove to be one of the most asinine attempts at penalizing people for doing their jobs, each house of Congress has passed (or is considering) new bills that penalize companies that have received Stimulus (Porkulus) money and the employees receiving bonuses under contract.

If you missed the news, the House version of the bill (HR 1586) would impose a 90% tax on companies paying bonuses, and the Senate version would impose an excise tax of 35% each on the company and the employee, if the employee's household compensation exceeds $250,000. One would expect that state taxes would be at least 10%, thus taking away the entire bonus and returning it to government coffers, under the House version.

What the American people are not being told is that most of these bonuses are required as part of compensation packages that were negotiated and signed long before any bailouts occurred. The companies are legally obligated to pay these bonuses, and in some cases, the bonus comprises the majority of an employee's compensation.

The original Stimulus Package contained a provision that would have kept bonuses from being paid by Stimulus Package recipient companies. However, the Obama Administration didn't think that it would be legal to do this, so they removed the limitation from the package, over the howls of Republican lawmakers.

Now, the Administration is pushing for this new tax. Here is my question, "If it would have been illegal to block the bonuses, where is the legality of passing an ex-post-facto tax on this money?"

People have decried executive compensation models for decades. However, the reality is that companies cannot attract top performing executives without these compensation packages. The talent will simply go to another company that offers a better incentive package. This means that the companies that are already failing and that are desperately looking for new leadership will not find many takers.

Regardless of what version of this bill finally passes, look for a number of class-action lawsuits to be filed on behalf of the affected employees. The government will probably spend more money defending itself against the lawsuit than it would raise in new taxes. Since the government already owns 80% of AIG, it seems that Congress should be able to call a special Shareholders' Meeting, elect new Directors, and then voluntarily refund whatever amount of assistance they deem appropriate.

This is just a case of buyer's remorse, and it penalizes the wrong people. Should executives get a bonus for running a company into the ground? Of course not. However, in the AIG example, over 400 people are receiving bonuses. I have to think that not all of these people are in senior management positions of executive-level responsibility. Many of these people are probably regular working stiffs, who depend on this bonus to round out their incomes each year.

I have worked in businesses where I received a bonus based on what I accomplished during the year. I would always work hard to ensure that I qualified for my bonus. If the guys at the top screwed up the company by not doing their jobs, why should I get shafted, when I did the job I was hired to perform, and earned the bonus for which I was eligible? What if this was you?

I invite and welcome your comments.

This is the Perfect Time to Fix Your Credit

We have all read the headlines about the current economic crisis. We have seen the “Stimulus” packages passed. We have all wondered aloud, “What is in it for us?”

Well, on an individual basis, you may have a lot of ways to take advantage of the current economic situation. Opportunities abound if you have a fist full of cash and/or excellent credit. The sad reality is that most of us have neither. While I could write about a number of ways to fill your hands and pockets with cash, this article is about fixing your credit.

You see, if you don’t fix your credit, your ability to put cash together to take advantage of opportunities will be limited. We live in a credit-based society, and many items are overpriced due to the availability of credit. Do you really think that homes and cars would cost so much money if people had to pay cash for them? Of course, they would not cost so much!

The burning question then is “how to fix your credit?” You have two choices: 1) Do it yourself, or 2) Hire a professional. Let’s think this through.

If you opt for the Do-It-Yourself route, you need to do a lot of research. Why? The decks are stacked against you. Every American wants perfect credit. If it was so easy to fix their credit themselves, they would have done it by now. Instead, the average American’s credit score has been dropping each year at a record pace. The average American’s credit score is now 678, when it was over 720 just three years ago.

You could research the credit laws, pore over case histories, and study the various Federal and State Acts and laws that have been enacted to protect your consumer rights. You could write brilliant letters espousing your innocence against the spurious allegations against you that say that you do not honor your commitments and pay your debts. You could keep meticulous records, building evidence for lawsuits that you would later file against your creditors, collection agencies, and credit bureaus.

The sad truth is that you could do all of these things yourself. The sadder truth is that you probably won’t. Most consumers make a brief effort to write a couple of letters and hope their credit reports will magically improve. Unfortunately, these feeble attempts rarely achieve the goals set by these same consumers, and they sadly give up, and face their fate. Even those who get proactive, take all the right steps, keep their documentation in order, and follow-through are in for a battle that could last two years or longer, and still not get the results they desire.

Your creditors, in concert with the credit reporting agencies and others, have spent a lot of money to back those very same Federal Acts and other legislation that supposedly protects your rights. Do you realize that these laws do little to protect you, but do a lot to protect those who disparage your reputation by saying you don’t pay your bills? It’s sad, but true.

In fact, the three major credit bureaus have spent millions of dollars in lobbying for laws that severely restrict the ability of third parties that would help you fix your credit. Nearly every state in the union has laws set-up to make it very difficult for a so-called “credit repair company” to exist and do business. Why would they fight so hard for this? The reason is simple, “The CRAs do not want you to engage professional help, because they know it works!”

Consumer Reporting Agencies exist for one reason only. They exist to protect the creditors and collection agencies who provide data to them and who rely on this data to make credit decisions. It makes sense that the CRAs would rather have inaccurate, negative data against you than to possibly miss something negative. Since your creditors use the data provided by the CRAs to turn down all but the most solid risks, it is in the best interest of the CRAs to ensure that ALL potentially negative information about you is reflected on YOUR credit report. If the CRA told your creditor that you had a very low risk of default, your creditor gave you a loan, and then you defaulted; it makes them look bad!

This is why when you try to get the CRA to remove any adverse information (regardless of merit) they do everything in their power to avoid removing the item. They stall. They force you to jump through hoops. They ask for more information. They simply tell you that the creditor has confirmed the information as accurate. They tell you that your dispute is frivolous.

They do all of these things, because they know that you will probably not follow-up. They count on the fact that you do not know your rights, and that puts you at their mercy.

This is why you need PROFESSIONAL help. A professional has seen all of these tactics. A professional knows the laws that protect consumers. A professional can cut through the stalls, and attack the CRAs and your creditors using the laws in YOUR favor.

Sure, you could do the work yourself. However, I don’t know a single cardiologist who would do her own angioplasty. A professional should be able to get results for you within three to six months, rather than the two years or longer it might take you to do it yourself. Considering the cost of bad credit in higher interest rates and lost opportunities, it is an investment with a very high return.

Where and how do you find a professional? This is the difficult question. You can hire an attorney to do this for you, but that could cost you thousands of dollars. You could find a company that charges a low monthly fee to do the work (and their motivation to work quickly will be?). You could find an organization that charges a fair amount of money, but actually gets the job done.

Whichever route you choose, choose wisely, because credit repair organizations earned the bad rap they received back in the 90s by not performing. Things are much better now, but you need to choose your solution wisely. Do your homework. Ask the right questions. Contact this author for suggestions.

Help is available, if you know where to look, and whom to ask. Fix your credit, and then we can talk about how to use that access to capital to start building your wealth.

How the Stimulus Package Hurts Real Estate

We all know that the economic stimulus package exists because real estate crashed. Now, I am working on another article that will detail and explain how we got here, but that is a story for another time. The Economic Stimulus (Porkulus) Package contains several key provisions that directly affect real estate.

Now, the National Association of Realtors feels that anything that reduces the prices of houses is a bad deal. Their argument has some justification, because when the price of a house reduces to a value less than the obligations (liens, mortgages) standing against it, then we have a recipe for foreclosure. However, that is not their real motivation. Lower housing prices mean lower commissions, as most commissions are based on a percentage of selling price.


Personally, I think that we should be looking at housing affordability. In other words, what combination of factors will allow MORE people to actually be able to OWN homes? We need a combination of low interest rates, favorable mortgage terms, and low housing prices.

The problem in all of this relates to how housing prices are set by the marketplace. The rental market has an impact on this, because most people who are looking to buy a first home currently rent a house or apartment, and they will be trading a rent payment for a mortgage payment. They will also be divesting themselves of some level of their personal savings for a down payment and/or closing costs.

A person who is accustomed to renting will take a look at the family budget, and determine what amount can be allocated toward a mortgage. Most people overlook all of the extra costs that go into owning a home, including taxes and insurance, maintenance, water, trash collection, etc., but we’ll ignore those costs for the moment.

If a family determines that they can afford $1,200 for a mortgage payment, they will volunteer this fact to their mortgage broker and Realtor®. In turn, a determination will be made as to how much house that family can afford. If interest rates are at 5.75% (a currently available fixed rate), then this relates to a principal amount of about $207,000. Assuming that the family has the proper down payment of 20%, this means that the family can afford a house valued at about $260,000.

Now, the Realtor’s job is to find a house for which the family is willing to spend $1,200 per month. So, the family will look at the marketplace of houses, and determine from the range of homes available, which is worthy of their $1,200 per month budget. As a result, all houses in the market that justify a monthly expenditure of $1,200 will be worth about $260,000. This is a simplistic depiction of how retail housing prices are set.

What can complicate this scenario and formula is when the government (or the Fed) steps in to try and affect the housing market. Here are some items in the budget, which are supposed to help the housing market. Analyze each, and try to determine what effect each will have on the cost of housing. Then, determine the effect each measure has on the affordability of housing:

1. An income tax credit for first-time home buyers of $8,000 2. A reduction in the mortgage interest deduction for families earning over $250,000 per year 3. $100 down payment mortgages on FHA loans to buy HUD repos

1) An income tax credit for first-time home buyers will increase the price of houses by making more money available for the purchase. In other words, no one likes to leave money on the table, and the sellers will grab whatever is there. The downside to the credit is that it is only applicable to purchases that occur by first-time home buyers in 2009, which eliminates a large part of the buyer pool. In addition, the credit won’t be received until 2010, so it is not available for down payment money.

2) Lowering the mortgage interest deduction will actually reduce housing prices, because the net cost of ownership in high-cost areas will increase, when those capable of making the higher payments have a higher net cost of ownership, due to this tax increase (Note: A reduction in tax deduction has the same effect as an increase in tax).

3) $100 down payment mortgages increase the prices of homes by increasing demand. The offset here is that this program only applies to homes that have lost value and been subject to short sale/HUD sale auctions. The lack of a down payment does not reduce the price of the homes, but this will help to provide a bottom for housing prices in some markets.

This gives us three proposals, all of which will increase the net cost of buying houses, and decrease the affordability of those same homes. If the government did not get involved, housing prices would continue to fall, thereby making homes more affordable for everyone. Oh well, at least the government tried to help out.

Special: 12 American Solutions for Jobs and Prosperity

SPECIAL NOTE: This post was to have appeared on February 19, but was lost due to a technical issue. It now appears in its entirety.

Dear Readers:

Recently, I received the following announcement from American Solutions, an organization led by former House Speaker Newt Gingrich. While I don't always agree with Newt, and I don't agree with everything mentioned in this plan (see my comments in red italics), this is a much better start than the pork-barrel bailout that the Democrats have forced upon the American taxpayer. The American Solutions article begins after the message from our sponsor.

Washington solutions of more money for more government, more power for politicians, more debt, and more bureaucrats will not lead to real growth in jobs and prosperity.

We need a clear and decisive alternative that creates jobs and rewards work, saving, and investment.

1. Payroll Tax Stimulus. With a temporary new tax credit to offset 50% of the payroll tax, every small business would have more money, and all Americans would take home more of what they earn. (This would add some fairness by eliminating the self-employment tax, which unfairly burdens small business owners. I would prefer to see a permanent elimination of the self-employment tax, coupled with an individual investment account provision.)
2. Real Middle-Income Tax Relief. Reduce the marginal tax rate of 25% down to 15%, in effect establishing a flat-rate tax of 15% for close to 9 out of 10 American workers. (This would actually help Obama keep one of his campaign promises.)
3. Reduce the Business Tax Rate. Match Ireland’s rate of 12.5% to keep more jobs in America. (This lowers the double-taxation burden on corporations and should spark an increase in equity investments. This would also serve to lower bond interest rates, thereby increasing bond prices. This could lead to a rare, simultaneous increase in equity and bond prices, providing overall economic growth. A serendipitous benefit to this would be a decrease in inflation, as businesses would not have to offset their tax burdens by charging higher prices.)
4. Homeowner’s Assistance. Provide tax credit incentives to responsible home buyers so they can keep their homes. (I don’t totally agree with this measure, as it will artificially inflate housing prices. However, with all the giveaways for irresponsible home buyers, something had to be done to make things equitable for the rest of us.)
5. Control Spending So We Can Move to a Balanced Budget. This begins with eliminating Congressional earmarks and wasteful pork-barrel spending. (A balanced budget is not always the best way to stimulate the economy, but we need to severely reduce wasteful Congressional spending, so this is a good idea on the whole. A line-item veto would usually help here, but with a Democrat-led Congress and a spendthrift President, it would be of no consequence now, as evidenced by the $1.2 Trillion spending package signed last week.)
6. No State Aid Without Protection From Fraud. Require state governments to adopt anti-fraud and anti-theft policies before giving them more money. (This is a good idea. The question here is “Who pays for (and conducts) the investigation and enforcement?” Is it possible to expand this to include accountability for money given to foreign governments?)
7. More American Energy Now. Explore for more American oil and gas and invest in affordable energy for the future, including clean coal, ethanol, nuclear power and renewable fuels. (Always a good idea. We need to get away from fossil fuels in order to clean the air and shore-up our economy. The problem is the big money interests (Energy, Auto Makers) who don’t want to pay for the change.)
8. Abolish Taxes on Capital Gains. Match China, Singapore and many other competitors. More investment in America means more jobs in America. (This is an obvious move to spur investment. By the time you pay taxes on your income, your interest, and your capital gains, it hardly seems worth all the effort. I would also like to see a repeal of the Alternative Minimum Tax (AMT) or at least an inflation-adjustment to the income trigger.)
9. Protect the Rights of American Workers. We must protect a worker’s right to decide by secret ballot whether to join a union, and the worker’s right to freely negotiate. Forced unionism will kill jobs in America at a time when we can’t afford to lose them. (Unions helped build this country in the last century. They gave us the 40-hour work week, workplace safety measures, and numerous other employee benefits. Unfortunately, unions have become more of a bane than a benefit, and they have outlived their usefulness in most industries. When unions get so greedy as to actually begin to destroy the business model of the companies that employ the union’s members, then we have a problem. We should also eliminate the unions of all government employees immediately.)
10. Replace Sarbanes-Oxley. This failed law is crippling entrepreneurial start-ups. Replace it with affordable rules that help create jobs, not destroy them. (Corporations spend hundreds of millions of dollars annually just to stay compliant with these worthless regulations. Accountants love it, but no one else is benefiting.)
11. Abolish the Death Tax. Americans should work for their families, not for Washington. (Absolutely! You work your whole life to build your estate. You pay taxes on your income, interest, investments, and even on your Social Security. After you die, the government wants to take up to 90% of everything you created during your lifetime, even though they already taxed you all along the way. Eliminate this unfair burden now!)
12. Invest in Energy and Transportation Infrastructure. This includes a new, expanded electric power grid and a 21st century air traffic control system that will reduce delays in air travel and save passengers, employees and airlines billions of dollars per year. (This is a no-brainer. In the 1970s, states and the federal government spent billions on the National Highway System and local roads and bridges. Now, these throughways have fallen into disrepair, and they are largely obsolete. I would also like to see a relaxing of the environmental impact reports and other useless requirements that delay these projects for up to ten years or more. By the time most projects are completed, they have cost over twice as much as the original budget, and they turn out to be too little, too late.)

If you would like to learn more visit www.americansolutions.com. You may endorse this program at their website, and you may also read more about this and other initiatives of the organization.

For those of you who were waiting for my regular article last Saturday, I apologize, but my significant other had different plans for me on Valentine’s Day. I will be posting periodic comments on the Economic Porkulus Bill, which Obama signed yesterday, as I have time to go through its various entitlements. I have no faith that this bill will do anything to stimulate the economy, but it should be a boon to campaign donations to the Democrat Party.

Until next time, enjoy life, and watch your wallet!