Tonight I had the opportunity to watch the State of the Union; which outlines Bush’s final plans for America in the coming year. As the President’s final months come to pass, he is also trying to set some of his legislation chiseled in stone. Of course I am referring to his tax cuts that he introduced in 2001 and 2003. Here is just someone’s opinion on what the tax cuts could do if they are implemented in the tax code for good.

“If Congress makes the tax cuts permanent, the major economic benefits begin in 2011. For example,

Total employment will rise by 1,087,000 jobs per year, on average;
Annual GDP will be over $111 billion higher, after inflation;
Personal savings will grow by $163 billion per year, on average, after inflation; and
After-tax household income will grow by an annual average of $274 billion per year, after inflation.”

Am I true believer of the tax cuts that the Bush administration has put into place over the past eight years? Take a wild guess? No, of course I don’t. Do I believe in lowering taxes? Hell yes I do, but the administration is still going about it the wrong way. I’ve said this over and over now, but the mainstream media still won’t cover the real long-term damages that these tax cuts will have on America without cutting spending. How does the government really expect to purchase all this fancy military equipment without increasing taxes? I am not in favor in cutting military budgets, by any means. I would love to see an increase in domestic military spending and a large decrease in international spending though. It’s like the game of ‘Risk.” It’s much easier defending your boarders than to have your armies spread out all over the map. The Bush administration needs to cut their credit card in half and burn it.

People need to understand that I am not in favor of increasing taxes. I truly believe that raising them will inevitably throw us into a depression, but we must lower our spending habits to save our nation’s future. My first idea that the government could implement that could save them a lot of money, while also cutting taxes for all Americans, is lowering government spending in the private sector.

There are many government programs that tax every single business, but only benefit a few. Here is just an example that helps one industry, but damages another. If the government gives a 10 billion dollar grant to an oil company for global expansion, this will inevitably hurt the alternative oil industry. What happened to the invincible hand of economics that we’ve preached about in econ classes for so many years? Here’s a quick definition - “Smith claims that, in a free market, an individual pursuing his own self-interest tends to also promote the good of his community as a whole through a principle that he called “the invisible hand”. He argued that each individual maximizing revenue for himself maximizes the total revenue of society as a whole, as this is identical with the sum total of individual revenues.”

The other factor here is that every single business will have to pay for some of this “free” grant money. A small business owner in Georgia that makes doo-dads will not see a return in this situation. All they will see is a tax hike in their quarterly payment. Imagine this scenario but a 100 times larger. Government spending has corrupted our nation and truly damaged our economic future. We need to let business fuel themselves and add the real sense of an American meritocracy. In a perfect environment a large business would loan a company the 10 billion dollars and expect some kind of return. That is the true sense of American investing. Business investing in business for the betterment of both parties.

Can we really get out of this hole we’ve dug by implementing tax cuts and still allow rampid spending? Something needs to change… What do you think? What do other people think?

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With recent months as economically challenging as they have been for the mortgage and lending industries and the housing market, it should come as no surprise that expert economists and financial thinkers are keeping a close watch on the credit card debt situation. Many are concerned that credit card debt could experience a similar bubble burst type of disaster, meaning even more losses for financially struggling lending institutions.

According to a widely published January 23, 2007, Associated Press report, Capital One experienced significant fourth quarter profit loss. One of the nation’s leading credit card companies, Capital One saw a 42 percent reduction in profit as compared to the previous year’s fourth quarter earnings. American Express also, according to recent reports, experienced fourth quarter losses of just under 10 percent. Some fear that this could be a part of a trend, as financially strapped consumers struggle to make ends meet.

The New York Times recently reported that “credit card debt is growing at the fastest rate in years,” pointing out that the rate of growth “may signal coming trouble for the banks that issue them.” According to MarketWatch.com, this increase in debt seems to be because “consumers loaded up on credit-card debt to make up for a loss in the purchasing power they once wielded by refinancing mortgages during the real-estate boom.” Delinquencies in credit card debt payments are starting to edge up, and not only among those with bad credit.

Lenders and investors throughout the word are still staggering from the blows they took during the bursting of the housing bubble and the mortgage and lending meltdown, and most economists agree that neither of those situations have reached bottom yet. With the potential financial danger involved with a similar crisis happening in the credit card market, there will be many eyes – those in America and beyond – watching those numbers during the next few months.

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Now that the Fed cut the rates again, what do you really think will happen? Is this short-term vaccination going to bring a long-term disease? I would have to say YES! Can we seriously keep on prolonging the real issue any longer? Our nation is in over 9 trillion dollars in debt and people still think that a 150 billion dollar tax check will end up fixing our economy. This is the craziest thing I’ve ever heard. With interest rates going even lower, our debt increasing everyday and our national budget is still out of control, yet the government still wants to give out money…. How is this fiscally able to happen without kicking our country in the a$$ in the future?

What type of package do you think the federal government should implement without stubbing the toe of the American economy? I really haven’t seen anything that jumps out at me. There really isn’t any long-term plan that seems to be important enough to really cover. The stock market is not only going down because of the consumer credit market. It’s also going down because investors are taking a lot of money out of American companies and investing it abroad. They are scared that the 9 trillion dollars will end up killing the American economy in the long run.

Instead of trying to increase the dollars value and decrease our debt, analyst want us to reduce rates so low that we end up in the same situation we were in five years ago -an artificial housing boom that ends up hurting our country even more. It’s pretty amazing to me that no presidential candidate wants to talk about our national debt because everyone is so consumed about our short-term economy, the war and healthcare. We won’t even have a country if we do not correct the wrongs of the past.

Here’s my idea  

-Slash international spending

-Slash domestic spending

-Lower taxes for all Americans

-Reform our current tax system to increase domestic investments

-Remove the capital gains tax (increases investment activity)

-Increase Federal spending on education (if there’s any type of government spending I believe in, education is the way to go.)

-Cut the corporate tax code to increase business activity in America

-Reform Social Security and Medicare

 
What do you think?

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Are we really in a recession or has the dream bubble burst? Did we really expect the housing market to always go up with no top on the horizon? Come on now… When I was working at the bank and I was supposed to sell home equity lines and loans to clients that had about 30% debt to income ratio, I knew something was going to happen. Our software actually promoted the idea to sell loans to people that were in the 30-40% debt to income range. I was a simple “banker” (really just a fancy word for salesman of financial products) and I could see what was going to happen four years ago. It just amazes me that financial institutions were so leveraged to the mortgage business even though a high school student with one semester of forecasting could predict it blowing up.

This situation does not have to get you down though. This market had a self-destruct button and it was hit a long time ago. Companies did this to themselves and the ones that can’t take the heat are going to be burnt. Badly burnt. But as you know, there are plenty of companies that are just getting brought down by the huge sell off that’s been going on for a while now. Some companies that seemed too expensive just a few months ago are now extremely cheap. It’s going to me hard making a positive return in this market, but you can certainly build a nice position while the market is low. Dividends are a huge key to be successful in this market, but there are plenty of other ways to get a pay off. Diversification could be a winner here if you choose the right fund. Fidelity reopened the Magellan fund; which brought some nice returns even in a pretty crappy market in the 80’s and 90’s. Fidelity is opening up the flood gates for new investors and maybe you should be part of the rush.

I know it seems depressing when you turn on the TV and all you see is the Dow sinking even further. I wouldn’t recommend putting all your money in one stock or purchasing a ton of stocks at one time. You need to purchase slowly and keep buying even if the market keeps sinking. The best idea is just let an index fund do everything for you. Just keep on dumping $300 dollars a month (if you can) in an index fund that is spread over the S&P 500, raw materials, minerals, and petroleum. The stock market will go up and you just need to buy it as the market goes down. There will be a U-turn at some point and investors will be happy that they bought when everyone was selling.

I also think that boom markets will be produced from this mortgage disaster. There’s still a lot of older people out there that are about to retire. This situation alone will send up certain sectors to new highs. Medical and anything influenced by an aging population will send stocks soaring. And because the whole market is hitting new two year lows, this offers the opportunity to own lots of stocks for real cheap. Happy investing and I would love to hear some new investing ideas you might have.   

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This is my first week in the Capitol and things have been a little hairy to say the least. I come to you this morning from the Senate Chamber on Day 3 of the 2008 Legislative Session. Here’s a little recap of what has happened so far…

Day 1 there were fireworks for the first time in 34 some-odd years. The House overrode 12 of the Governor’s vetoes from last session and the Senate has refused to take the issue up. Hopefully, we can see at least some action on those today. Among the overrides is HB 559, a bill put forth last session that would allow charter school teachers access to the state benefits plan, just like all other public school teachers — because remember, charter schools are public school! To the Senate, if you want to show you are not the Governor’s lapdog and override the veto with the House for one bill, do it on HB 559.

Day 2 saw HB 881 move out of the House Charter Schools subcommittee into the full Education Committee. The full committee will vote on the measure in the coming weeks, most likely after budget hearings next week. This is step one of many for this very good bill that would give a better shot to charter school petitioners whose applications are victims of political posturing by local school boards.

Day 3 begins today with a Senate session at 10:30am and the House reconvening at 1pm, followed by the Governor’s State of the State address to a Joint Session at 2pm. It will be a busy day with plenty of opinion and information out there all to digest.

Tomorrow, Day 4, will see a gutted gun bill come to the Senate floor for an up-or-down vote. This issue pitted the 2nd Amendment v. private property rights and it will interesting to see NRA response, as well as response in general, especially if the measure fails.

Overall though, the first session in the Capitol has been most interesting. It is quite a place and I get all warm-hearted seeing representative government at work. I’m sure there will be frustrating times ahead, but that’s all part of the territory I suppose. Win or lose though, what an experience, I’m so lucky to be here!

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So how’s everyone’s New Year been going? My life has been packed full of new experiences and fun times. As I mentioned before, I am trying to do things that I shunned in the past. Recently, I had the opportunity to shoot some guns. Yes, I practiced my 2^nd Amendment right as an American (or something like that). Originally, I had no real desire to ever shoot a gun, but now I do have a new found appreciation for them. My friend and his uncle brought me to a firing range and I got to fire a plethora of hand guns and some pretty awesome WWII rifles (and yes I did say plethora). Not many people get to fire some of the weapons I fired; which is pretty cool in my book.

At first, I fired a hand gun which made me extremely nervous. I fired the whole round and gave back the gun to my friend (barrel away from my friend of course). After he wiped off the large amount of sweat from the handle, he gave me another revolver. The first gun was honestly drenched in sweat because I was so nervous. The second round went much better. I was a lot more accurate and the gun had a lot less sweat after I was done with it. The rifles came out last and concluded my day. Overall, the experience was a lot of fun and I understand why people go to gun ranges. Sometimes acting like Rambo (in a totally non-violent way) can be a lot of fun. No one got hurt unless you count the paper targets I shot at. It looked a lot like Swiss cheese after I was done with it! Nice…..

What did this situation teach me about life? First, I learned that new experiences can make you extremely nervous. But giving it some time and allowing it to sink in, can really make the whole thing a lot of fun. Some things that you previously made a negative judgment on could be something you end up loving. This is the mentality you should have with every type of life experience. Remember that each day comes bearing its gifts. Untie the ribbons.

You can live your life avoiding all of life’s little surprises or you can ask for seconds. In a time where the news only has negative things to report (I know, when did they ever report anything positive), this is the time to have a lot of positive things going on in your life. Surround yourself with people that bring you joy and promote a positive lifestyle. Try to experience new things as much as possible and always try to draw a positive conclusion. For instance, I had a horrible time when I first moved to Orlando, but the story that came from it is priceless.

Life is a combination of the good and the bad. People have the choice to either take in the good and disregard the bad, or take in the bad and disregard the good. It’s your choice, but it’s a lot sunnier on the good side. It’s a pretty amazing thing when you look at life with a positive mentality. Why don’t you try it today? You have nothing to lose and everything to gain. Always try to do something that not many people have gotten to do before. But remember, keep it safe and legal!

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Could there actually be a positive side to the market’s recent implosion? It’s hard to look at the sunny side when it seems like a dark cloud is always hovering around. But I still think that you could eventually make some good money while the market corrects itself. This is a perfect opportunity for younger investors to purchase stocks of great companies at their lows. For the young investor it’s much more important to create a position and let it ride back to the top.

Great companies are still paying out healthy dividends which will be reinvested at their low share price. You can establish a small position and let it grow for the long term. It’s like growing a tree. First, you plant the seed (purchasing shares). Second you take care of your plant by watering it and providing shelter (reinvest the dividends and keep on purchasing shares). Eventually, you will end up having a big ol’ tree (a nice position in a good company).

The market has so much opportunity right now that it’s craving for some buyers. You can try to play it smart by purchasing and investing for the long-term or you can try to be a market timer and probably lose. No one ever got rich by purchasing shares at their highs and selling them at their lows. So please take advantage of the huge “fire sale” the market is giving us and buy some shares of some good companies.

The financial sector got killed this year, so their might be some good buying opportunities with good conservative banks. SunTrust for instance, got knocked down with their peers even though they still have a pretty clean balance sheet. They are paying a 4.9% dividend and are at a three year low. It’s still a great bank with excellent fundamentals.

Of course there are many other companies that I would buy if I had the money to invest. My personal favorites are still companies that are paying dividends because they offer long-term position growth. Right now, I would rather buy Microsoft than Apple because they pay out a dividend. It’s much easier to build a position when the company offers the investor an incentive to be a shareholder.

The other company I like, while their share price is getting beat up, is PWE. They pay out that nice dividend which will help the investor build a position very quickly. Remember to reinvest the dividend for maximum growth potential. The company also pays out their dividend monthly which is an added bonus. There are plenty of other Canadian oil trusts for the picking, but I still think there is more upside with this company.

The market is offering investors long-term buying potential. Young investors have the ability to make a lot of money in this market. If you have the ability to invest, invest in companies that are getting knocked around, but still offer a bright future.

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Come on, did you really think that we could get through an entire election cycle with a guy named Huckabee in the race and not reference that movie?

So Mike Huckabee took the who cares Iowa caucus yesterday. OK, great win for morale of the troops, but what else really? New Hampshire is in four days now, so expect that overplay as well. But at least that is an actual primary. To me, there is something perverse about the caucuses, especially for the attention they get. Basically, each members of the community belonging to each party gather in a room and talk about who they want to be president, logging in a vote. For the Republicans, it is one man, one vote. For the democrats, they have a screwy system where if your candidate doesn’t place in the top three, then your second choice is logged in as your vote. Talk about skewed results.

I think the obsession with Iowa is that everyone wants an edge in political reporting. Well, you are following a red herring folks. I am not a dem so I can’t speak for them but I think if you really want a good indication of how the Republicans will eventually fall into place you should take a look at what happens in South Carolina in a couple weeks. Here is the first primary in a decent sized state with a decently representative population. And it is especially important for the Republicans. This is where the true conservatives are. That is a vote they don’t want to lose.

My predictions? You have not seen the end of Guliani of course. He endeared himself to me quite a bit by not playing in this Iowa business, seeing how much I am not a caucus fan. Don’t count out John McCain either. The defense angle still plays very well with many conservatives, although his immigration views may get him in trouble in an illegal-laden south. Here’s the word on the street though…if Fred Thompson ends up dropping out, which seems likely sooner than later, he may throw his support behind McCain. Don’t underestimate that union. There is still support for Thompson out there, media coverage or not. Right now, if I had to pick, John McCain is my guy, but not by much. Let me put it to you this way–if I was giving my free time to a campaign, it wouldn’t be to any of them at this point. They just haven’t differentiated themselves to me yet. We’ll see though. Cannot wait for South Carolina!

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In an unbelievable turn of events, the New York Times, the most openly hostile newspaper to the views of anybody remotely conservative, has published an article today that looks at the social science behind global warming and delves into some psychological reasons for the hysteria. And of course, what would a decent article be is we did not include some fact-busting and questioning of the unquestionable, Al Gore.

John Tierney conveys the sentiments about global warming that I think many conservative-types have:

“’Many people concerned about climate change,’ Dr. Sunstein says, ‘want to create an availability cascade by fixing an incident in people’s minds. Hurricane Katrina is just an early example; there will be others. I don’t doubt that climate change is real and that it presents a serious threat, but there’s a danger that any ‘consensus’ on particular events or specific findings is, in part, a cascade.’

“Once a cascade is under way, it becomes tough to sort out risks because experts become reluctant to dispute the popular wisdom, and are ignored if they do. Now that the melting Arctic has become the symbol of global warming, there’s not much interest in hearing other explanations of why the ice is melting — or why the globe’s other pole isn’t melting, too.”

And:

“The planet has indeed gotten warmer, and it is projected to keep warming because of greenhouse emissions, but this process is too slow to make much impact on the public.”

“When judging risks, we often go wrong by using what’s called the availability heuristic: we gauge a danger according to how many examples of it are readily available in our minds. Thus we overestimate the odds of dying in a terrorist attack or a plane crash because we’ve seen such dramatic deaths so often on television; we underestimate the risks of dying from a stroke because we don’t have so many vivid images readily available.”

As a result, activists hijack the cause, as Al Gore has done, and made things appear to be much worse than they are to push a certain set of policies on a gullible public that is unknowing of the facts. Anyway, it’s a very good article, John Tierney writes good pieces anyway.

On another note, if we use such great science to measure the effects of greenhouse gases on warming, why are carbon reduction goals always always always a percentage divisibile by five (e.g. 30%, 45%, etc.)? Look, I may have gone to Tech for international affairs, but I did my fair share of science, hell I was an engineering student for my first year and a half there. Not once in my calculations did a number come out to a five divisor. Not once. If we are truly looking to stem the tide with minimal economic damages, don’t you think we would have at least one 26% goal in there? Just a thought. And this goes for all sectors, we see it in government all the time. What is the obsession with whole numbers on the fives?

Enough for now, read the Tierney article, it’s something to think about. And we can solve the global warming issue without hysteria and radical economic effects, as the worldwide environmental protocols and calls for a heavier government hand in the private sector would produce.

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Should you really shy away from a big night or take financial hit for a good time? Most savvy spenders will say “you can have a great time and still be on a budget.” While this is true, I still think that splurging once in a while for a good night is definitely worth it. For New Years, I attended an all-inclusive party which had a pretty nice price tag before you were allowed in the hotel. The tickets were on pre-sale for $170.00 before December 15^th and $205 after the 16^th. Fortunately, I searched on Craigslist and found a ticket for $140. It never hurts to make sure you are getting the best price possible. But this was just one of many purchases I would make that day.

Because I traveled back up to Atlanta for the holidays, I didn’t have access to nice clothing. I had to purchase some black shoes, and pants for the party so I didn’t look like a scrub. I was also in a time crunch so I had to purchase the “nice” clothing at Wal-Mart. Yes, Wal-Mart. I was pleasantly surprised that they had some nice clothing for under fifty bucks. Now my price tag is almost two hundred dollars for one night of fun and I haven’t even showered yet. Was it worth all the hassle and money? Of course it was. I realize that I won’t be doing this every night, so I decided that it was a great opportunity and I shouldn’t be worried about the price tag.

A lot of people get so consumed with money that they forget that having fun sometimes comes at a price. Money doesn’t always buy happiness, but it sure does help. I could’ve found a house party which doesn’t really cost much at all, but I’ve done that so much in the past. This year I am trying out new things that I’ve never experienced before and I have to say that it’s going really well. This lifestyle is a little more lavish than my life in 2007, but it is fun and interesting. I am not going to jump in a mound of debt because of the new lifestyle, but I realize that I won’t be saving as much as I used to. Sometimes you got to take one for the team though. I have all my life to save and make money, but I am only young once.

My New Years resolution isn’t saving money, increasing my income, or trying to pay down some of my debts. It is on the other hand, trying to have as much fun and excitement within my means. I know my views on life and finances are changing a lot right now, but my life changed a lot in the last quarter of 2007. Maybe later on this year I will be able to have as much fun as possible and save money (which would be totally awesome). Remember that life comes at you fast and if you don’t try to make the best out of every moment, you might miss out on something huge. Have a great New Year and let’s make 2008 even better than last year.

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