Hedge Fund Performance Fees: Managers Should 'Eat Their Own Cooking' [View article]
In terms of handling individual's accounts and money I agree with you.
I disagree with you in regards to government pension funds. Much of what hedge funds participate in are "zero sum games" - hedging, shorting, currency swaps, etc - someone wins and someone loses. The only long term "winners" are those that get a percentage of each transaction. Due to the compensation structure, these hedge funds get 2% of your pension $ in administrative fees and 20% of all winnings.....
Now consider the scenario of hedge fund A, and hedge fund B. A has money from the Nebraska public employee fund and B had money from the Illinois teachers fund. They each bet the opposite on a currency trade. Fund A "wins" and earns 50%. Fund B "loses" and loses 50%. But Fund A doesn't increase by 50%. They only increase by 40% as 20% of the 50% gain goes to the hedge fund. But overall public pensions have just decreased by 7%. Replace the percentages with $'s and you have Fund A going from 100 dollars to 138 dollars (100 + 50 winnings - 10 winning fee - 2 admin fee). Fund B goes from 100 dollars to 48 dollars (100 - 50 losses - 2 admin fee). So the hedge funds as a whole took in 200 but only return 186. Is the public at large better off?
This is why you occasionally read about funds paying for contacts with state pension fund managers - the numbers are so big that they can afford to pay a million or two to a guy who knows a guy.
So individuals I agree can do whatever the heck they want. But Public pensions should really be looking to invest their money, not making bets in a casino that guarantees the "house" (being the hedge funds" wins.
Hopefully this also shows how/why trading with other people's money increases the "acceptable" risk in the market. Other than your reputation, fund managers don't have anything too lose....... except your money!!! But everything to gain by taking outsized risks......
With news that the deficit will top $1.4T again this year and next, Derek Thompson looks at debt-to GDP and says this isn't your grandfather's burden: former heavy indebtedness was caused by wars or recessions that came to an end, but now it's about inside factors (promises to seniors made years ago). [View news story]
What is encouraging about the graph is that it shows the problem we currently have is fixable. Just as wars ended, so to must our current fiscal policies.
Unfortunately, none if this will end until 1. We elect some adults - independent of political party willing to discuss rationally the truth of the situation and make choices that involve sacrifice. 2. We ban special interest groups from participating in that process. 3. We ourselves accept that the tough choices don't include the idea of "fairness" - yes we should strive to be fair but more importantly we have to take real action.
I agree with the comment regarding how many lawyers, accountants and bureaucrats do we need.... the answer is a lot less than we currently have. The way to decrease the demand for these non-value added resources is to simplify our tax codes, eliminate special deductions, and eliminate the requirement to involve lawyers in many things. And we have to commit to reducing government services and cut the pay of government employees. That means taking on the unions, and quite frankly means telling bureaucrats the truth - their pensions will have to be drastically cut, their health care must be partially paid for by themselves and they are currently overpaid in general. This should spur many bureaucrats to leave and seek greener pastures - in doing so they should be creating new businesses and spurring innovation and create jobs - two things they can't do as bureaucrats.
I don't agree that only 10% of American families own their homes outright - I believe that figure is higher - mid 20's or 30's %. I only comment on this as it points out that a decent portion of our population lives well within their means. Its not difficult to do, and we must re-create the expectation in this country that you generally have to provide for yourself. This doesn't mean eliminating all social safety nets, but it does mean cutting them back. As late as 1980 people saved 10% of their income. Why? Because there was no implicit nor explicit expectation that the government was going to take care of your individual problems. And we need to gravitate back towards that philosophy.
Social Security retirement age needs to be raised to 72 in the next five to seven years. Early retirement raised to 67. Is it fair for everyone? No, But it needs to be done and quickly. We need to means test the program so that those in the top two income brackets in retirement only receive partial benefits.
We need to cut military expenditures. We will have to sacrifice or cut back some weapons programs. And we will have to close some bases around the world. It doesn't mean pulling back to our borders but it does mean questioning why we need to have multiple bases in places like Germany and Japan.
We need to have a program like Clinton had where all government bureaucracies are reviewed, and overlapping and redundant agencies are closed and cut back. The same for legislation and regulations that have outlived their purposes.
Simplifying the tax code and eliminating all deductions would be a great way to boost government revenue. Under our current system we will see an increase in tax avoidance after the huge government bailouts. People can clearly see that the current system is rewarding only politicians, financial elite, and bureaucrats. This increase their "justification" for not paying all the taxes they should. Unless there is a huge change in the tax code that simplifies it and keeps out special interests we'll develop a much larger "underground" economy.
And finally, we have to radically reduce spending on health care. And there aren't easy answers here. We have medicines and procedures that weren't available 50 years ago that are considered normal now. And they cost a lot of money. In 1950 people basically had access to similar health care no matter their income - yes there have always been differences between the rich and poor - but today the cost creates a social problem in terms of what people are "entitled" to in terms of their health. We have difficult choices to make about dieing. When and how much to spend on those close to death. We have to be willing to consider truly different solutions. Maybe there should be a tax on soda or junk food, or transfats, or even cable tv (leading to less activity) to cover some health care costs for the general public. I don't have all the answers but we have to be open to radically different ideas from what we have now. And in it all we have to emphasize personal responsibility.
While not everything can be done tomorrow - much can be. SS and the tax code are easily fixable if you remove special interests from the equation. Cutting back government can be started tomorrow. Cutting military spending can begin every time we consider weapons programs. It just shows how important it is that we vote out all the bums in November from both parties and vote for some people with common sense and a willingness to tell the truth - even when it involves making difficult choices and cuts.
The truth is that Americans aren't "entitled" to live better than those in other countries - we do so as a result of our freedoms and hard work - and the sooner we remember that the better off we'll all be.
The Trouble With Unfunded Entitlements [View article]
Unfortunately I'm not as young as you give me credit for :)
but fortunately I'm not as angry as you give me credit for either!
I think I'm only angry when I read the news!
And I'm perfectly ok and in favor of the brakes. We've had "fake" economic growth the past five years - totally on people spending borrowed money they shouldn't have had in the first place. And the only way to get growth back is to take the pain now and then go from there.
Finally, I'd agree that today there are others more hungry than myself (but not 15-20 years ago). But I'd suggest looking in Poland or Turkey or Russia or China or Thailand for those most hungry - India is a hierarchical society that doesn't lend itself to the idea of chasing absurd dreams. And for whatever reason those that are lower middle class seem the most hungry.... and while India is developing a middle class its still small in regards to the size of the country.
Permabear David Rosenberg offers 17 reasons to be bullish - seriously! But it's short-term, and the market is still a "meat grinder": "The bulls have the upper hand, but only until the next shoe drops in this modern-day depression..." Whew, that's more like it. [View news story]
Well I guess it depends on how you want your money managed and how much risk you can tolerate. We all have different goals and ideas in terms of our savings.
At least he didn't do what many supposed guru's did - they held risky assets through 2008 and as 2009 dragged into late Feb/march they proclaimed that risky assets weren't appropriate and switched into more conservative assets just when risky assets turned around. So perhaps it was dumb luck or perhaps he's actually got a backbone. Since this seems to be some sort of ongoing thing I'll just leave it at that and wish you good luck with your own investments :)
The Trouble With Unfunded Entitlements [View article]
No problem, and you can also have your pro-rate portion of the debt!
This is nonsense similar to the public unions claiming that their salaries and pensions are sacrosanct. Just as their pensions are going to be cut, so will your social security. Whether its through higher retirement age, higher taxes, smaller checks, etc... it will be cut.
And we are all going to pay for this mess. I don't care if your republican, democrat, independent, socialist, libertarian, communist, or a support of Lyndon Larouche (sorry to any of his supports as I'm sure I misspelled the name), taxes are going up - benefits are going down. The sooner we set about adjusting social security the less pain there will be. The sooner we adjust public employee wages, health care and pensions the less pain there will be. The same in the military and health care.
I understand people's fustration with the fact that certain groups and individuals have been the receipiants of government organized theft (financial elite on Wall Street, politicians, and bureaucrats) to the detriment of everyone else. But its been done. I didn't notice people storming the streets and taking over city hall or the Congress when the bailouts were going on - yes a relatively small group protested for a day or two but thats it. And don't kid yourself, until we demand changes (which will impact ouselves negatively in the short run) these traitors will continue to ruin our children's and grandchildren's future for their own gain. So we can play pretend for a few more years or we can get serious about the future of our country - and yes, it all won't be fair.
Permabear David Rosenberg offers 17 reasons to be bullish - seriously! But it's short-term, and the market is still a "meat grinder": "The bulls have the upper hand, but only until the next shoe drops in this modern-day depression..." Whew, that's more like it. [View news story]
Well I looked at the link but it appears to me that he's outperformed the S&P by 20% over the past two years??
I don't have dog in this fight but unless I"m looking at something incorrectly since he set up his fund he's outperformed.
Actually its long since past the time to bite the bullet.
We're a free country. If you want to work for forty or fifty years and not save anything for when your older - its your choice. But don't come crying to me when your 55 or 60 and suddenly you want someone else to provide you with a nice cushy retirement.
Should have given that some thought when you bought that 70K car when your were 38.... or when you decided to spend $200 a month on your tv cable..... or when you budgeted 10K every year for holiday..... or when you ate dinner/lunch out 5 times a week..... etc, etc.
Social security can be saved. It requires raising the retirement age quickly over the next 5-7 years to 72 normal and 67 early, reducing benefits, raising the cap on SS taxes, and some limited means testing (want to keep everyone receiving something so it isn't strictly a welfare program). No one will be happy but thats life.
As for medicare/medicaid its a more difficult problem due to the emotional and religious element of dieing. We spend too much money on dieing and until we admit it and start to identify what we will cover and what we won't the whole system will go broke. We need to focus "free" care on children and on diseases that aren't a result of personal behavior.
But the overriding message from government needs to be "Your responsible for yourself and your own situation!!!".
The true motive is to further intrude into every aspect of individual's lives......
Yes, there will undoubtedly be an increase in small businesses under-reporting sales over the next several years. While I don't think its right, I find it hard to be very upset about it. The government organized the greatest bank robbery in history itself!!!
The Wall Street crowd walked off with hundreds of billions of dollars and yet we are worried about a small businessman/women hiding 500 or 1000 bucks from the government?
All the legislation in the world isn't going to repair the moral hazard problem that the government itself has created. Everyone knows the politicians, bureaucrats and financial elite are the only ones that benefit from tax increases...... and if you believe that government bureaucrats earning 75% more than private sector employees, with free health care, and obscene pensions (see the California small city director that has a 500,000+ pension/year????) is wrong and theft from hard working people - why would you not try to avoid taxes?
When you throw right/wrong out the window as the government did with the bailouts and total lack of prosecution, its impossible to put the genie back in the bottle. People aren't that stupid and we know we've been screwed royally by those in government.
Elizabeth Warren: Apparently Her Bad Faith Extended to the Health Care Debate Too [View article]
I think thats overstated. I'm not familiar with the paper nor what it was used for. But I do know that its long overdue that some of the most abusive financial products and practices are put to rest.
Common sense would dictate that anyone with under 100K of income should be shown a 30 year mortgage payment plan in comparison to any other mortgage they might consider.
Common sense would dictate that banks cash checks in an order that is advantageous to the customer as opposed to whatever order will cause the highest charge.
Financial product innovation in the past 15-20 years has all too often meant finding ways to trick people into paying for things they don't realize they are paying for - or to pay small fees that actually are huge % charges but if your not so good at math you don't really understand what your actually paying. Its all nonsense and its long since time that banks focus not on raising fees but on making good loans that contribute to the growth of their communities and country.
And if we need someone that will zealously represent consumer interests for a period of time I'm ok with that - the banks have had free rein for 20 years and that sure hasn't worked.
The Trouble With Unfunded Entitlements [View article]
Its simple really, you've also been voting for politicians that have spent a ton more money than they've taken in. You can't take credit for one element of the federal fiscal situation (Social Security) that will benefit you but then decide to ignore the remainder of the federal fiscal situation that may not benefit you.... ie give me the social security but give someone else the debt.
The boomers have no one to blame but themselves. They have been part of the richest generation in human history and the idea that people (as a whole) were "just getting by" is nonsense - they got BUY would be a better summation - wasting trillions on government programs, wasting trillions on imported goods, vacations, homes that 40 people could live in, new cars, etc, etc.
The time has come for fiscal responsibility - not to benefit the boomers but to benefit our children and their children.
The Justice Department finds it too difficult to build a case against AIG's Joseph Cassano, whose mortgage market venture has cost taxpayers ~$180B so far. But the two men who ran "the Enron of Kansas" remain in legal limbo after seven years. Justice's "enthusiasm for prosecutorial vigilance" should be turned toward the "villains on Wall Street, instead of the two half-pints in Kansas," Opinionator says. [View news story]
How about we file civil charges against Cassano and take all his wealth? Its nonsense that a man can commit a Trillion dollar fraud and be allowed to walk away with his money. Its time that these attorney general's do the hard work of bringing charges against these men and women who can afford the big hired gun defense attorneys. Its time for war and our Justice department should be exerting all available efforts to be throwing these crooks in jail.
And if they won't do it then please publish a list of home addresses for guys like Fuld, Mazzillo, Cassano..... I think the American public knows what needs to be done....
The Trouble With Unfunded Entitlements [View article]
Social security is a math problem. We need to raise the age of retirement to 72 over the next 5-7 years and early retirement to 67. We need to partially means test benefits and reduce payments to those in the upper two income groups by 25-50%. Then we need to increase the cap on SS taxes to include all income levels. If that doesn't balance the numbers then the benefits will have to be reduced until we hit equilibrium. Done. Not pretty or "fair" for everyone but thats the solution.
Prescription drug benefits have to be cut back and we need to start excluding things that are the result of your own behavior. Its not a "Caring" or "feel good" thing, but its a fact of life that we don't have the money. Once your an adult you should be responsible for your health in general and live with the consequences.
Medicare/Medicaid is the most difficult of the three. We need to determine what things we should and shouldn't pay for... and at what age. Again, not a "caring" topic but its reality. We spend too much on dieing. We need a serious crackdown on waste and fraud (its in the tens of billions). And we need to make bold changes in how medicine is performed and cut the overhead costs - this will mean limits on lawsuits and other tort reform. What is worse than our unfunded liabilities are the traitors we have in Congress that keep piling on the liabilities - they have sold out our country for their own gain. These men and women are supposed to address these type of difficult things and instead they pretend either that they don't exist (Dem) or there is some silver bullet that will make fixes painless (Rep). Meanwhile Dems keep jacking up pensions and health benefits for public unions and Rep keep giving money away to the richest. They all need to get bounced this November.... then maybe we'll see some serious reform aimed at reducing these liabilities!
Geithner says the administration plans to allow tax cuts for the wealthiest Americans to expire, despite calls from a growing number of Democrats to delay any tax increases, and to extend estate taxes at 2009 rates. He also says Elizabeth Warren would be an "enormously effective leader" if chosen to run the new consumer finance agency. [View news story]
I agree his words are poor.
I have no problem paying more in taxes and I'm ok with a progressive tax system. I DO believe that those of us that are fortunate to enjoy the freedoms and privileges of the USA should contribute more. But I don't believe its those freedoms and privileges alone that make one rich or upper middle class - Its called hard work and sacrifice. And along those lines I'd really like to see ALL revenue from any tax increase going straight to the debt - lets let the bureaucrats and public unions sacrifice for a change! If they really want to tax those that are "fortunate" they should pass a reasonable estate tax. Being born to a family is fortunate when taken into context. Let those that earn enjoy the fruits of their labor during their lives (including their spouse) and then I'm ok with paying a reasonable percentage to the government upon death. But as is the case with our taxes now - I'd really like them to kill all the giveaways and special interests and just make it something like 20% over $5 million with no exceptions.
Now that financial reform means the U.S. could wind down AIG, Steven Davidoff wonders whether it will. But that's not very likely now, Daniel Indiviglio says; if the insurer's insolvency becomes more obvious, it'll also be smaller and less systemically vital, and maybe an old-fashioned bankruptcy works. [View news story]
If we do does that mean that we'll take back the "retention bonuses" to the very people that caused the firm to crash?? And maybe even through that crook in jail that ran the London division writing insurance against no assets?
Legislation without proper action means squat. And since our government is only interested in helping those Wall Street bankers with million dollar bonuses no one should expect any changes from the legislation - except I'm sure there will be another 10-20,000 federal bureaucrats.
Hedge Fund Performance Fees: Managers Should 'Eat Their Own Cooking' [View article]
I disagree with you in regards to government pension funds. Much of what hedge funds participate in are "zero sum games" - hedging, shorting, currency swaps, etc - someone wins and someone loses. The only long term "winners" are those that get a percentage of each transaction. Due to the compensation structure, these hedge funds get 2% of your pension $ in administrative fees and 20% of all winnings.....
Now consider the scenario of hedge fund A, and hedge fund B. A has money from the Nebraska public employee fund and B had money from the Illinois teachers fund. They each bet the opposite on a currency trade. Fund A "wins" and earns 50%. Fund B "loses" and loses 50%. But Fund A doesn't increase by 50%. They only increase by 40% as 20% of the 50% gain goes to the hedge fund. But overall public pensions have just decreased by 7%. Replace the percentages with $'s and you have Fund A going from 100 dollars to 138 dollars (100 + 50 winnings - 10 winning fee - 2 admin fee). Fund B goes from 100 dollars to 48 dollars (100 - 50 losses - 2 admin fee). So the hedge funds as a whole took in 200 but only return 186. Is the public at large better off?
This is why you occasionally read about funds paying for contacts with state pension fund managers - the numbers are so big that they can afford to pay a million or two to a guy who knows a guy.
So individuals I agree can do whatever the heck they want. But Public pensions should really be looking to invest their money, not making bets in a casino that guarantees the "house" (being the hedge funds" wins.
Hopefully this also shows how/why trading with other people's money increases the "acceptable" risk in the market. Other than your reputation, fund managers don't have anything too lose....... except your money!!! But everything to gain by taking outsized risks......
With news that the deficit will top $1.4T again this year and next, Derek Thompson looks at debt-to GDP and says this isn't your grandfather's burden: former heavy indebtedness was caused by wars or recessions that came to an end, but now it's about inside factors (promises to seniors made years ago). [View news story]
Unfortunately, none if this will end until 1. We elect some adults - independent of political party willing to discuss rationally the truth of the situation and make choices that involve sacrifice. 2. We ban special interest groups from participating in that process. 3. We ourselves accept that the tough choices don't include the idea of "fairness" - yes we should strive to be fair but more importantly we have to take real action.
I agree with the comment regarding how many lawyers, accountants and bureaucrats do we need.... the answer is a lot less than we currently have. The way to decrease the demand for these non-value added resources is to simplify our tax codes, eliminate special deductions, and eliminate the requirement to involve lawyers in many things. And we have to commit to reducing government services and cut the pay of government employees. That means taking on the unions, and quite frankly means telling bureaucrats the truth - their pensions will have to be drastically cut, their health care must be partially paid for by themselves and they are currently overpaid in general. This should spur many bureaucrats to leave and seek greener pastures - in doing so they should be creating new businesses and spurring innovation and create jobs - two things they can't do as bureaucrats.
I don't agree that only 10% of American families own their homes outright - I believe that figure is higher - mid 20's or 30's %. I only comment on this as it points out that a decent portion of our population lives well within their means. Its not difficult to do, and we must re-create the expectation in this country that you generally have to provide for yourself. This doesn't mean eliminating all social safety nets, but it does mean cutting them back. As late as 1980 people saved 10% of their income. Why? Because there was no implicit nor explicit expectation that the government was going to take care of your individual problems. And we need to gravitate back towards that philosophy.
Social Security retirement age needs to be raised to 72 in the next five to seven years. Early retirement raised to 67. Is it fair for everyone? No, But it needs to be done and quickly. We need to means test the program so that those in the top two income brackets in retirement only receive partial benefits.
We need to cut military expenditures. We will have to sacrifice or cut back some weapons programs. And we will have to close some bases around the world. It doesn't mean pulling back to our borders but it does mean questioning why we need to have multiple bases in places like Germany and Japan.
We need to have a program like Clinton had where all government bureaucracies are reviewed, and overlapping and redundant agencies are closed and cut back. The same for legislation and regulations that have outlived their purposes.
Simplifying the tax code and eliminating all deductions would be a great way to boost government revenue. Under our current system we will see an increase in tax avoidance after the huge government bailouts. People can clearly see that the current system is rewarding only politicians, financial elite, and bureaucrats. This increase their "justification" for not paying all the taxes they should. Unless there is a huge change in the tax code that simplifies it and keeps out special interests we'll develop a much larger "underground" economy.
And finally, we have to radically reduce spending on health care. And there aren't easy answers here. We have medicines and procedures that weren't available 50 years ago that are considered normal now. And they cost a lot of money. In 1950 people basically had access to similar health care no matter their income - yes there have always been differences between the rich and poor - but today the cost creates a social problem in terms of what people are "entitled" to in terms of their health. We have difficult choices to make about dieing. When and how much to spend on those close to death. We have to be willing to consider truly different solutions. Maybe there should be a tax on soda or junk food, or transfats, or even cable tv (leading to less activity) to cover some health care costs for the general public. I don't have all the answers but we have to be open to radically different ideas from what we have now. And in it all we have to emphasize personal responsibility.
While not everything can be done tomorrow - much can be. SS and the tax code are easily fixable if you remove special interests from the equation. Cutting back government can be started tomorrow. Cutting military spending can begin every time we consider weapons programs. It just shows how important it is that we vote out all the bums in November from both parties and vote for some people with common sense and a willingness to tell the truth - even when it involves making difficult choices and cuts.
The truth is that Americans aren't "entitled" to live better than those in other countries - we do so as a result of our freedoms and hard work - and the sooner we remember that the better off we'll all be.
The Trouble With Unfunded Entitlements [View article]
but fortunately I'm not as angry as you give me credit for either!
I think I'm only angry when I read the news!
And I'm perfectly ok and in favor of the brakes. We've had "fake" economic growth the past five years - totally on people spending borrowed money they shouldn't have had in the first place. And the only way to get growth back is to take the pain now and then go from there.
Finally, I'd agree that today there are others more hungry than myself (but not 15-20 years ago). But I'd suggest looking in Poland or Turkey or Russia or China or Thailand for those most hungry - India is a hierarchical society that doesn't lend itself to the idea of chasing absurd dreams. And for whatever reason those that are lower middle class seem the most hungry.... and while India is developing a middle class its still small in regards to the size of the country.
Permabear David Rosenberg offers 17 reasons to be bullish - seriously! But it's short-term, and the market is still a "meat grinder": "The bulls have the upper hand, but only until the next shoe drops in this modern-day depression..." Whew, that's more like it. [View news story]
At least he didn't do what many supposed guru's did - they held risky assets through 2008 and as 2009 dragged into late Feb/march they proclaimed that risky assets weren't appropriate and switched into more conservative assets just when risky assets turned around. So perhaps it was dumb luck or perhaps he's actually got a backbone. Since this seems to be some sort of ongoing thing I'll just leave it at that and wish you good luck with your own investments :)
The Trouble With Unfunded Entitlements [View article]
This is nonsense similar to the public unions claiming that their salaries and pensions are sacrosanct. Just as their pensions are going to be cut, so will your social security. Whether its through higher retirement age, higher taxes, smaller checks, etc... it will be cut.
And we are all going to pay for this mess. I don't care if your republican, democrat, independent, socialist, libertarian, communist, or a support of Lyndon Larouche (sorry to any of his supports as I'm sure I misspelled the name), taxes are going up - benefits are going down. The sooner we set about adjusting social security the less pain there will be. The sooner we adjust public employee wages, health care and pensions the less pain there will be. The same in the military and health care.
I understand people's fustration with the fact that certain groups and individuals have been the receipiants of government organized theft (financial elite on Wall Street, politicians, and bureaucrats) to the detriment of everyone else. But its been done. I didn't notice people storming the streets and taking over city hall or the Congress when the bailouts were going on - yes a relatively small group protested for a day or two but thats it. And don't kid yourself, until we demand changes (which will impact ouselves negatively in the short run) these traitors will continue to ruin our children's and grandchildren's future for their own gain.
So we can play pretend for a few more years or we can get serious about the future of our country - and yes, it all won't be fair.
Permabear David Rosenberg offers 17 reasons to be bullish - seriously! But it's short-term, and the market is still a "meat grinder": "The bulls have the upper hand, but only until the next shoe drops in this modern-day depression..." Whew, that's more like it. [View news story]
I don't have dog in this fight but unless I"m looking at something incorrectly since he set up his fund he's outperformed.
It's Time to Bite the Bullet [View article]
We're a free country. If you want to work for forty or fifty years and not save anything for when your older - its your choice. But don't come crying to me when your 55 or 60 and suddenly you want someone else to provide you with a nice cushy retirement.
Should have given that some thought when you bought that 70K car when your were 38.... or when you decided to spend $200 a month on your tv cable..... or when you budgeted 10K every year for holiday..... or when you ate dinner/lunch out 5 times a week..... etc, etc.
Social security can be saved. It requires raising the retirement age quickly over the next 5-7 years to 72 normal and 67 early, reducing benefits, raising the cap on SS taxes, and some limited means testing (want to keep everyone receiving something so it isn't strictly a welfare program). No one will be happy but thats life.
As for medicare/medicaid its a more difficult problem due to the emotional and religious element of dieing. We spend too much money on dieing and until we admit it and start to identify what we will cover and what we won't the whole system will go broke. We need to focus "free" care on children and on diseases that aren't a result of personal behavior.
But the overriding message from government needs to be "Your responsible for yourself and your own situation!!!".
A VAT Trojan Horse? [View article]
Yes, there will undoubtedly be an increase in small businesses under-reporting sales over the next several years. While I don't think its right, I find it hard to be very upset about it. The government organized the greatest bank robbery in history itself!!!
The Wall Street crowd walked off with hundreds of billions of dollars and yet we are worried about a small businessman/women hiding 500 or 1000 bucks from the government?
All the legislation in the world isn't going to repair the moral hazard problem that the government itself has created. Everyone knows the politicians, bureaucrats and financial elite are the only ones that benefit from tax increases...... and if you believe that government bureaucrats earning 75% more than private sector employees, with free health care, and obscene pensions (see the California small city director that has a 500,000+ pension/year????) is wrong and theft from hard working people - why would you not try to avoid taxes?
When you throw right/wrong out the window as the government did with the bailouts and total lack of prosecution, its impossible to put the genie back in the bottle. People aren't that stupid and we know we've been screwed royally by those in government.
Elizabeth Warren: Apparently Her Bad Faith Extended to the Health Care Debate Too [View article]
Common sense would dictate that anyone with under 100K of income should be shown a 30 year mortgage payment plan in comparison to any other mortgage they might consider.
Common sense would dictate that banks cash checks in an order that is advantageous to the customer as opposed to whatever order will cause the highest charge.
Financial product innovation in the past 15-20 years has all too often meant finding ways to trick people into paying for things they don't realize they are paying for - or to pay small fees that actually are huge % charges but if your not so good at math you don't really understand what your actually paying. Its all nonsense and its long since time that banks focus not on raising fees but on making good loans that contribute to the growth of their communities and country.
And if we need someone that will zealously represent consumer interests for a period of time I'm ok with that - the banks have had free rein for 20 years and that sure hasn't worked.
No individuals named, no one called out, no actions taken - Ken Feinberg's review of pay practices at banks that received government bailout money was a disappointing bore. [View news story]
What does he care? He got his money and off to the next government fiasco in the Gulf for more money for him!
Unless the justice department names someone to go after these guys hard they will get away with the biggest heist in history.
The Trouble With Unfunded Entitlements [View article]
The boomers have no one to blame but themselves. They have been part of the richest generation in human history and the idea that people (as a whole) were "just getting by" is nonsense - they got BUY would be a better summation - wasting trillions on government programs, wasting trillions on imported goods, vacations, homes that 40 people could live in, new cars, etc, etc.
The time has come for fiscal responsibility - not to benefit the boomers but to benefit our children and their children.
The Justice Department finds it too difficult to build a case against AIG's Joseph Cassano, whose mortgage market venture has cost taxpayers ~$180B so far. But the two men who ran "the Enron of Kansas" remain in legal limbo after seven years. Justice's "enthusiasm for prosecutorial vigilance" should be turned toward the "villains on Wall Street, instead of the two half-pints in Kansas," Opinionator says. [View news story]
And if they won't do it then please publish a list of home addresses for guys like Fuld, Mazzillo, Cassano..... I think the American public knows what needs to be done....
The Trouble With Unfunded Entitlements [View article]
Prescription drug benefits have to be cut back and we need to start excluding things that are the result of your own behavior. Its not a "Caring" or "feel good" thing, but its a fact of life that we don't have the money. Once your an adult you should be responsible for your health in general and live with the consequences.
Medicare/Medicaid is the most difficult of the three. We need to determine what things we should and shouldn't pay for... and at what age. Again, not a "caring" topic but its reality. We spend too much on dieing. We need a serious crackdown on waste and fraud (its in the tens of billions). And we need to make bold changes in how medicine is performed and cut the overhead costs - this will mean limits on lawsuits and other tort reform.
What is worse than our unfunded liabilities are the traitors we have in Congress that keep piling on the liabilities - they have sold out our country for their own gain. These men and women are supposed to address these type of difficult things and instead they pretend either that they don't exist (Dem) or there is some silver bullet that will make fixes painless (Rep). Meanwhile Dems keep jacking up pensions and health benefits for public unions and Rep keep giving money away to the richest. They all need to get bounced this November.... then maybe we'll see some serious reform aimed at reducing these liabilities!
Geithner says the administration plans to allow tax cuts for the wealthiest Americans to expire, despite calls from a growing number of Democrats to delay any tax increases, and to extend estate taxes at 2009 rates. He also says Elizabeth Warren would be an "enormously effective leader" if chosen to run the new consumer finance agency. [View news story]
I have no problem paying more in taxes and I'm ok with a progressive tax system. I DO believe that those of us that are fortunate to enjoy the freedoms and privileges of the USA should contribute more. But I don't believe its those freedoms and privileges alone that make one rich or upper middle class - Its called hard work and sacrifice. And along those lines I'd really like to see ALL revenue from any tax increase going straight to the debt - lets let the bureaucrats and public unions sacrifice for a change!
If they really want to tax those that are "fortunate" they should pass a reasonable estate tax. Being born to a family is fortunate when taken into context. Let those that earn enjoy the fruits of their labor during their lives (including their spouse) and then I'm ok with paying a reasonable percentage to the government upon death. But as is the case with our taxes now - I'd really like them to kill all the giveaways and special interests and just make it something like 20% over $5 million with no exceptions.
Now that financial reform means the U.S. could wind down AIG, Steven Davidoff wonders whether it will. But that's not very likely now, Daniel Indiviglio says; if the insurer's insolvency becomes more obvious, it'll also be smaller and less systemically vital, and maybe an old-fashioned bankruptcy works. [View news story]
Legislation without proper action means squat. And since our government is only interested in helping those Wall Street bankers with million dollar bonuses no one should expect any changes from the legislation - except I'm sure there will be another 10-20,000 federal bureaucrats.