Debt Free

First of all, there is no actual type of bankruptcy called a “medical bankruptcy”. You won't get any special treatment because your problems were caused by medical conditions. There were slightly over 1.6 million personal bankruptcies filed in the US in 2005. These were divided about 2/3 chapter 7 and 1/3 chapter13. This number and distribution has remained relatively constant for the past three years, although the Federal bankruptcy legislation passed last year will probably change it to increase chapter 13 filings.

There are some things you can do to help ensure you don't get caught in the medical bankruptcy trap.

First of all, do whatever you can to make sure have health insurance, if at all possible. That, however, will not automatically protect you from being liable for massive medical expenses. In the aforementioned Harvard study, over 75% of the participants had health insurance. As amazing as it sounds, some of those experiencing medically related bankruptcies thought they were covered by insurance, when in fact, they were not. Before visiting a physician, you need to verify your insurance coverage is in effect. This is especially true if you've recently changed jobs.

If your insurance demands that you get a referral from your physician before seeing a specialist, make sure you follow the proper guidelines. You could get completely screwed for big money if you visit a specialist (the most expensive type of doctor, by the way) without the proper referral. You need to be intimately familiar with the requirements of your insurance plan. If your employer offers different plans, carefully analyze the plans before choosing one.

If you are able to, get supplemental insurance to cover the costs not covered by your medical insurance. This is nice because if you or a member of your family is hospitalized, your bills will continue to come rolling in, while your income may not. Even if you continue to get paid, you can incur many thousands of dollars in expenses that are not covered by insurance. Usually, supplemental insurance is fairly affordable, depending on how many different types of coverage you get. You can get coverage for hospitalization, cancer, and other conditional coverages. Check with your chosen provider. As an added bonus, in many cases, these types of insurance can be paid for using pretax dollars, effectively giving you a little premium reduction.

Once you're properly insured, and you're following all the conditions of your medical insurance, you need to make sure you're living right. Prevention is worth a pound of cure, as they say. Exercise and eat right. If you can get into a regular exercise routine, it will be better than trying to sneak in a bit of cardio whenever you can. A lifestyle change is better than a diet, and easier to maintain too. Diets seem to come and go with every new year.

Try to get involved in some type of sporting activity for cardio vascular fitness. That seems to be a heck of a lot easier for many than getting a sore ass watching ESPN on the bike at your local club. The whole thing is to stay on the right track. It goes without saying, but I will anyway; Don't smoke. If you do, quit. If you never started, well, you're feeling pretty good about yourself, aren't you? Stay away from trans fats. Some of the latest research indicates it's one of the most important diet issues in preventing heart disease. So much for that linguine at Alfredo's. Get in shape, you'll look great and feel better too. It's a lot easier to say it rather than do it. It'll be worth it, though. It's best to try and stay away from the hospital in the first place.

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Posted by debtblog at 01:07 PM | Permalink | Comments (0) | TrackBacks (0)

You are proposing a secure retirement for every American. This is a laudable goal, to be sure. Why then, not release us from the shackles of a Social Security System that has delivered such underwhelming performance? Why pick the American worker’s pocket for the 6.2% demanded by the decrepit, old vestige of the Great Depression and truly deliver something new? In early 2000, a bipartisan commission charged with investigating the agency found a “lack of management accountability” and an agency with "fragmented and uncoordinated administrative arrangement” that rendered the application and appeals process too slow. It’s time for a change. Why must the Democrats continue to champion the old dog? Put it down, and soon.

As noted, you have proposed retirement plans. Will these replace or supplement Social Security? Why have you fought changing the existing system on the grounds that the stock market and other private markets are too volatile and unreliable, yet now you are proposing automatic 401(k) participation? I’m sure you’re aware the funds in most 401(k) plans are invested in just the type of equity and debt instruments you’ve deemed too risky for the average American. Why the change now? It’s about time the Democrats have come around, if, in fact, they have.

Enough about the Bush Administration’s “Tax breaks for the wealthy” already. That repetitive cry has been echoing through the halls of the DNC for years now. The fact is, the wealthy pay most of the taxes, and if you are going to cut taxes, that is where most of the opportunity lies. In 2004, the top 1% of income tax payers paid over 37% of the total federal income tax burden. In the American Dream Initiative, you indicate that Bush has given “special tax breaks to the privileged few” and increased the burden on the middle class. If memory serves, the middle and lower classes got a tax break too. Those in the lowest tax bracket got a 33% tax rate reduction. The next lowest bracket, containing much of the middle class so often quoted in political rhetoric, pays only 53% of their previous rate. In addition, the child tax credit was doubled.

Helping those bound for institutions of higher learning is a vital goal as well. Without a highly educated workforce, we’ve no chance against the Chinese and Indians lapping at our heels. We need scientists and engineers to perform the research that will make sure the products and technologies of tomorrow are developed on our shores. We don’t need so many studying majors such as law and ethnic history studies. Those so educated develop nothing. If the Initiative is to further stimulate the economy (which has been improving very nicely, thank you!), it must provide strong incentives for the study of technical, scientific and mathematics disciplines. You note, correctly, that the cost of higher education has outpaced the ability of many to provide it. How about taking that $1,000 and putting it toward education? It would seem to be $4B better spent each year.

It appears the focus on CEO pay is an excellent attempt to drive a wedge between those at the top and those a bit further down the socio-economic ladder. A tried and true DNC tactic, trotted out once again for all to see. A CEO’s job at most firms is to increase profits and maximize stock price. The increase in stock price will maximize shareholder value. Guess who the shareholders are? Right, they’re the investors in the 401(k) and retirement plans you now seem to be open to considering. Most public companies today have a high percentage of institutional ownership. GE for example, has 56.5% institutional ownership, Microsoft has 57.3% and large institutions claim 51.4% of Ford Motor Co. Public companies already list CEO compensation, if the investor deems it important. With the dawn of the Internet, this type of information is at your fingertips. If the shareholders of a corporation feel they should provide their CEO with a foolishly inflated compensation package, that’s really their business, not the DNC’s. In any case, the SEC released updated rules today requiring more complete displosure regarding an executives total compensation, including stock options.

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Posted by debtblog at 07:40 AM | Permalink | Comments (0) | TrackBacks (0)

Your home is one of the largest expense categories in your budget. Even if you don’t include the mortgage interest most of you pay each month, you’re still paying more for home expenses than almost anything else. One of the keys to becoming and remaining debt free is to balance your budget. Lord knows the government has trouble doing it, and get away without doing so for years. You, however, have no such luxuries. Here are some ways you can (more or less) painlessly cut back. The money you save each month will contribute to your efforts to become debt free or your investment accounts.

1)      One of the largest budget items in most locales is energy. With prices skyrocketing, any savings here will add up in a hurry. There are some things you can do to pinch pennies from your energy bills every month. If you live in a cold or very hot location, heating, ventilation and air conditioning (HVAC) consume most of your home’s energy.

Many utility companies offer free or inexpensive energy audit services. These will locate money losers throughout your home and make suggestions for ways to eliminate them.  If yours doesn’t do this, you can find a private company that offers the service. It probably won’t be as great a value, but it should pay for itself nonetheless. If all else fails, you can do it yourself. Look for leaks and cracks where the air you paid big money to heat or cool can escape, allowing outside air to take its place.

Common areas this occurs are around windows and doors, fireplaces and ductwork. A seemingly small crack can be bigger than you think. For example, a tiny, 1/8” crack under a typical 36” door is the same as having a 4” x 1” hole in the door. Most of you probably wouldn’t let that go unrepaired, and you shouldn’t leave the crack under the door either.

If your home’s insulation is poor, upgrade it. Sometimes you can get credits from your utility company, county or municipality for this. One other thing, no matter what so many people thing or how they use their thermostat, turning it up to 89 freakin’ degrees when you want to take it from 62 to 68 won’t make it go up any faster. Just turn it up to 68, relax and just wait for it. What will happen is you’ll forget to check it, and your home will be up to 75 before you realize it. There, you just paid to heat your house up 7 extra degrees for nothing. Keep the heat off in rooms you don’t use. If you have to go in there, gut up and wear a sweater, whimpy! You probably don’t need to keep it so frosty inside during the summer Phoenix sun, either, 75 degrees is fine. Moderation in temperatures is key to saving money.

Another energy saving tip is to hang blinds outside your windows to block the sun. This willl keep a tremendous amount of solar energy away from your windows, where it will infiltrate your home and cost you money in increased HVAC bills. You can put the blinds inside the house, but they will be much more effective outside.

If you can cook something in your 1,200 watt microwave for 5 minutes instead of cooking it in your 5,000 watt oven for 15, you’ll save energy. It’s simple math. I know the oven isn’t on the entire 15 minutes, but you have to preheat too, so don’t forget about that.

As a bonus to saving money, you’ll help cut U.S dependence on foreign energy sources.

2)      Another big budget item is you homeowner’s insurance. You can cut back here in a few ways that won’t affect your daily life. Many insurers are now offering big discounts for monitored security and fire alarm systems. In many cases the discount is much larger than the monitoring fee. This is especially true if the alarm system includes fire alarm capability. If you live in one of the thousands of homes throughout the country with a security system that isn’t used, check with your insurance provider. It may be worth getting it monitored.

Make sure you are getting maximum discounts from your insurance company. Most offer bundling discounts for using one company. If you have different home and auto policies, check with both to verify this and go with the one offering the best deal. In addition, you should usually raise your deductible to $1,000.  The discount can be substantial. You won’t want to claim small loses anyway. Your rates will probably rise, or worse, you could get blacklisted. Many people have found, after making several claims against their homeowner’s insurance in a certain period, such as 2 years, their rates drastically rise. When they go to get insurance from another provider, it’s the same story, if they are able to get it at all.

This may seem evident, but shop around. You can get better deals at times through work, industry associations and alumni groups. If you’ve been with the same insurance provider since Methuselah was a child, you may qualify for a discount as well.

Another insurance related savings can be found by eliminating private mortgage insurance (PMI). If your home equity is greater than 20%, you can probably eliminate this money sucker.

3)      There are all sorts of miscellaneous ways to conserve.

In many cases, you can use less detergent in both your dishwasher and clothes washer. Usually, it will work great.

If you’ve got so much crap you’ve put some of it in storage, it’s time for a yard sale! Get rid of your excess stuff and the storage rental fees at the same time. If you’ve got stuff you haven’t seen in over 5 years, unless it’s your wedding album or other item with high sentimental value, ditch it! You’ve probably forgotten you had it anyway.

How much do you really use those premium movie channels anyway? Do you really need both HBO and Showtime? What about just a Netflix subscription for $6.00 a month? Do an inventory of your home’s communications bills every month. Between cable TV, satellite (yes, I know people with both), Internet, cell phone, land line phone and newspaper, you could be spending $300 - $400 monthly. How much use do they get? Can you get a bundling discount for using a single utility for multiple services in your area? For example, cable TV companies now offer TV, Internet and telephone services. You can usually get a discount by getting all three from them. Do you need both a land line and a cell phone? If not, verify you can still use 911 services.

There are so many ways to save money on your house bills, it is almost impossible to list them all. Not all of them apply in every location. You don’t have to give up the big screen and the pool, but do you have to keep the pool so warm?

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Posted by debtblog at 05:49 AM | Permalink | Comments (1) | TrackBacks (1)

Although it moved steadily earlier for almost a decade, the COGD has been trending later since the late 1990's. Last year's Cost of Government Day was, appropriately enough, July 4^th. The main culprit is government spending that keeps going up like some sick express elevator. Didn't the Elephants used to mean smaller, leaner government and lower government spending? I know we're fighting a war, but come on! Combined spending for the Iraq and Afghanistan actions only comprise about .8% of the GDP. All of the increase can't be logically blamed on them.

Although they claim to be keeping a lid on government spending, the Republicans can only claim this in the context of spending as a percentage of GDP, although this is showing signs of improvement lately. Growth in discretionary government spending was only about 1% last year, according to the Office of Management and Budget (OMB). Contrary to what the Donks would have you believe, the economy is actually fairly robust, and has been recovering nicely over the last couple of years. The strong recovery has led to a rise in GDP, and thus, tax revenues. This tax revenue occurs despite, and to some extent is fueled by, the cuts in the tax rate implemented by President Bush.

The budget deficit was $521 billion for 2004. This was 3.6% of the GDP. So, although Congress and the Bush Administration have been spending money with the enthusiasm of a frat boy in a beer garden, the deficit as a percentage of the GDP has actually been decreasing of late. Watch out if the economy takes a turn for the worse, as could be the case if the trouble in the middle east grows more serious. That would cause tax revenues to plummet and deficits to soar. Time to do some praying for the situation to improve over there.

Although the cost of the federal government makes up the lion's share of the COGD, state and local governments contribute as well. They contribute 40 days or so the the calender position of the day. Washington State and its most populous county, King County are notoriously expensive governmentally, never finding a regulation they don't like. That's a major component of the state's placement so deep into July. With a little luck, some restraint, and possibly some real creative governing, maybe we could pull an about face and move the COGD into June. It'd be something to shoot for.

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Posted by debtblog at 10:52 PM | Permalink | Comments (0) | TrackBacks (1)

To really get you off your duff, here is what some of your savings will add up to over the long term.

Cutting back from two packs a day to one
Daily savings = $4.25, Monthly savings = $127.50

Bringing lunch to work instead of spending $8.00/ day eating out
Daily Savings = $5.00, Monthly savings = $110.00

Using regular gas instead of premium if you can (and most likely, you can) 1 x 20gal fill up per week.
Daily savings = $.71, Monthly savings = $21.43

Ditching all the premium movie channels – Don't worry, you can keep NFL Direct Ticket!
Daily Savings = $1.97, Monthly savings = $59.00

Doing the free things you should to save gas (properly inflate tires, no rapid acceleration, use less A/C, coast up to stop signs & lights, etc.) figuring 15,000 miles a year, a 15% fuel mileage improvement, and a vehicle that improves from 22mpg to 25.3mpg. Gas price average of $2.97/gal.
Daily Savings = $.72, Monthly savings = $21.60

Only eat out one night a month, instead of 4 – Dinner for 2 with inexpensive bottle of wine & tip = $62.00
Daily savings = $6.20, Monthly savings = $186.00

Raise your insurance deductibles from $250 to $500 – savings vary widely, but you could easily save 8% on your homeowners and auto insurance policies. Average insurance payment $250/month.
Daily savings = $.67, Monthly savings = $20.00

Shop at the warehouse grocery store instead of the big, national chain grocery stores. The savings can be huge. Most of the warehouse grocery stores have a wide selection and the same brands you'll find at the big chains, in addition to money saving house brands. If you currently shop at a specialty grocery store, shame on you, but you'll save even more by switching. Savings average 20% for a family of four's grocery bill of $600/month.
Daily savings = $4.00, Monthly savings = $120.00

Just doing these simple things can do more than save you money now. Take a look:

These savings add up to $686.96 a month! That's a huge number, and it's achieved without a major sacrifice or lifestyle change. I didn't even have you eliminate the morning Latte at Starbucks. To make it even more impressive, it's all pretax dollars, meaning that, depending upon which tax bracket you're in, you have to earn between $850 and $1000 a month to pay the $686.96! Wow! You just got that huge raise you've been asking for.

The most impressive thing is what happens when you compound those savings over a period of years. If you take the $686.96 per month and compound it over 25 years. If you earn 9% over that 25 year period, and invest the entire $686.96, it turns into an astounding $770,165.92! Holy Crap! If you stretch the period out to 30 years, you're a millionaire!! $1,257,647.54! This is on money you already make. If you're 30 years old, and start this now, you'd have a million invested before you were 60. That is addition to any savings plan, pension, 401K or 403 plan you may have already. Go to it!

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Posted by debtblog at 01:20 PM | Permalink | Comments (2) | TrackBacks (1)

#1) “No out of pocket expenses” Be aware of this possible scam. You may indeed pay no out of pocket expenses, but substantial extra fees can still be added to your mortgage. Some of these fees can be perfectly legitimate, but some are unnecessary, and these extras can cost you plenty over the life of the loan. For example, a $1,000.00 fee added to your mortgage principle on a 6.25%, 30 year, fixed mortgage will cost you an additional $1,216.00 in interest payments in addition to the $1,000. Those kind of extras can add up in a hurry. Make sure you look over all the documentation supplied with your prospective new mortgage. Have it looked over by a qualified real estate attorney. The few hundred dollars you'll spend is a good investment, compared to the amount you could spend over the life of the loan.

#2) Affiliated title companies and extra large title insurance fees. These are not always a problem, but you can pay substantially more for title insurance from some companies than others and often, the “some companies” are affiliated with the realty or mortgage company. Shop around for title insurance with reputable title insurance companies and you could save 20% - 40% on your title insurance. The problem lies in the tangled web of prohibited referral fees collected by mortgage companies for directing clients to the title insurance firms.

To effectively skirt laws designed to prevent these type of back room referral deals, many companies are actually affiliated with mortgage companies. Since referral payments to affiliated companies fall neatly through a loophole in the law prohibiting such payments, they're perfectly legal. In any case, almost all of the major cases closed by the U.S. Department of Housing and Urban Development in 2005 involved some sort of shady referral payment deals. Be on the lookout.

#3) Outright mortgage fraud. Use common sense. If it seems too good to be true, it probably is. According to a recent FBI study, 80% of mortgage frauds involved real estate or mortgage industry insiders. As is typical in many fraud or con games, the victim's greed or feeling of hopelessness is used against them. Make sure you don't fall into the trap. Get an appraisal from a qualified, underwriter approved appraiser. Some scams involve getting you into a mortgage that far exceeds the value of your property.

A common fraud is known as “equity stripping”or bailout. In this game, people with financial problems are targeted. In most cases, they are about ½ step away from foreclosure. They're approached with an offer to save their property. The rescue company buys the property for a substantial discount, leases it back to the original homeowner, then sells it back to them at the end of their financial setbacks. This can be legitimate, and a win-win for all involved. There are also legitimate firms that purchase pre-foreclosure properties for small (10 – 15%) discounts off market value, but these are usually outright purchases, with no leaseback.

In the equity stripping fraud, the home is sold at a huge discount to the scammer, then is leased back to the original homeowner for a time. As noted above, this will allow the homeowner to get their head above water. When they are in a financially stronger position, they'll buy the property back, but unlike a similar deal with a legitimate company, in the fraud, the original homeowner doesn't stand much of a chance of ever getting their property back.

What happens is this: The new owner gets a mortgage to cover all the liens on the home and give the original homeowner a bit of cash as a “feel good” measure. After the deal is done, the original, desperate homeowners realize they've actually signed a lease purchase agreement that is much worse than their original mortgage. The perpetrators of the fraud can accomplish this with careful timing. They wait until foreclosure is imminent and the homeowners are exceedingly pressured. At the last second, the homeowners find out the new payments are higher than originally promised. The plan from the beginning is to have the homeowners default on the lease purchase so the scam artists can repossess the home. It is then sold on the open market, and the fraudsters realize a hefty profit.

Make sure your real estate and mortgage company have a proven track record. Most companies are good and honest, but as is the case in most industries, a few bad apples can give an industry a bad name. Use a qualified real estate attorney to examine all mortgage documents. Look at the APR on the disclosure document to see what interest rate you are actually paying, inclusive of all fees.

For some really great information on mortgages from an insider, go to http://www.searchlightcrusade.net/

There are other tricks to be aware of as well. The fewer options you have when getting a mortgage, common when you've got bad credit, the more likely you are to see sleight of hand from the lender or broker. A mortgage is a huge financial step. Make sure you don't step off the path into a pile of steaming fees.

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Posted by debtblog at 01:22 PM | Permalink | Comments (0) | TrackBacks (0)

The Dragon Skin body armor is so named because it is constructed of interlocking ceramic composite discs. The scale effect is similar to the construction of reptile skin. The ballistic performance, light weight and flexibility offered by these vests is quite revolutionary, according to those in a position to know. In addition to the superb ballistic performance of the vests, the vests wrap around the body to offer protection from the side, as well as the front and back. In tests, this product has proved effective against multiple strikes from rounds up to, and including .308 (7.62 x 51mm) at close ranges. It even stops high velocity, armor piercing rounds fired from the same type 7.62mm weapons fielded by enemies in Iraq and Afghanistan.

During a labor dispute involving U.S. Army combat engineers disposing of land mines (they wear these vests, you know), testimony in a Florida district court pointed to quality problems with the interceptor vests. The U.S. Army Times newspaper obtained memos from the U.S.M.C. Said that there were "major quality assurance deficiencies within Point Blank.".

According to DefenseReview.com “Pinnacle Armor SOV-2000 (Level III/III+) and SOV-3000 (Level IV) Dragon Skin body armor appears to be significantly superior in every combat-relevant way to U.S. Army PEO Soldier's and U.S. Army Natick Soldier Center (NSC)/Soldier Systems Center's Interceptor Body Armor “ DefenseReview.com's conclusion regarding the performance of Dragon Skin vs. the official, body armor of the U.S. Military? “There's simply no way anyone who has seen the data that we saw could come to any other conclusion other than Dragon Skin is vastly superior to Interceptor Body Armor. It's not even close.”

On April, 30^th, 2006 the History Channel show Mail Call tested the Dragon Skin ballistic vest and gave its performance rave reviews. Admittedly, that's not an approved testing laboratory, but it's just another piece of evidence regarding the Dragon Skin vest.

At Military.com, they report that, regarding the Dragon Skin body armor, “It is good enough body armor that nine American generals in the middle east are wearing it in place of the standard "Interceptor OTV" armor issued to the troops they command. “ I guess what's good for the goose isn't quite good enough for the gander this time.

SWAT teams throughout the country choose Dragon Skin time and again to protect their forces from flying bullets, even though they are significantly more expensive than the Interceptor vests. In Fresno, where the Dragon Skin vests are made, the SWAT team ordered 26 of the vests for team members.

A feature of the Interceptor is that it can deteriorate in sunlight and high temperatures. HUH?? This stuff is being issued to soldiers serving in one of the hottest desert environments in the world. There's sun there too. WTF is our military thinking? We know what the generals in Afghanistan are thinking, because they voted with their dollars to use different body armor. I think most people reading this would do the same.

To make matters worse, it appears that David Brooks, head of DHB Enterprises, makers of Interceptor armor, may not be the greatest corporate citizen. He's currently being sued by investors in U.S. District Court for events surrounding his cashing out $185 million in company stock immediately before the stock took a nose dive, losing about 70% of its value in 2004. It's claimed he may have violated Federal securities laws. It isn't the first time he's been in hot water with authorities, either. A decade ago, he and his brother were fined over $400,000 by the SEC.

The military has classified results of recent Dragon Skin tests. Thank God there are other tests that are not classified showing the efficacy of the the product. I guess that they don't want to be taken to task for issuing our troops less than the best. We'll just sweep these results under the carpet, eh?

As a further slap in the face to our troops in the field, a story from the AP states that “Soldiers will no longer be allowed to wear body armor other than the protective gear issued by the military, Army officials said Thursday “ in addition, the story goes on to say that "We're very concerned that people are spending their hard-earned money on something that doesn't provide the level of protection that the Army requires people to wear. So they're, frankly, wasting their money on substandard stuff," said Col. Thomas Spoehr, director of material for the Army. Sadly, he doesn't see the irony here regarding his own purchases.

It looks like, in a large part, it comes down to dollar cost. A set of Dragon Skin armor costs the U.S. government about $5Gs, while the official issue Interceptor armor runs about 20% of that. You'd think in an area like body armor, a premium would be placed on the product's effectiveness. Why not just remove one F-22 from the Air Force budget and buy all the troops the Dragon Skin armor, even the Air Force personnel? With something this important, there are no second chances, at least for the poor field personnel trapped in sub-standard protective vests. So what is the true cost, really? If you're one of the poor saps caught in an Interceptor vest when some a-hole plugs you with a couple rounds of 7.62 x 39AP at close range, the true cost is likely the ultimate one.

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Posted by debtblog at 02:52 PM | Permalink | Comments (0) | TrackBacks (0)

According to an article in today's Washington Post here:

http://www.washingtonpost.com/wp-dyn/content/article/2006/07/11/AR2006071101534.html

Mexico's President Elect, Felipe Calderón, wants increased Canadian and U.S. development efforts in Mexico. Increased development in our neighbor to the south is all well and good, but in lieu of stepped up enforcement of immigration statutes and more traditional illegal immigration prevention efforts? Not for my money. Several factors must be addressed and their risks mitigated before increased development in Mexico will be a viable solution to the Mark Spitz invitational that occurs at our southern border every day.

First and foremost, the level of endemic corruption in Mexico must be dealt with. As in so many countries, corruption in Mexico is the way to get things done. Mexico has elevated corruption to the stereotypical. This must be curbed or else development funds and investment will be diverted to less productive and more nefarious destinations. Mexico must be ruled by the law, not the law enforcers.

Next would be at least a small measure of assistance in decreasing illegal immigration emanating from south of the border instead of the outright assistance, or in many cases, tacit approval, with a wink and a smile, the issue receives today. Come on, please, for too many years it's been the same story. “We're doing all we can.” If that's the truth, Mexico is truly an impotent embarrassment to itself.

If these issues can be addressed in Mexico, additional development efforts, can, indeed help to stem the flow to the promised land. Mexico has the hard working, talented people and natural resources to have a booming economy. If such an economy was forthcoming, we would have both a powerful trading partner and a much better neighbor.

Note: This does not mean we need an superhighway from Mexico to Kansas, allowing Mexican trucks to race across our (by then almost nonexistent) southern border chock full of Chinese cargo. If plans of the Security and Prosperity Partnership of the Department of Commerce come to pass, and they are very well on the way, construction begins next year. Once completed, Mexican trucks will travel unimpeded from the Mexican port of Lazaro Cardenas to a Mexican customs office in the new Kansas City SmartPort. It'll be like our own little EU, right here in North America. Maybe we can all use the Peso as our unified currency to really become a close knit economic unit.

In case anyone is balking at the security implications of such an arrangement, fear not, everything will be securely checked by the infallible, new electronic “SENTRI” system. Don't worry, nothing can get through. That says nothing of the security Although we'll lose thousands of high paying longshoreman jobs in our ports, think of all the new Mexican customs office positions we'll have in Kansas.

It would also be just a bit beneficial if American firms couldn't hire illegals with impunity. Kudos to Colorado for it's latest efforts to curb this process. Now that a new immigration bill is burning up his desk, hopefully Gov. Bill Owens will sign it and the citizens of Colorado can stop footing the bill for so many social services provided to illegals at the expense of their tax dollars.

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Posted by debtblog at 02:30 PM | Permalink | Comments (0) | TrackBacks (0)

This will be blasphemous to some. Pets are a hollowed tradition in America. We love Fido and Fluffy. They lick our hands when we get home after along day at work and generally act happy to see us most of the time. Of course, they also crap in the yard and piss on the furniture, but that's not important right now. We love them anyway. Just how much does this love cost you every year?

Peteducation.com estimates the cost for owning a 50lb dog to be $1200.00 for the 1^st year and over $800.00 every year after that, over the life of the pet. A larger dog will cost more. That presupposes Fido never bites the mailman or chews up the neighbor's prize azaleas and you wind up in court. It also assumes that you avoid any large vet bills over your pets life. It is easy for something to befall your pet that can cost you thousands in vet bills and medicine. It's tough to get the dog covered by Kaiser Permanente or Blue Cross. Obviously, if your pet is a goldfish, you won't have such worries.

In addition to the direct costs for pet ownership, you may have to pay more for homeowners insurance if you own a dog. This depends upon the provider and can be influenced by the breed. The increased costs reflect the increase risk borne by insurers that a dog will cause property damage or bite someone.

This brings us to the point of the whole discussion. Can you afford to have pets? Should you? Does their value as a member of the family go beyond their monetary cost? If you're really trying to get debt free, should you use the $800 per pet each year to pay down credit card balances? Well, only you can answer that question. Financially, it probably makes no sense to have pets while you're trying to get out from under a stack of credit card bills. Then again, it probably didn't make any sense to get under the stack in the first place.

Sometimes pets provide security in other ways besides giving us the warm and fuzzies. They can help protect our property and deter the criminal element from paying us a visit. Nothing like a 125lb Rott to keep away the meth head trying to grab your CD collection and wife's jewelery. If you live in many neighborhoods throughout this land, the $1,000.00 a year to keep that Rottweiller would be a bargain. You'd think that homeowners insurance providers would see it that way too.

If you're looking at ways to decrease your monthly cash outlflow, you need to investigate every possibility. Many people overlook their furry friend when considering where they can cut the fat. It can take a major lifestyle change to reduce debt. You may have to choose between Fido and becoming debt free. Let's hope the choice is somewhat less dramatic. Maybe you could just ditch your $4.00 morning latte. See ya Fido!

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Posted by debtblog at 01:04 PM | Permalink | Comments (3) | TrackBacks (1)

H-1B. Nothing is quite so sure to provoke feelings of rage and disgust among American technology workers than those three innocent letters. Why are our tech workers so incensed over three little letters? Well, in the aforementioned combination, they represent a visa that allows highly skilled foreign workers to come to the U.S. to fill high tech jobs that, ostensibly, American firms can't find workers for. Try telling that to the 100,000 network engineers, software developers, computer scientists and electrical engineers that are unemployed in this country. What the industries mean is that they can't find workers to fill those positions at severely depressed labor rates. A strong argument could be made that they could actually find plenty of qualified Americans to occupy the jobs in question.

After the H-1B visa cap was lowered from 110,000 to 65,000 for 2004, the sector's unemployment fell from 208,000 to 116,000 in nine key areas, according to the Department of Labor's Bureau of Labor Statistics (BLS). To make this figure even more dramatic, that decrease occurred in only two fiscal quarters. Some of this can be attributed to the sector's continuing recovery after the tech bust at the beginning of the decade, but the fact remains that there are plenty of Americans who would be happy to take these high paying jobs, if offered the chance. It is further evidenced that in 2005, an additional 65,000 technology jobs were added.

According to the GAO report on H-1B visas issued in 2003, “From March 2001 to March 2003, unemployment among highly educated individuals increased by about 400,000, resulting in 1.2 million of these individuals being unemployed. In particular, employment substantially decreased within information technology (IT) occupations, for which employers often requested H-1B workers.” The whole H-1B visa fiasco just doesn't pass the smell test at all.

As successful as the decrease in the number of H-1B visas has been to providing Americans with high paying technology jobs, the Senate caved to pressure form the high tech industry, and voted to increase the number of H-1Bs up to 115,000 as part of the immigration reform package. This is an excellent example of great lobbyists in action. The technology industry, although late to the lobbyist party, has really proved to be a quick study on how to get things done inside the beltway. Look here, Congress, we need to stem the flood of illegals across our borders as part of immigration reform, not encourage more foreign high tech workers to come here and compete for American jobs at a reduced rate.

In addition to not incentivizing U.S. companies to hire foreign workers, the U.S. must fight even harder to maintain it's competitive advantage in the world economy. As countries such as China and India develop increasing industrial and technological sophistication, this is going to be even more difficult. To further this goal, we need to reward research and development efforts conducted by U.S. firms on U.S. soil. As such, congress should make the 10% R&D tax credit permanent. This credit has been in place since 1981, but requires congress to reauthorize it every so often, or it will expire. Now is hardly the time to inhibit the research required for American companies to develop the new technologies that will sustain our economy in the future.

Innovation made this country the economic powerhouse that it is today and we need to ensure that we retain the position as the world's innovator. American industry needs great basic research as the foundation for developing the future generation of technologies and products that will power our industrial base in the future. So many different world changing innovations have come from basic research in the U.S. They include the transistor, the integrated circuit, the laser, the computer mouse, nuclear reactors, digital computers, the defibrillator, genetic engineering, the Internet (no, it wasn't Al Gore, either), Kevlar, the LCD display, the LED, frozen foods, email, MRI, fluorescent lights, the pacemaker, TV remote control, Teflon, video games, DLP imaging chips, and laser vision correction.

This is just a partial list of the life changing innovations created by U.S. firms through basic research conducted in the last 75 years. If we want this string to continue, we need to get off our collective asses and get our house in order. We need a focused plan to further our R&D efforts, and develop what will enable such dramatic success to continue. The world is not standing still, and our future economic success depends on nothing less.

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Posted by debtblog at 04:02 PM | Permalink | Comments (2) | TrackBacks (0)

Your job is never truly secure. Just ask any of the 15,000 New Jersey casino workers who are on a state imposed vacation that began this morning. Why would the state of New Jersey want these workers to take a few days off? They probably wouldn't, but the state legislature and New Jersey Governor Jon S. Corzine are fighting like a couple of 4 year olds over increasing the state sales tax from 6% to 7%. Since their little spat has prevented the adoption of a new budget, the state of New Jersey has no money to pay any of its employees.

Are the casino workers state employees? No, but the state mandated inspectors that oversee operations at Atlantic City's 12 casinos are. Without them on the job, the casinos may not legally operate. So, in a move that smacks of cutting off its nose to spite it's face, New Jersey is losing the $1.3 million a day the gambling dens contribute to the state's till. Let's see, we have a budget shortfall of $4.5 billion, so lets cut out a revenue source that nets us $465 million a year. With thinking like that, it's easy to see why the Garden State has a budget problem.

Why couldn't they categorize the casino inspectors the same as the police and child welfare workers who remain on the job, so they can also keep working? It would seem that, when your state has a problem generating revenue, and probably more to the point, spending it, you'd want to ensure your most lucrative sources of income were protected. Their silly little tiff is costing the state big money with this gaffe. To top it off, the lack of state income created by the casino closings go beyond the 8% of gambling winnings taken in by NJ. All the sales tax on everything bought by hotel guests and casino visitors will also be lost to this fiasco. So now, instead of 6% of all the moneys spent by these visitors, the state will get 7% of nothing. Way to go, Ace!

This all points to why it's so important to have an emergency fund set aside to cover living expenses. Who knows how long these workers will be away from their posts? Weather you're a casino employee or a state worker, you'll be needing a little nest egg to tide you over for a while. The alternative is to charge up the ole' plastic, a bad solution if there ever was one. It illustrates how a problem in another industry can affect your livelihood, even though your industry may not have a problem.

Legislative matters and problems in other industries have caused problems in the past that impact employees. It's a virtual certainty that they could happen to your industry, no matter what it is, at some point in the future. You must mitigate such risks by having a bit of spare cash set aside to tide you over. This will minimize the disruption of your financial situation and maybe save you a small bit of financial stress.

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Posted by debtblog at 01:26 PM | Permalink | Comments (0) | TrackBacks (0)

We've been fortunate to have historically low interest rates for the last few years, and many people have refinanced to take advantage of them. This has saved the average mortgage holder thousands of dollars in interest. Take the $250,000 mortgage example discussed above. In the past, most people would have a mortgage interest rate of closer to 8 – 9%. At 8.75%, that same $250,000 mortgage would have cost you over $400,000 in interest! That's why so many borrowers were clamoring for a refi over the last few years.

Paying off your mortgage early will not only will save you thousands of dollars in interest, but will get you debt free sooner as well. Taking our $250,000, 6% mortgage example above, simply paying an extra $150 each month will save you over $70,000 in interest over the life of the mortgage! You'll also pay off your home 75 months sooner. The extra payments go straight to principal each month. If you look at how much you're actually paying toward principal each month in the early years of a 30 year fixed mortgage, you'll get physically ill, so don't do it. Just kidding, you really should know.

The first year of the $250,000 example, each month's P&I payments are $1,498.88. The interest portion of the payments are over $1,200, leaving only $250 going toward your principal each month. Each extra $150 payment reduces your loan's principal more than half what a regular payment does. That means it is basically saving you from making 60% of a payment later. In other words, at the beginning of your loan, each extra $150 payment saves you almost $900! That's a pretty good return.

You'll get offers from your mortgage company or bank for their accelerated program touting the advantages of early payoff. They typically have you make a half payment every two weeks instead of once a month. Since there are 52 weeks in a year, you'll be making 26 half payments instead of 12 full payments. Half of 26 is 13, so you're really making an extra payment each year that goes entirely toward principal. As you can see from the example above, any amount that you can reduce your principal at the beginning of the loan dramatically reduces the mortgage interest you pay over the life of the loan.

You can make these extra principal payments yourself, so why enter your mortgage company's accelerated program? The answer is, in most cases, you shouldn't. For one thing, it reduces your flexibility. You can make the extra principal payments every month, but you shouldn't be obligated to on the bank's schedule. If you choose to participate in such a program, be sure the bank is actually contributing the extra amount toward principal each month. Make sure your get a payoff schedule from the lending institution, noting the actual date the loan will be paid, and your total of payments under the accelerated program.

Some mortgages include a prepayment penalty clause. If you were unfortunate enough to sign one of these, you'll want to carefully examine it to find out the actual terms and consequences to your wallet. If there is no prepayment penalty, the equivalent investment yield of your additional principal payments are equal to the mortgage interest rate. Put another way, if you're paying off your mortgage early, it's the same as investing your additional principal payment in some other investment that pays the same rate as the mortgage interest rate. Given that, there is another school of thought that says don't pay off your mortgage early. Use that money for investing. At today's interest rates, you're getting very cheap money. It's not likely we'll see interest rates this low again for quite some time. You have the unusual ability to take advantage of these historically low rates. If you can earn more than your mortgage interest rate as an investment return, this school of thought says you should do so, and invest the money you would have prepaid on your mortgage. This will allow you to take advantage of the time tested principle of leverage to increase your net wealth. Because leverage is such a powerful tool, you can generate substantial wealth using it to build your retirement.

Having a few hundred thousand dollars to invest is a sure way to get a head start on your retirement nest egg. You must be able, however, to get an investment return that exceeds your mortgage interest rate for this to be a smart move. While leveraging your home mortgage into a retirement nest egg can be a wise choice for some, it ignores the value of being debt free. Being debt free obviously has an effect on your monthly cash flow and your psyche. Many people experience a dramatically increased sense of well being and security by eliminating all their debt. You should also make sure you are eliminating your higher interest financial obligations as well. These should be eliminated first, in any case. There's no sense in making extra principal payments every month to keep yourself from paying 6% interest when you're paying 15% interest on credit card accounts.

Only you can decide if it is better for you to prepay your mortgage. Do you want to retire that debt early and save the interest? Or, is more advantageous to keep your mortgage and invest the money and/or retire other debt? A case can be made for both approaches. Get all the information and go the way that works best for you.

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Posted by debtblog at 07:19 PM | Permalink | Comments (2) | TrackBacks (0)