Be Careful What You Wish For

I have a thing about reading my email messages and gleaning material for columns from them. That is the case this week.

I received a message with pictures from one of my buddies. I’m almost certain that you’ve seen it too. It concerned a huge container ship named the Emma Maersk. Maersk Line, a Danish company, owns the Emma Maersk, but it is apparently used exclusively for shipment of goods from Mainland China to the United States.

After listing all of the statistics on the size, speed and capacity of the Emma Maersk, the very last paragraph relates that the ship only carries cargo one way, and always returns to Asia empty. And of course there is the usual lament that we are purchasing all our goods from China while manufacturing here at home is languishing and disappearing.


As usual, the message ends with a proposal that we boycott all goods coming over from China–there is another message out in the Ethernet that shows how to identify foreign goods by the beginning numbers on the bar code–and buy only American products.

I am going to take issue with that inflammatory paragraph. Yes, we are buying a lot of goods from China (and Bangladesh, and India, and Japan, and Korea, etc.) and the quality and safety of those products is becoming a real concern. That being the case, the selective bad products have a way of seeking their own boycott. We don’t buy what we don’t trust. The plan that is being fostered is to boycott all products.

However, I don’t have the same view of our deficit spending on foreign goods, especially those we buy from China. What do you suppose most of that money we send to china is used for? If you think it is used to build the infrastructure of China, you’re wrong.

Most of the money we spend on Chinese goods is used to buy United States Treasury notes. That’s right, China is financing our reckless spending. In fact, China practically owns the United States government. If they ever decide to quit buying our T-bills (and there is a lot of pressure building to do just that) we could go bankrupt in short order.

I don’t like the fact that China is our largest investor in federal bonds, but I like the alternatives a heck of a lot less. As long as we continue to purchase from them, we at least have some support for our dollar. If we were ever successful in boycotting Chinese products, all they would have to do is threaten to cash in some of those bonds, and we would have to relent. Otherwise, our current economic troubles would look infinitesimal in comparison with the turmoil we would have as a result of our boycott.

So, the fact that the Emma Maersk is going back to China empty isn’t all that bad. After all, it doesn’t take a huge container ship to float all those bonds to China. All the goods that come this way are being sold to finance our way of life for us.

I believe the saying is, “Be careful what you wish for.” And I know, the grammar is wrong, but that's the way the saying goes.

Coincidence

Co-in-ci-dence (kō in΄sә dans) n. 1 a coinciding 2 an accidental, but seemingly planned, occurrence of events, ideas, etc. at the same time


I know you’ve heard the expression, “There, but for the grace of God, go I.” Well, I have a story to relate about just how appropriate that expression was to me last week.

Call it a miracle, or a coincidence, or lack of coincidence–the meaning of that word will become clearer shortly–but I escaped what could have been a life-ending event on March 12.

I had just that day heard about the falling rock that killed a woman in a 2004 Buick near Steamboat Springs, Colorado two days earlier. It was one of those freak accidents that has probably a one-in-a-million chance of happening, but in this case it did. A small boulder fell from the face of a cliff and went through the roof of the car traveling over the road below, killing the woman passenger.

At about noon on Friday, I was traveling eastbound on I-20 near Aiken, SC. I had my cruise control on and was barreling along at 70mph. There is a stand of pine trees in the median between the eastbound and westbound lanes, so you don’t even see the traffic going the other way.

About 200 yards ahead of me a wheel, most likely from a truck on the westbound side, came out of those pines up ahead. No, it wasn’t a tire; it was the whole wheel with a tire mounted on it. Needless to say, it looked HUGE.

The wheel rolled down the embankment onto the pavement, and when it reached the concrete it started bouncing. It bounced straight up about 10 feet and back down in the lane right ahead of where I was driving.

When a tire, or any disk-like object starts bouncing, it is possible for it to come down sideways at an angle. From that first bounce, it is unpredictable what the tire will do and which direction it will roll. This one landed straight up and then continued its roll and disappeared into the forest on the right-hand side of the road.

The whole thing took place in the space of about 10 seconds. I figured out later that I had missed being in the path of that bouncing wheel, by about 3 seconds. I didn’t even have time to react. I just watched incredulously as it crossed in front of me.

There is no doubt whatsoever in my mind that I would have suffered the same fate as that poor woman in Colorado, and you would have been reading or hearing about me in the news media.

Yes, the word coincidence really did play a part in my story. Had my car and that wheel arrived at the same spot at the same time, I would have been history, but the incidence was a few seconds apart and I’m here to tell the story.

Do I believe in miracles? Well, not really, but that was the closest thing to a miracle I’ve seen in my lifetime. It took about five minutes for the shock to set in, and then my mind started replaying the whole sequence of events.

Whew!!! Somebody or something was sure looking out for me that day.

Unintended Consequences

Current legislation in Congress has once again caused some unintended consequences, and you and I, the citizens whom the politicos in Washington represent, are going to pay for it.

The first underestimated bill hasn’t even been passed yet, but there is pressure on from President Obama and those who back him to get the Healthcare Bill through Congress so that he can sign it into law. It has been “underestimated” in several ways, but one that wasn’t even considered concerns healthcare premiums.

There is a huge hue and cry about the increases that went into effect at the beginning of the year, especially in California. Some premiums for self-insured users, along with the increase of deductibles and co-pays, are as much as 40 percent above last year.

What did we expect? The insurers know that if the current healthcare plan passes, they will have to accept many people who were previously excluded or charged higher premiums due to pre-existing conditions or added risk. They also know that the government will not allow any markups for those conditions, so the insurance company will be paying out a lot more benefits. The only avenue open to the insurance provider is to charge higher rates now, before the legislation becomes law.

You don’t believe me? I heard Carl Rove admit just this week that the Bush-43 Administration severely underestimated the number of people who would take advantage of the Medicare Part D prescription drug provision that went into effect back in 2006. Millions more signed up for it than had been anticipated.

Why? Because employers who were then providing drug coverage for employees and retirees at tremendous cost saw it as a way out. They forced their retirees to sign up for Part D by withdrawing those benefits.

A benefit that was supposed to aid those who truly couldn’t afford their drugs was inadvertently forced upon and became the norm for everyone over age 65.

The other unintended consequence that is out there is the latest scheme to give tax breaks to companies that hire unemployed people. The recently passed Jobs Bill allows those companies that hire the unemployed to forego the 6.2 percent Social Security payments through December for any qualified hires and also gives them an additional $1,000 credit if the worker stays on the job for a full year.

In order to qualify for the credit, the new hire would have to have been unemployed for at least 60 days. That isn’t much of a qualification, but it has some drastic unanticipated side effects.

Those people who have been unemployed for so long that they took either lower paying jobs or took jobs that are Part-time or conditional/seasonal, are in the crosshairs, because they will not qualify for the employer credit under the Jobs Bill. That puts them at a big disadvantage when seeking full-time, higher paid employment.

The government is putting those who have not gone to work at all, possibly because they find no incentive to put in work hours, ahead of the people who have struggled to make ends meet on lesser pay. Those in the qualified category now have a full two years of benefits in the form of unemployment payments and food stamps, plus other assistance in some cases.

Let me get this straight… The guy or gal who sucks it up and goes to work for less pay in order to keep their dignity is now in line behind the slackers who are, in some instances, drawing as much as $40,000 per year plus food stamps for staying at home. (I won’t tell you exactly how they do that, because I don’t want to encourage even more of that kind of behavior)

I know that there are lots of people among the unemployed who are genuinely trying to get work, and if you are one of those, I don’t intend to blame or shame you. I’m only pointing out the odds of upgrading from a low paying temporary job to one that is equal to the pay and benefits you lost. You have to admit that the credit available to employers places a handicap on some who don’t deserve it.

I thought it was bad enough when congress extended the unemployment benefits to make the United States the only country in the world that pays for a full two years. The Jobs Bill is even a worse piece of legislation in my opinion.

Now maybe we’ll be fortunate enough that those bloodsuckers that haven’t even tried to find work will continue to sit at home and collect their unemployment. After all, they aren’t the ones who benefit from the tax credits provided by the Jobs Bill.

Parallels

There is an interesting phenomenon taking place in the world. It is unique in that it involves four catastrophic events that have all occurred within the short span of five years, and how the people to whom they happened dealt with the aftermath.

Of course I’m referring to Hurricane Katrina, the El Nino brush fires in Southern California, the huge earthquake in Haiti, and the even stronger earthquake in Chile.

I have seen the messages that circulated after the fist two events that highlighted the difference in how the affected citizens responded to the disaster. But I haven’t yet seen any comparison of the two earthquakes that occurred within a few months of each other.

The numbers might be off, due to passage of time, but here is what I know about the earthquake-ravaged island nation of Haiti:
· The 7.0 earthquake hit on January 12, 2010.
· The death toll has risen to somewhere above 500,000, a highly suspect number.
· The nation is still in a state of turmoil and need nearly two months later.
· Hundreds of millions of dollars have been donated or provided for disaster relief.
· Dictators Castro and Chavez have called the troops sent in by the U. S an “occupation force”, implying that they are not welcome there.
· There is no end in sight to the misery and loss of the Haitian people, regardless of the continued aid, food and money being pumped into the relief effort.

Here is what I know about the earthquake-ravaged nation of Chile:
· The 8.8 earthquake occurred offshore in the Pacific Ocean on February 27, 2010. This caused, in addition to the quake damage, a tsunami that came ashore shortly after the quake and devastated low-lying villages.
· The latest death toll as of this writing (3/2/2010) is 746, but thousands are homeless, and the infrastructure of the country is in a shambles.
· Chilean President Michelle Bachelet said that though the earthquake devastated central Chile, she was not requesting international assistance. However, there has been some aid and assistance from (who else?) the United States. It has, however, been minimal, and has not included any people for rescue, only equipment.

Do you see the same parallels that I see in these two events and the earlier disasters in our country?

Does the Haitian earthquake resemble in scope and numbers the Hurricane-ravaged city of New Orleans in 2005?

Is the response and reaction of the Chilean President similar to the word that came from the officials in the devastated areas around San Diego after the extent of the damage was learned.

Have we seen video and pictures of the looting taking place in Chilean cities like we saw in Haiti?

In a way, I feel sorry for the people of Chile, because the United States citizenry is pretty well tapped out on aid through donations. We have economic problems here that might prevent many of us who would otherwise donate generously to pull out our empty pockets and remark that we already gave what we could to the Haitian relief effort. We have nothing left to give.

It is a courageous thing that the Chilean President is doing, trying to cope with the devastation and not requesting aid. However, if it does become necessary, I wonder if some of the other South American countries will chip in and help the Chileans. Or maybe the African nations could lend aid and manpower to the effort to save Chile. Surely the Europeans can come to the rescue.

I know the Asians cannot help, because they are still trying to recover from the tsunami that hit in 2004 after the earthquake in the Indian Ocean.

Isn’t it sad that we seem to be the only country in the world capable and willing to lend a hand when disaster strikes? Yet, according to our president, the rest of the world despises us for our arrogance and waste and pollution?

I’m sorry for bringing politics into this, but isn’t every disaster that strikes, regardless of origin, used for political gain of one form or another?

Kangaroo Court

I watched some of the Congressional Hearings on the Toyota debacle this week, and I was furious with the Representatives who pilloried, harassed and humiliated the Toyota executives, especially Mr. Akio Toyoda, the CEO of Toyota.

Most of the “Gestapos” seemed to think that Mr., Toyoda should commit Hara-Kiri over the scandal, and the scene brought memories of the late Representative Tom Lantos’s remark to Craig Livingston, “Even Admiral Boorda committed suicide.”

As far as I can determine, there have been nineteen deaths attributed to the sticking accelerator problem, and while I am not insensitive to the loss of life it caused, I am not ready to boycott Toyota. I also do not think the “crisis” warrants prohibiting Toyota from selling their products in this country.

However, the best opinion I have read regarding the Toyota recall is that of one of my favorite columnists, Charles Krauthammer.

Instead of writing my usual column this week, I am going to provide a link to Mr. Krauthammer’s syndicated column from the Washington Post and let you read it. If you have already done so, than I commend you on your astute selection. If not, please take a few minutes to learn what this man, who himself was permanently paralyzed and almost killed in an auto accident, has to say.

I do not have permission to reprint the article in my column, hence my providing the link to it instead.

http://www.washingtonpost.com/wp-dyn/content/article/2010/02/25/AR2010022503115.html

The Ideal Solution

My wife and I have been discussing the gloomy prospects in the years ahead. We are avowed conservatives, and as such, we absolutely abhor the current actions of the idiots in Washington–both parties. Faced with healthcare reform (deform?), cap and trade, global warming legislation, and on and on and on, we are not happy citizens.

Since both of us are already on forced Medicare, we have to be very concerned about what the future holds for senior citizens. I planned ahead, squirreled away a nest egg for retirement, and managed my finances carefully. However, I don’t know that we are going to be able to keep it in light of the Obama/Reid/Pelosi conspiracy to redistribute the wealth.

I’ve taken stock of our savings and our health, and have come to a conclusion: Judy is probably going to outlive me by a couple of decades. My parents died at age 79 and 80, while her dad lived to 95 and her mom is in her 90s and still going strong. That doesn’t bode well for us to both live to a ripe old age.

I had a brainstorm the other day about how Judy can make it to 100 or more if she does it right. What’s more, it’s all perfectly legal in a very strict definition of the word “legal.”

I’m sure you’ve all seen that email message that compares the cost of a nursing home to staying at a Holiday Inn. In case you haven’t, the Holiday Inn at $60-a-day beats the cost of a nursing home by a long shot. Well, I’ve decided to go that one better. My alternate plan for my wife is free and includes meals and healthcare. Here it is…

If Judy outlives me—I’m reasonably certain she will—and she sees that the money is running out, I want her to go rob a bank. I don’t want her to use a real gun or do anything that dangerous. A mere note will do the trick.

The note should read, “I have a gun in my pocket, but it isn’t loaded–yet. I don’t want you to get hurt. The bullets are in my other pocket, so I can load the gun if I need to. NOW, GIVE ME ALL OF YOUR CASH!”

Not only will she get caught without any shots being fired, but she might also qualify for that list of “Dumbest Criminals” that circulates amongst my email buddies. She can get her “fifteen minutes of fame” to which Andy Warhol promised everyone is entitled.

No, no, the bank robbery isn’t meant to get any money. It is to get a jail sentence at a federal penitentiary, preferably a long one. Life without parole will do nicely. Have you seen what those federal prisons look like these days? They have 55-inch flat screen TVs, recreation rooms, great food, and hospital facilities to die for. (Well, maybe not to die for, but pretty neat and FREE!)

Oh, there is a slight inconvenience in that she won’t have her freedom, but then, those people in the nursing homes don’t have any freedom either. My mother-in-law is in one and she hasn’t been off the grounds in several years.

Relatives are much better about visiting you in prison than they are in nursing homes, mainly because the conditions are a lot better in the prison visiting areas, and there isn’t that nasty odor that usually permeates the nursing home. Not only don’t they have to bring gifts, mostly they aren’t allowed to do so, so there’s no need for excuses either.

All in all, I think I’ve hit on the ideal way to get around the Bulls**t the politicians in Washington are giving us. Judy can take advantage of the system and not even feel guilty.

Just in case you’re tempted to use my idea for yourself or your spouse, make sure to make the robbery a federal offense. Don’t go for convenience stores or home invasions. Those will only get you a state prison, and I hear the conditions in those places are terrible. Besides, convenience store clerks and homeowners are wising up and getting their own guns to shoot you if you try to burgle them.

Now, if bank robbery seems too dangerous for you, try counterfeiting. That too is a federal offense and will be worthy of a good long sentence. You don’t even have to make good replicas of the currency, since you want to be caught anyway. If you’re really nice, you can save the cost of a court trial and just plead guilty when arraigned. The judge will probably sentence you immediately.

Making Work Pay Credit

In March of last year, I wrote a column on the (then) new Stimulus Plan that congress and President Obama enacted. At that time I advised those of you who still have earned income that you would see an increase in your take home pay of about $13 per week. However, I also warned you that you would likely have a problem filing your taxes in 2010, because there was no provision to lower your tax rate in order to make the payment tax-free.

Now I have some good news for you. That additional money in your paychecks from April through December may be erased from your taxable income as a credit after you compute your federal tax. However, it won’t be credited unless you submit an extra tax form, Schedule M, with your federal tax forms.

The credit, which is titled the “Making Work Pay Credit”, is even better than a reduction of your taxable income. It is actually a direct reduction of your tax. I’ll explain that in a moment.

(At this point, if you are retired like I am, and have no earned income–an entry on line 7 of your 1040–then you may as well quit reading right here, because you already received your stimulus payment of $250 back in April of 2009, and it was already tax-free)

If you received that increase in pay back in April, then you have already received your stimulus payment in increments, but now you have to account for that extra money to deduct it from your taxable income. To do that, you must file Schedule M with your tax forms.

I am not a tax preparer–although I once did work for H&R Block in that capacity for several years–so I will not attempt to give you instructions on how to fill out Schedule M. It is, like most tax forms, comprehensive–a long erudite word meaning “complicated.”

The maximum credit is $400 ($800 if married filing jointly) and there are a lot of conditions and exceptions that must be met or overcome to get that amount. The good news is that whatever amount you are able to deduct comes off dollar-for-dollar from your tax. Hoorah!!!

Let me explain… There are three types of reductions to your income tax, deductions, exemptions and credits and all are good. However, one is better than either of the other two, and that is the credit. Deductions and exemptions reduce your taxable income, but a credit actually reduces your tax. That is why credits always are figured after you arrive at taxable income and compute the tax on that amount.

While deductions and exemptions reduce your taxable income by whatever tax bracket–or percentage–you are in, credits always reduce your tax liability at 100%, or dollar-for-dollar.

For instance, if you are married, filing jointly in the twenty-five-percent tax bracket–you pay 25% tax on your last dollar of income–and you use the standard deduction of $11,400 (2009 amount), then you are actually deducting $2,850 from your tax liability. Let’s say your total tax comes to $3,000 after you deduct and exempt all the legal amounts. If you get a credit of $800 for the Making Work Pay Credit on Schedule M, you get to subtract that entire amount from the $3,000, making your tax due only $2,200. That erases $3,200 from your earned income ($3,200 X .25 = $800). Pretty neat, eh?

I suppose I should complain here that my wife and I didn’t get $800 off our taxes, and we only received $500 tax-free from Social Security. However, we are no longer productive members of society (ie.-workers) so I will take what I got and be happy with it. Besides, we don’t have to fill out that Schedule M, and that itself is worth it.

Okay, now you know. Don’t forget to file Schedule M and take your tax credit. Oh, if you use a tax service like H & R Block or Jackson-Hewitt, they will do the calculations for you, and even if you use TaxAct or TurboTax software, that will also include the credit calculations for you. I recommend that you use TaxAct online anyway to check your work since it is a free service for the federal return.