Paying Taxes Worse Than Investing in the Stock Market?

The stock market is predicated by the idea that, for most of us, good investments come from patiently riding out waves of the market and, of course, buying stock at low prices and selling it when the price is high. This is a voluntary activity, though, in fairness, more and more employment retirement programs are being tied to it

Paying taxes, on the other hand, is not a voluntary activity. In fairness, we get a lot of good stuff from our taxes: schools, medical research, streets and highways, mass transit, and, oh, a social safety net, to name a few. However, it also pays for weapons of mass destruction, bailing out corporations, rewarding the richest of us, and more.

The say we have in this is limited to voting for (and cajoling thereafter) candidates who best represent our views. Note that investing in the stock market is participating in a lightly (apparently) regulated free market, while paying taxes is a result of representative democracy. In both cases, the outcomes of choices we make leave no one to blame but ourselves.

If you invest in stock, you are given a prospectus, a document that outlines the background and performance of what you are about to invest in. When choosing a candidate, you are given puffed up ads, platforms, and their word--pretty thin stuff, comparatively.

When you invest, you can pull your money out, if you don't like the direction the stock is going (at some cost, to be sure), in a democracy, you have to wait between 2 and 4 years and continue to pay taxes regardless.

If the stock market gets into trouble, one of two things happens--it "corrects" itself or it gets "bailed out". When the government gets into trouble, we foot the bill.

In the final tally, if the stock market fails, we would be seriously hurting, but the "investor class" more than others. If our government fails us by using our taxes unwisely, we all are cooked.

Bailing Out Businesses or Burying the Rest of Us?

The shoring up of mortgage mastodons Fannie Mae and Freddie Mac and the $85 billion loan to insurance giant AIG, along with the new "plan" to bail out the banks in the spirit of the Resolution Savings and Trust scheme to the tune of $500 billion to $1 trillion has got me sick to my stomach. The price tag alone should make every taxpayer wretch, as we are the one's paying the bill (and our children, and their children, and their childrens' children). This is a time when we should really question the relevancy of a two party system, when both the Republicans and Democrats decide that banks are more important than the folks who'll end up paying the bill.

To personalize it a little bit, before I was laid-off in May, I entered a Debt Management Plan to payoff old credit card debts. I ran through my severance pay and most of our liquid savings to continue making our payments. When I tried to renegotiate the sum, I was told by a representative of one our esteemed large banks that they would not help, and one of our credit counselors told me "they don't care if you go into bankruptcy, they are insured".

I grant you that the financial markets are in a much bigger jam than I am, but ask yourself how they got there? Did you ask them to take the money you pay in interest on your homes, turn it around, and encourage people to buy houses who couldn't realistically afford them? Did you ask them to charge interest rates in the lower 30% range. Bad management practices should be rewarded with $34.4 million in compensation for Lehman Brothers CEO, Richie Fuld (with the top five officers making a jawdropping $81 million), or AIG's Bob Willumstad who will leave with $7 million for three month's work?

And I am not wholly unsympathetic to the thousands of financial industry workers, particularly those who served to support the bigwigs, who came up with the lunkhead schemes, and then were kicked to the curb. It must be very difficult to live in communities where so many have been hurt by your firms and to find yourself in the same boat-- and having to pay for it!

The curious thing is now the federal government "owns" majority shares in Freddie and Fannie and AIG--what is it going to do with all these bad investments?

Now I am working to pay off my debts in full. I was raised to honor your commitments and debts. It is sad to me that while I'm paying off my debts, I'll have to pay off those of the CEO's too. Maybe we need to file a class action lawsuit against the government,as "investors," to get our money back.

Economic Justice Stimulus Package Idea

According to CNN, the collective campaigns for the presidency (minus Mike Gravel) have raised approximately $712.6 million dollars to date. So far, roughly $586 million have been doled out for campaign-related expenses.

According to the Center for American Progress, 37 million Americans live in poverty. This is 5 million more than in 2000. Of all those living in poverty 1 in 5 are children (17.6%).

Here's a thought, instead of donating to political parties otr candidates, get a tax deduction by:

Option 1: Donating to all persons living in poverty a share of the total cash given to the candidates. This is $19.70 a person, enough to have a hot breakfast for a week.

Option 2: Donating to only the 5 million who entered poverty since President Bush entered office. At $142.50, this is enough to keep someone's apartment heated for a month.

Option 3: Donating the money to only the children living in poverty which is 6.5 million kids. This is $109.60 or enough for school supplies for a year.

Economic Plan Burning a Fast Track to President's Pen

According to Bloomberg News

Leaders of the House of Representatives have reached a tentative agreement on legislation designed to stimulate the slowing U.S. economy, congressional aides said.

The accord would give tax rebates of at least $300 to individual taxpayers and offer investment incentives to businesses, said two aides familiar with the talks. It would not include new spending for infrastructure or for extending unemployment benefits, the aides said.

Lawmakers are racing to enact a stimulus measure of about $150 billion to try to avoid a looming recession. The Federal Reserve this week made an emergency cut in its benchmark overnight lending rate, lowering it three-quarters of a point to 3.5 percent. President George W. Bush said last week that a stimulus plan is needed because of a ``risk of a downturn.''

House Speaker Nancy Pelosi, a California Democrat, and House Republican Leader John Boehner of Ohio worked out details of the proposal with Treasury Secretary Henry Paulson during three meetings yesterday. Pelosi and Boehner spoke this morning and reached an agreement in principle, aides said. Leaders in both parties in the Senate will also review it.

Instead of doing that, why not sell lottery tickets for a $150 billion prize? That would be more likely to achieve the outcome than a $300 rebate check.

Seriously, what are these people thinking? See these thoughtful viewsarticle 1 , article 2, and article 3 from Alternet.

Edwards Highlights Black and White Disparity

Black and white family income disparity true according to Politifact.

During a Democratic debate in Myrtle Beach, S.C. on Jan. 21, 2008, John Edwards elaborated on his vision of "two Americas" and showed empathy toward an important bloc of Democratic primary voters by pointing out racial disparities in household incomes.

It came during a discussion about whether subprime lenders were targeting the most economically vulnerable people. He said he didn't know their motivations, but added:

"What they have done is targeted the lowest income, most vulnerable families," Edwards said. "And anybody who's paying any attention to what's going on in America today understands, if you are African-American in this country today, you are likely to have a net worth of about 10 percent of what white families have.

"This is not an accident. I mean, we can go put our heads against the wall and pretend that the past never happened, pretend that we didn't live through decades of slavery, followed by decades of segregation, followed by decades of discrimination, which is still going on today."

It appears the former North Carolina senator was relying on figures from the U.S. Census Bureau.

In 2000, the median net worth of a household headed by a non-Hispanic white adult was $79,400. The median net worth of a household run by a black adult was $7,500. The figure for Hispanic households was $9,750. These figures are based on a 2003 report.

Net worth is measured as the total value of a household’s financial assets — such as bank accounts, property and vehicles — minus the household’s financial liabilities. Though the measurement is an oft-used indicator of financial health, it doesn't always tell the whole story because the amount of income generated by a household's assets is a key factor in maintaining a desired standard of living.

Where's the Economic Justice?

As John Edwards' campaign is seemingly being pushed to the sidelines, I have got to ask, who will stick up for the majority of Americans who are suffering from economic injustice? Is it the American way to stick our heads in the sand and ignore the millions of Americans who are without insurance, without jobs or with jobs with diminished futures, with houses that are likely to be repossessed and public assistance that is rapidly eroding?

It can be said that John Edwards may be the wrong messenger to tell this story, after all, he is not in that boat. But at least he is telling the truth about what really matters in our great nation. We have always done better by raising the quality of life for the poorest among us, in fact that is the greatest legacy of our history--the expansion of the middle class.

I was fortunate enough to overhear a conversation between two elderly women in a doctor's waiting room yesterday and was tickled to hear them talk about the proposed tax cut that President Bush has made in less than glowing terms. One woman said that at least she'd be able to meet her prescription co-pay if she got the check, but didn't really think it was going to help anybody but the banks. "With all the money that people owe," she said, "I expect that people will just try to pay off their credit cards."

And isn't that the problem in the US right now? Aren't we trying to deal with past sins? Whether it is the war or the national debt, we are paying for the sins of the fathers. In the meantime, poor men, women, and children are suffering.

So who will pick up the mantle and address the real needs of the country? On the one side, there is the battle for experience versus hope, on the other, there is the fight between us and them. I believe in hope, but hope with a plan to raise people out of poverty is the only plan that should be on the table.