Monday, April 26, 2010

The Fungibility of Government Funding

A while back I wrote a blog entitled “There’s a Ford in my Future”. Among other things, the post extolled the Ford Motor Company’s proud history of not succumbing to government intimidation back during the Roosevelt Administration, and more recently not accepting government bailout money during the Obama Administration. By contrast, I also lamented the foolhardiness and questionable legality of the Obama Administration’s bailout of Chrysler and GM.

As I was listening to the radio a week or so ago, I was beginning to think for a very brief moment that I had been mistaken. The syndicated ABC radio news broadcaster announced excitedly that GM was able to pay off its government loan in full. The taxpayers were getting their money back, even ahead of schedule!.

“Could I have been wrong?” I thought. “Was this an instance where an otherwise foolhardy and irresponsible waste of taxpayer dollars actually paid off?”

These questions were racing through my mind for a very brief moment indeed when they were interrupted by the concluding segment of the news segment: “GM is still losing money”.

Thursday, April 15, 2010

Tax Day Musings: Let’s Abolish the IRS

I will grant you that the title of this post might seem a little over-the-top, unrealistic rhetoric that will turn off the serious reader. But I am actually serious, and if you bear with me, you will see why. But first let me digress with a couple of introductory side points:

Back in February I wrote a post entitled The Non-census of It All, which lamented, among other things, the whole approach to the census. Surely you have seen or heard the census bureau’s advertising campaigns stating, “Without a complete, accurate census, your community may not receive its fair share [of federal funding].” This is not the way things were supposed to work. Indeed, as I had pointed out:

Our founding fathers never envisioned—indeed they crafted the Constitution to specifically avoid—a behemoth federal government that did most of the taxing and spending. Rather, the majority of taxation and government influence was to be at the local level, where elected leaders are more easily held accountable. We have since turned the wisdom of our founding fathers on its head to the point where state and local governments are mere appendages of the federal government.

More recently I learned something else disturbing about our current fiscal and tax policy. The Heritage Foundation and others have pointed out that we have reached that dangerous point where more than half of the U.S. population pays no federal income tax. The reason this is dangerous is that, with demagogues in government always harping about those greedy rich people needing to pay their fair share, and with the majority of the population paying no federal taxes but receiving some kind of government benefits, this majority will soon realize that it can vote itself more and more benefits--and there is nothing that the tax-paying, productive sectors of society can do about it, except maybe leave the country. It is a recipe for tyranny and eventual economic collapse.

Saturday, April 10, 2010

How much do you trust Congress?

I receive a regular email update from Ric Edeleman of Edelman Financial Services. The following Q&A from his last update is quite telling:

Q&A: Roth IRA Conversion

Question: Regarding Roth IRA conversions, what is there to prevent the government 10, 20 or 30 years from now taking these Roth IRAs and changing rules and making them taxable, either all or in part, or making them subject to the AMT?

Ric: There is nothing preventing Congress from doing that. That is one of our objections to the Roth IRA and specifically to the Roth IRA Conversion. Congress says Roth IRA withdrawals are tax-free, but we get a new Congress every two years.

Planning to retire in 20 years? That’s 10 Congresses from now. If the government needs more revenue, a future Congress might decide to tax the money held in Roth accounts. You can even argue that this is why Congress allows Roth conversions in the first place: The conversion does not necessarily lower your taxes, but it does accelerate your payment of them. By getting you to convert, Congress gets the tax revenue now.
Clever, huh?

Do you trust Congress to honor its promises? The more you do, the more confident you can be about putting money in the Roth IRA. Personally, I am not terribly confident.

Indeed. I am not sure I have ever been able to put much faith in Congress keeping their word; but given their shenanigans as of late, my level of trust for them has descended even further, if that were possible.  Something to think about as the blessed day of April 15 approaches.

Friday, April 2, 2010

Alla Luce del Sole

I don’t know much about Josh Groban, but I certainly enjoy his music. The man definitely has talent.

I guess he can best be described as an American Andrea Bocelli, lending a classical style and a tenor voice to a broad variety of musical genres. Some are just sappy love songs, the typical boy-meets-girl, boy-loses-girl, please don’t-leave-me type of songs, but even these have a certain grace, dignity and class thanks to Groban’s commanding voice and classical accompaniment. The fact that many of his songs are sung in flawless Italian or Spanish further broadens their appeal.

While I am not sure of his religious background, a number of his songs seem decidedly Christian, such as his rendition of Jesu, Joy of Man’s Desiring or You Raise Me Up (Though the latter doesn’t explicitly mention Jesus.) Others , such as Remember When It Rained (one of my favorites) are even less overtly Christian, but they have all the markings of a believer’s prayer.