Sunday, January 30, 2011

Reducing the Federal Debt- A few suggestions-2

To start with although it will hurt the most but for the sake of the greater good, we should eliminate Mortgage interest rate deductions. This is immediately cut according to one calculation more than 100 billions in immediate revenue. Another one is we should reduce the personal exemptions to only 1000 dollars and that should remain constant yearly. We should also increase the gasoline tax from the current 18.4 cents to 40 cents which would immediately cut our oil consumption and increase the revenue to build more and better roads and other means of transportation. Medicare should be restricted to only certain levels of income and higher income (which can be debated) should be eliminated.

Social security taxes should be on every level of income. Corporate tax should be reduced from the current 35 percent to a more acceptable 25 percent and it should be across the board. Health insurance benefits should be taxed. Cases won in the Federal lawsuits should be tax at ordinary income and special tax rate on capital gains should be eliminated. There is also no need to provide tax exempt status to some inheritances and estates and every thing should be taxed at ordinary tax rates. Defense expenditure can be reduced by eliminating our so called security interests since in this current financial environment we cannot defend our interests everywhere and the most important security interests should be defended with of course financial help from the countries involved. Although most of my suggestions can be broadened or even curtailed but I am sure that we can reduce our debt if we can take bold and unpopular steps.

Reducing the Federal Debt- A few suggestions

Since the Federal Debt has become a big issue, many suggestions have been floating around regarding how to pare down the debt to manageable levels. There is no one solution. Most of the solutions have not touched the sacred cows of Entitlements and defense, but if we don’t have address that, there can be no credible dent in the nation’s debt. As I have been constantly writing here that without an increase in taxes, the debt will remain high, but in the meanwhile there are several ways, we can reduce the debt with a slight touch to the entitlements and defense (if we want it that way).

As I also said before, last semester I took a course in Federal Individual Income Taxation and I was really surprised to see how much we reduce the tax burden by giving people, exclusions, exemptions and deductions to come up with a taxable income. If we eliminate all these we can at least put some dent into the public debt and we should be sincere enough that those savings should not go on to be spent on other expenditures. Although it will hurt most of the people in the short term, but after some years, people will adjust to it and we would not have to face the specter of higher interest rates down the road. Before I start with my suggestions, I would like to point out that tinkering with the taxation code would not be enough and that some kind of changes to the entitlements and defense budgets would have to be tackled if we want to reduce out debt to manageable levels and satisfy the markets and investors.

On the lighter side- Movies- Surrogates

Bruce Willis and Radha Mitchell stars in this futuristic action movie regarding robots running daily life while the real people stay indoors secure. Then one day a murder happens and our heroes (both FBI agents) start to investigate and find out that the creator of the Surrogates is behind the killings since his son has been accidentally murdered before. Intriguing idea and entertaining. I enjoyed this movie and so would you. Recommended.

The new unsustainable Deficit numbers

So now that the new deficit numbers have been released which are mind boggling what the politicians are going to do? Maybe start taking some action or the same old bickering and fighting about how to cut the deficit. The tax cutters and tax raisers will log horns with each other and it will go on. Since the sacred cows will be protected at any cost, we will have to look at other ways to reduce the deficit. But are the politicians brave enough even at the risk of losing the next elections take bold steps to stop this ever rising debt. There are so many questions but the solutions are few and far between, but even when they are there, the bipartisan politics come in between.

The sacred cows (Medicare, Medicaid, defense and social security) are not touched and the remaining we can’t reduce either which is the interest on the ever growing debt. If we don’t take bold actions now, our future generations will see the reduction or even elimination of entitlements since our debt will be assumed by other investors at high interest rates. And it is not just that but other long terms interest rates on car loans, mortgages, credit card and the like will see higher levels of it. Although it is nice to see that finally every body is talking about debt but the solutions are very distressing and nasty to say the least.

Discriminations, prejudices, racism and the like

If you ever thought that discrimination or prejudices have gone, just think again. It is really alive and well although in subtle forms. If you want to see somebody’s true nature, try to see him angry at somebody and you will see that despite all the laws against discriminations, hatred, prejudices, you can’t change one person’s nature, even if he is ultra educated. Even when you go for an interview, if you are above fifty or look like one, you would not be hired mostly even though they will not say that was the reason. Here it won’t matter much if you are a minority or a majority; the age factor is one of the decisive ones in hiring right now.

Then there is the age old prejudice called racism which is really alive and well and to be fair it is not only in the United States but all over the world. It is just that people feel uncomfortable with people who are different from them. It is nothing personal, just that it has been fed into them the stereotypes that are prevalent in the popular culture.

Sexism is another of the prejudices that mostly affect women and it still happens today. Although many laws are in the books outlawing discrimination on the basis of race, national origin, ethnicity, color, sexual orientation, but still it is prevalent only subtly but prevalent nonetheless since human nature cannot be changed. It is really up to the parents to instill in their children tolerance of other people regardless of differences.

The Revolution in Tunisia

The surprise revolution in Tunisia which toppled a 23 year old repressive regime has surprised most of the world particularly the Arabs because it was not suppose to happen this way. It started with a the self-immolation of a young person who was selling perishables whom the authorities deemed that it did not have a license and then it escalated into street protests and it is still going on. Copy cat protests and demonstrations have started in Egypt and Jordan and the passive public fed up with high food prices, limited job opportunities and the extravagant life styles of their leaders are venting their wrath on the streets of the Arab world.

This was bound to happen sooner or later. But it will be interesting to watch that if there will be a domino effect from the Tunisian revolution and how the U.S. backed government in that area fare in the longer run. For now, the governments in the Arab world are firmly in control and the people are too passive and timid to mount any real challenge to the Arab rulers. But you never know and before it starts to become anti-American protests, the U.S. should do well to support them. But would American government support such protests which may bring Anti American governments all over the Middle East, which is the question the leaders in Washington must be grappling with now.

The New increase in Salary-Decrease in Social Security

A few days ago, I received my first salary check of the year 2011 and saw a pleasant surprise that my contribution to the social security kitty will be reduced by almost two-thirds and the rest will be paid by the Federal government. All in all I have read that in order to make up for the shortfall; the Federal government will borrow more than 100 billion dollars in debt so that we can enjoy our increased amount in pay. This is good for the common people but again, the Federal debt will rise, although most people are not that concerned with the Federal debt (I highly doubt that) and in the long run, we will all end up paying for it through higher interest rates.

This is the main problem, who does not like lower taxes and more take home pay, but then how will the government be run, obviously they will have to borrow it and then more debt piled up and that means more interest and in the longer term, we will end up with higher interest rates on everything debt, like car loans, home mortgages etc. This is not being emphasized by the politicians and they are happier in cutting taxes than finding out how to raise revenues. They are just crossing their fingers in the hope that the higher growth in economy will take care of the situation, but this time around even the growth in economy will not be able to reduce the debt until we stop spending more than what we take in as revenue.

Friday, January 21, 2011

The variety of foods

I have been fortunate that I live near the biggest city of the United States- New York and that means that I am exposed to a world full of different culture and that means different ethnic food. There is a huge variety of food in New York City and if you don’t want to sit inside, you can still enjoy your food with hundreds of food vendors on the sidewalks of the city. But mostly these sidewalk vendors don’t offer that much variety as you can get hotdogs and some ‘Halal Food’, but once you start exploring the restaurants you would find that you can eat almost any ethnic food. There are Asian, European, African food and South American restaurants.

Every culture who have established themselves in this city have tried to maintain ties with their home countries and food is one of the main identities that they want to keep and thus you see different nationalities restaurants in almost every neighborhood of the city. But apart from their own country folks, other nationalities also enjoy foods from countries other than their own and this somehow makes city unique. Although now we find various ethnic foods and restaurants in almost all the major cities of the country, but I believe that since New York City is a melting pot with United Nations and almost every member country represented here, we see varieties of food found here unparalleled

Over renovations of homes.

Okay there is such a thing called renovation of a home. You fix some stuff, maybe change the color of the house, add a room, do over their kitchen, construct a new bathroom, add an in ground pool, do landscaping. But when all this comes together than you have a problem. If you are going to spend the same amount of money on renovation that you spend on buying a house, I see that as an overkill of sorts. I can understand that maybe the neighborhood is nice or your kids don’t want to move, but to have a super major do over is to me a waste of money. You had rather be fine with having bought a property with the same amount of money.

This kind of major renovations will definitely increase your property taxes, so why not split those increases by buying another property and renting it out. I also know that being a landlord is not everybody’s cup of tea but still it is an investment rather than expanding the same house on the same amount of land, going to major permit hurdles and annoying neighbors in the process just that you have super extra space. As I said before a renovation here and there is fine but when you have spend hundreds of thousands of dollars on a house worth almost the same amount of money then your priorities are out of sync. And on top of that, if you want to sell the house further down the road, you may find it hard to find comparables so that the buyers and the appraisers can make comparisons since your house is a unique property in a neighborhood of middle class homes.

Sorry state of priorities-Salary Inequalities

Recently a news item came about how the traders make more the double the surgeons. It was obvious from the start that the traders, athletics and movie stars make more money than surgeons. Even the Generals who command thousands and thousands of troops make almost one fourth to one fifth of the salaries the trade makes. It is just a sorry state of affairs that the people whose makes life and death decisions for other people are paid so low on top of the debt they incur going through the medical school and the years of training the Generals go through to reach where they are.

Although I can understand that some individuals have unique abilities that may command high salaries-like the demand and supply, but surgeons and Generals are not unique people. They really work their butt offs to make it where they are and still get short changed by some thirty something trading securities. I know that sometimes trading is a high pressured job but to give them ridiculously large sums of salary ahead of the life saving Surgeons and Generals (whose jobs are more high pressured) is beyond my understanding.

The state of Financial Stress

At least according to my belief, nothing stresses you out than your financials. And now the same is being true for the state and federal financials. States are in a terrible shape partly due to their own excesses and partly due to the recession. For an individual, the stress that financial problems create can have an ill effect on your health, life and your marriage. If you don’t have enough money, you are at the mercy of others, your bills don’t get paid, you cannot eat, do things you want, your health is adversely affected and you have fights with your spouse on money matters.

Even money is not everything, and many things can’t be brought by money alone (like loyalty, health, love, respect-although it can in front of you at least) but still the most import matter is money and even with this severe recession, most people don’t have clue how to come to grip with their financial situation. This is true by watching shows on television where ordinary people ask for help in managing their financial resources, since it just sometimes makes you very unhappy. This is being realized by states now since the money problems are straining the budgets and they are scrambling to find new venues of revenue. All in all the state of financial stress will continue to haunt the states and individuals alike.

The State of the State Future

Illinois has just announced a whopping 66 percent increase in state personal income tax to try to bring down its huge budget deficit. This was a long time coming. I don’t know if this trend will continue since most of the states are being controlled by Republican governors and even if they are not, no state wants to increase taxes to kill whatever jobs there are or whoever is contemplating to move in. but this will be the shape of things to come in future since the jobs are not there and state and federal regulations reduce the incentive to invest. We will see if this tax increase will be a job killer or people will realize that it has to be done.

See this recession has finally expose the shaky financials of all states. They got used to years of growth and kept on promising state employees big increases without putting enough funds for a rainy day (and by enough I mean at least a year worth of spending), while at the same time, cutting taxes to the bare bones and now its is payback time and the federal stimulus money is going to dry up this year and then the states will really hit the wall with the expenses. So the states and its inhabitants should be prepared to face the deficit music.

Over abundance of job search advices

There is so much advices about how to search for a job, what to do and not to do at an interview that it just becoming overwhelming for some. For some they have all done it and followed exactly what the experts said but they are still not getting jobs. Can we also include that you have to have luck besides hard work to land a job. Every day I see one of the experts come on the internet to say that we should not say or do these or those things when we are interviewing or we should use multiple channels for our job search and with some changes here and there it is the same old advice being repeated again and again.

Although initially it was nice to read the advices but if you keep on reading the same thing over and over again, it just becomes a broken record and you just become your own expert. So people who have been out of a job for a while and have followed with every advice out there, they can make their own judgment and find something unique about them and stand out since you are not the only one reading the advices there will be millions out there doing the same. So now the situation is that you have to be unique in some way so that you can stand out among millions of common folks in order to land a job.

The Arizona Killings and Political Infighting

The horrible Arizona attack on a congresswoman and other people is highly condemnable. But what is more outrageous is the fact that instead of coming together both the Republicans and Democrats. The mud slinging has started that due to the heightened political rhetoric, this tragedy happened. Nobody seems to care that the guy who did the shooting was mentally unstable and nobody alerted the authorities that he had weapons in his house. All the fighting is about how the Republicans have charged this atmosphere so tense that the guy went crazy and starting killing. I just believe that this country is so much divided into Republicans and Democrats, conservatives and liberals and the like that even this kind of tragedy does not tone down the charged and toxic atmosphere of partisanship.

Instead of blaming each other for the economic mess and how the country is proceeding, we make issue out of this kind of tragedy and start our own political agenda. I know that the Political infighting is going on and it would not stop but can we at least see this tragedy with the lens of a violent person and not a Republican and Democrat issue. The real issues of the people are being sidetracked by senseless name calling and mud slinging. This has to stop if we want our country to move forward with more pressing problems (like economy, Jobs, budget deficit, etc).

The Investors in Ponzi Schemes

I have been following the events in the Ponzi scheme that allegedly stole billions of dollars and the effort by the main lawyer to track this money down and reimburse the investors who have lost the money. I really don’t understand how these people could have not checked their statements and figure out something was wrong. Now claiming innocence does not cut it with me. I mean if you are consistently getting growth after growth in your portfolio while the economy is going down, will you not feel a little bit suspicious that something was wrong. I can’t believe for a second that you can rely on some statement and feel happy that your supposed wealth is growing and you take money out of it.

Now crying foul that you were deceived and you are claiming the fake numbers to say that you earned that much money is totally wrong. And these so called investors should have known that you don’t put all your eggs in one basket and you should diversify your portfolio. Here we have to look at the fact that the investors who should have done their due diligence and constant vigilance to make sure that their money is not going down the drain. Individual responsibility should be a must in this case and blind trust is no substitute for alertness when it comes to your finances.

Saturday, January 15, 2011

The rise of Intolerance

There has been an increase in intolerance around the world and it has more to do with economic uncertainty and fears than anything else. Every where this rise is giving into the rise of extreme far right and nationalistic (and some would say) xenophobic sentiments. This was not the case a few years ago but due to the extreme recession and the easy availability of internet and all the garbage that it contains has created a sense of fear in Europe and other countries. It has also arisen in America but not that much since here it is the nation of immigrants. Nobody can claim that they are the original inhabitants of this country since the Native Americans were here long before the arrival of Europeans.

But it is the fear of losing jobs to competition and the fear that the immigrants will dilute their culture and maybe they will get swept away in the sea of strangers. I can understand this since the original Europeans are not producing more kids than the immigrants arriving, but it was going to be inevitable as a nation cannot keep on growing only upon its own people. It is also that the immigrants arriving from places are so poor and desperate that they do about anything to reach the prosperous shores of rich nations even if they know that they will be discriminated heavily against. If we have to stem this rise of intolerance we will have to pay attention to the poor countries economies and give them aid so that the people stay there and not arrive for a perceived prosperity that is increasingly become out of reach even for the natives.

Product endorsements

This is a huge market which rides on endorsement by celebrities to sell their products. I really don’t get it, but maybe I should. People go crazy when some big or even little celebrity endorses some products. They stand in line to get the latest and sometimes limited edition of some product endorsed by their favorite celebrity. But this product endorsement is added to the cost of the product. I don’t think I have ever bought a product based on what a certain celebrity has endorsed. But why do these products need endorsement from a celebrity to sell. I can understand that if the lines of product are made in the name of the celebrity. But to make a product endorsed by a celebrity for no reason but to sell a cheap product is beyond me.

Even if you can assume that the celebrity would not endorse anything cheap which can tarnish his or her reputation, but why buy the product when it will give you the same level of service as a non-endorsed (read inexpensive) alternative.It may be that of something like a status symbol or some complex that the person may have about oneself or the fact that being one of the exclusive one among your friends make you feel proud or superior. But at what price. You would have spend your hard earned money, satisfied your ego and in the meantime make yourself a lot less poorer.

Is the world relying on US Military Power?

America has been providing military protection to the world for the last sixty or so years. We have now become the World’s Policeman without being compensated for it and we are na├»ve enough to go along with it. Unless the United States Military get involved, almost nothing gets done (for example, the Kuwait war in the 1990s, the Bosnian war and many other examples). We don’t have the money to pay for this entire defense but we are happy to provide protection to the world by borrowing money from the world. It is like we have become mercenaries for other nations. Our defense budget has now ballooned to more than 700 billion dollars and it keeps on going up with borrowed money to protect areas which are not even sometimes vital to our security interests.

If the nations who pay us to protect them can get their act together and have a united front, they can raise an army strong enough to protect them from perceived threats from bigger countries. But as long as they know that America is going to come to their rescue by raising real and imaginary boogeyman, they will keep on getting our protection and we will be sacrificing our men and women in the armed forces for other people’s weaknesses and cowardice. While we protect other nations, they are growing stronger economically while we are losing our competitive edge and getting more into debt. How long are we going to let this happen?

Tuesday, January 11, 2011

Buy more to save more

I always see this in many advertisements in the newspapers and internet and on TV. It is simply obvious that the economies of scale are at work here. The more you buy of the same stuff the less money you have to pay (unless you are in the retail store. That is why the wholesale clubs are so popular that you can buy items in bulk and pay less per item of it. But the retail chains when they advertise this are still selling the stuff way above their wholesale price as they order hundreds and thousands of the same items to put in their hundreds of stores. When I see people sometimes asking how the power sellers on auctions sites can sell so cheap, it is just that they buy the items in bulk and sometimes in closeouts.

But if don’t want to buy two or more items, then you are at a loss since you would not be saving much money because the individual items cost more than bulk items. So the retailers sometimes force you to buy more stuff in order to achieve the savings but for you if you don’t need it, you would let it go to waste and hence you waste more money that way. So if you need only item, try to buy that one and save then getting two of the same thing which you don’t need.

The fear element

Everybody is fearful of something. It is a natural characteristic of human that they have a fear of something, which is why you see every year; a number of Horror movies come out playing to the fear of humans. Apart from movies, the real life fear can be so numerous that you are surprised sometimes why that is so. Some people have a fear of riding elevators, or of heights or of spiders or being left alone at any time. There is also fear of exams (even if you are fully prepared) and of driving of flying in an airplane, fear of getting caught lying and fear of failure (which keeps so many people stuck to their jobs).

Now a day the most basic fear is losing ones job and having no health insurance but even this fear does not stimulate many people to make a plan B. Now the fear is mostly financial and economics like being fearful of the future, how are you going to provide for yourself, how do you save enough for retirement. Sometimes a fear can paralyze you so much that you are unable to do something to remedy it. All these kinds of fears can have a detrimental affect on ones mental and physical health it can ruin your life and your loved ones if not addressed properly.

A Year in Review-2010

As usual, the year 2010 came and gone but not without leaving its imprints on millions of people. It was the year of disasters as the most devastating Haiti Earthquake killed thousands of people and they are still recovering from it, one year on. Then there were the historic and record breaking floods in Pakistan which saw the one fifth of the country under water, crops destroyed and millions of people still displaced. The Chilean coal miners also was a very riveting story as Chilean miners stayed underground for more than two months waiting to be rescued.

In England, the announcement of the wedding of the future king of England was the hot topic. In the United States, the BP oil spill in the Gulf of Mexico kept everybody on edge and the environmental effects that are still reverberating till today. The midterm election which made the Republican Party the majority in the House and gained seats in the Senate was a defining moment. On the economic side, the unemployment rate stayed above nine percent and the congress passed another stimulus package. Ireland and Greece were forced to borrow money from the European Union to pay off their debts and the Euro currency came under attack from investors.

On a personal note, I lost my job in February and found a job in November, so 2010 was a mixed bag for me. I have not made any resolutions for the New Year as I take it as the time goes, but hopefully it would be a good year for everybody. Happy New Year.

On the lighter Side- Movies – Sherlock Holmes (2008)

Robert Downey Jr. stars as Sherlock Holmes and Jude Law stars as his assistant/friend Dr. Watson, joining forces together to solve the mystery of the vanishing corpse of Professor Moriarty and how he uses science (disguised as magic) to try to destroy the British parliament. A very good, funny and highly entertaining movie, with Sherlock Holmes using martial arts for a change. Robert Downey Jr. is excellent as the master Sleuth and Jude law is also excellent as his frustrated friend. Highly recommended.

On the lighter Side- Movies – Knowing

Nicholas Cage stars as a Single Father Astrophysicists at MIT whose son stumble upon a numerology letter detailing the disasters of the last fifty years. At first nobody believes Cage but after a disaster struck, he races against time to put together the pieces of the puzzle and realize that the end of the world is near with a solar flare. He tries to be with his estranged parents and sister. The story was serious and good until in true Hollywood fashion, it has to show the alien side. This is in regard to how his son and another girl get noises in their ears giving them the impending doom and how the aliens want to take them away from their parents. Recommended till the Alien side of the story pops up

On the lighter Side- Movies – Daybreakers

Ethane Hawke and Willem Dafoe stars in this horror movie in which the vampires outnumber the humans who are captured to nurture them for the blood. Ethane Hawke is a scientist assigned to make a blood substitute for the vampires since the numbers of humans are dwindling and Willem Dafoe is a former vampire who has the cure for the vampires to survive in the sunlight. I enjoyed the movie (although it becomes sometimes bloody) but with the star powers, it is a nice variation on the vampire theme. Recommended

On the lighter Side- Movies – Zombieland

Woody Harellson stars in this Horror-Comedy who travels with a weird weak guy and two con sisters in the wasteland of America which has been run over by zombies (thus Zombieland). Although some jokes are effective and the movie is tongue in cheek and fun to watch but you had be better watching some other serious movie. The zombies die just by getting their heads blown apart (which is a nice variation of the endless zombie movies where you have to literally chop the zombies in order for them to get killed). Recommended (if you have nothing else to do)

Monday, January 3, 2011

On the lighter Side- Movies – The Crazies-2010

Although it should not be on the lighter side, this Horror movie is an effective remake of the 1973 movie by the same name regarding a small fictional town in Iowa, where some kind of deadly biological virus spreading turning the inhabitants in zombie like killers. The sheriff along with his wife and two other people try to survive amid all this chaos and manage to make it to the next town only to be mentioned on the screen that it has been targeted to be exterminated by the military since it has also be infected. A violent movie to be sure (as are all the horror movies) but if you have the time, check it out. Recommended but for the adults.

On the lighter Side- Movies – Ninja Assassin

A Korean new comer Kung Sang stars in this bloody and action packed movie regarding a ninja who betrays his clan and fights to seek revenge against them and his former master. To be forewarned it is an extremely bloody movie but the only complain I have is that the fights scenes among the ninjas are in the dark which makes it hard to see who is fighting who. But for the action fans it is a great treat as blood and bodies fell very fast. Good acting by Kung Sang. Recommended

On the lighter Side- Movies – Quantum of Solace

Daniel Craig stars in this latest Bond movie which takes him to Haiti, Bolivia and other exotic locations to find the person who is trying to steal water and make a country dependent on him. Lots of usual action (including a boat and a plane chase) as it seems that Bond has run out of topics to pursue since the end of the Cold war. But still it was the highest grossing Bond movie of all time and so we should expect more of him in later pictures. Surprising low key special effects (if any). For Bond fans a must see, others proceed at your own time.

A very special Post-2011-2nd Anniversary of My Father’s Death

Today marks the Second Death Anniversary of my beloved father. It just seems that it was yesterday that I could hear his voice, his wisdom advices and his laughter (and anger, frustration etc). I sometimes also see him in my dreams while he was young and healthy. He may be gone physically but in my heart and mind I can still feel his presence and his face. I am still in shock that he left us and sometimes I cry by remembering him. Although I know that everybody has to go but it really becomes harder if it is your own parents. You never expect that they will leave you because you always want them to be around.

That is why I always say to whomever I meet that they should try to stay connected with their parents all the time. There may be some arguments between you and your parents but ultimately you patch up and in my case, we use to do it in a day or so or maybe at the same time. You can’t spend enough time with your parents since time flies when you are with them. It is such a comfort to be among them and now that I have lost my father, it is not the same anymore. I have left his house the same way as he left it and when I go there, a strange feeling of emptiness fills me up which I am unable to explain in words.
So I say to my dear father, May you rest in Peace and I will love you always and miss you dearly, your Son.