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Even Summer Jobs Face Tax Obligations
Q. My son has a job for the summer — a real job with a real paycheck. So will he owe taxes on this money, and will he have to file a tax return?
A. Welcome to real life — where money earned is shared with the government. It may be a rude …Read more.
Financial Planning for Those Who Can't
Many families focus on Mother's Day and Father's Day during this season of the year. But for many moms and dads, it is a bittersweet recognition. They are parents of children with disabilities — children who will never be fully capable of …Read more.
Disability Insurance More Crucial Than You May Think
Disability insurance is one of the most overlooked products in the insurance industry. No one wants to think about how different life would be if you were suddenly disabled and couldn't work, as a result of an accident or illness.
But how about this …Read more.
Financial Incentives Change Behavior -- for Better or Worse
Q. I just read that Bank of America is going to give 200,000 homeowners a reduction of up to $100,000 in their mortgages — IF they are at least 60 days behind on their mortgage payments. Why are we rewarding people who are delinquent — …Read more.
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Importing Oil, Money Hurts U.S.Q: What is your greatest concern for America's financial future? A: On a national basis, the two worries that rise to the top of my list (among many others) are the twin dangers of our growing dependence on imported oil and on imported money to fund government spending. Even worse, we import both from countries that are not our friends. Here's a quick look at the basics of each situation. Almost every year, the U.S. government spends far more than it takes in through tax revenues. In the fiscal year just ended, our government spent about $1.8 trillion more than it collected — a record budget deficit. The sum total of all our deficits, going back through the years, is our national debt. It is approaching $8 trillion dollars. That's money we borrow by selling IOUs — Treasury bills, notes and bonds. The real problem with all that debt is that 47 percent of it is owed to foreigners! Nearly half our debt is owned by foreign central banks, including China — one of our largest creditors. They have lots of dollars — money we've sent to them as we purchased their consumer goods. So far, the Chinese and others have been willing to lend us money, buying our Treasury bills, notes and bonds, at the current very low interest rates. But what happens when they see the U.S. is also creating more dollars — inflation — to help pay its bills? At some point, those lenders are going to suggest that they would like higher interest rates — or some other important concessions — in order to keep lending us money to finance our government spending. And that will be a critical moment — when our lenders start making demands! We give away our future freedoms when we grow indebted to those who do not necessarily have our best interests at heart. The second great dependency is on imported oil. The statistics are frightening. In the United States, we use 21 million barrels of oil a day. Of that amount, 13 million barrels are imported. In fact, the United States, with only 4 percent of the world's population, uses 25 percent of the global supply each day! This huge financial issue came into focus recently when I heard legendary oilman T.
Pickens has spent more than $62 million of his own money trying to educate Washington leaders in both parties to the dangers of U.S. dependence on imported oil from countries that are potential enemies. He has backed everything from wind power to solar to geothermal to natural gas (which we have in great abundance) as alternatives to importing oil. Pickens says the world sees it as both piggish and foolish — using too much oil, and not demanding enough from the countries we protect. While the Chinese buy up reserves around the world — and even have a deal with Iraq to develop their oil fields — the U.S. has nothing to show for the lives lost and the money spent in that country! Pickens is doing more than complaining. You can find his suggestions and join his attempt to inform Congress at www.pickensplan.com/theplan/. One central aspect of Pickens' solution is to offer immediate tax credits to move our nation's fleet of more than 6 million 18-wheel trucks from diesel to natural gas fuel. Because about 5 million of the 13 million barrels we import daily come from OPEC, a switch to natural gas as truck fuel could cut our dependence on OPEC in half! America is overflowing with new natural gas discoveries that have pushed its price down to record lows compared with oil. We would cut our dependence on foreign oil — and our vulnerability to sworn enemies and fickle friends. These two growing dependencies — on imported money and imported oil — top my greatest fears for the future of our free enterprise system. The truly sad thing is that we could solve these problems if only our representatives in Washington — in both political parties — would focus on these dangers. And that's The Savage Truth. Terry Savage is a registered investment adviser and is on the board of the Chicago Mercantile Exchange. She appears weekly on WMAQ-Channel 5's 4:30 p.m. newscast, and can be reached at www.terrysavage.com. She is the author of the new book, "The New Savage Number: How Much Money Do You Really Need to Retire?" To find out more about Terry Savage and read her past columns, visit the Creators Syndicate Web page at www.creators.com. COPYRIGHT 2009 TERRY SAVAGE PRODUCTIONS DISTRIBUTED BY CREATORS.COM
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