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Today the Obama administration started the previously announced mortgage rescue plan.  I wrote a.  Simply put, I think it is a pretty ridiculous plan.  The portion for responsible homeowners to refinance was already in place.  I can prove this because in January before the plan was even announced and there was no appraisal at all on the refinance which means that they did not care about the loan to value ratio.  The new stuff is all in the incentives for modifying loans for people who cannot pay their obligations. So basically if you have good credit and you have been paying on time you are just stuck with higher tax bills to fund the program for people who has not been filling their obligations.  Great deal.

Anyway, I was going to write a pretty long rant about the new gargantuan Obama budget, but this article at American Spectator called said a lot of the things I wanted to say.  Here are some of the main points in the article that  I was going to write about:

  • Obama is raising the budget from $3 trillion in 2008 to $4 trillion in 2009.¬† This is a 25% increase.
  • Obama is growing the national debt by $2.7 trillion this year.¬† This is a growth of 27% in one year over the collective debt of the United States for the past 200+ years.
  • The deficit for this year is the largest ever at $1.75 trillion, which is more than 12% of GDP.
  • Obama pulls out a nebulous $2 trillion budget cut over 10 years for winding down the wars, but this is barely half of his first year’s budget.
  • Obama is keeping his promise of raising taxes for high earners, and also trying to limit the deductions they can take.¬† The money will be used to give refunds beyond what some tax payers pay.¬† Basically, a good amount of people could be paying no taxes and receiving extra tax refunds.
  • Increased taxes on energy companies will creep into consumer energy costs.

The funny thing is that Obama said that he is going to cut the deficit in half in four years.¬† I wonder if he means he will cut the deficit he creates.¬† The bottom line is, a bigger budget is absolutely not a better budget.¬† It is incredibly difficult to create a budget for an entire national government, but the sheer size of the government allows the president to find more areas to cut. ¬† The problem is that I do not think a small and efficient government aligns with the Obama administration’s agenda.

Finally, all of this money is not free.¬† It will come from the backs of Americans in one form or another.¬† Even the poorest who will get tax rebates will be affected in some way either through higher prices or less employment due to higher business taxes.¬† The deficit also indicates that the government cannot collect enough tax revenue, so don’t expect the tax hikes to stop at those who earn over $250,000 a year.

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Apparently, as part of the new budget that increased taxes on everyone there is a tax credit for people who purchase brand new homes.  This means that the home cannot be occupied previously by anyone.  This seems like it would be a boost to home builders.

Here are the specifics:

1) The home has to be brand new, but the tax credit applies to all buyers who intend to live in the home.  You do not have to be a new  homebuyer to qualify.

2) There is no income limit to qualify for this tax credit.

3) You have to close escrow on the home between March 1, 2009 and Feb 28, 2010.

4) There is a total of $100 million assigned to this credit, so that means only 10000 homes will qualify.  It is first come first serve by closing date.

5) You have to live in the home for at least 2 years and you will receive the $10000 in 3 installments of around $3,333 each for the next three years.

6) This tax credit can be combined with the Federal Tax credit of $8000 for new home buyers.

This tax credit actually makes me quite angry because right now California is not even paying tax refunds to people who qualify.  Now they want to use all this extra money to help home builders sell homes?

Additionally, there is a very small supply of new homes here in the Bay Area so I do not see this helping many people here.  This is definitely beneficial to some friends we know in Southern California, where the markets have a glut of new homes that are not selling.

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Just when I thought that my husband and I have been paying too much taxes, we are having another tax hike in California.  This is a basic run down of the new taxes.

  • ¬†The vehicle licensing fee is doubling to 1.15%.
  • Sales tax is going up 1%, which means in San Mateo County I will be paying 9.25% on services and non-food goods.¬† So guess what, my hubby and I will probably shop more on Amazon for the non-essentials.
  • Income tax is going up by 0.25% so the top bracket is now 10.55% for those making over $1 million per year and 9.55% for everyone else. ¬†¬† For the hubby and I the extra amount we will pay is just under¬† the .¬† So our net stimulus would be around 50 cents a week.¬† Haha!
  • The dependent tax credit is reduced by $210, so families with tons of kids will see a hit in their tax bill.

It is unfortunate, but this state has way too much debt and something had to be done.  Raising taxes is a almost inevitable.  Supposedly these tax hikes are temporary for two to four years, but the economic crisis might make them permanent.

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I was at work all day today and I only caught a little bit of the inaugural parade on the internet when my coworker showed it to us during a release meeting. I did read Obama’s speech online and here are some of my thoughts.

First of all, was very well written and that is no surprise because it was probably slowly crafted by a team of highly skilled writers including Obama. I actually liked it because it was more realistic than what I would have expected. He acknowledged that this country is in a crisis and that “the challenges we face are real, they are serious and they are many”. He also saluted immigrants and soldiers as people “who have carried us up the long, rugged path towards prosperity and freedom”. He also seemed optimistic that America will bring in a “new era of peace” and that American people will need to enter a “new era of responsibility”.

Obama also did not promise too much policy in his speech, and I think that is wise. However, this the excerpt where he talked about the role of the government, and I think it was somewhat sad:

The question we ask today is not whether our government is too big or too small, but whether it works, whether it helps families find jobs at a decent wage, care they can afford, a retirement that is dignified.

Where the answer is yes, we intend to move forward. Where the answer is no, programs will end.

And those of us who manage the public’s knowledge will be held to account, to spend wisely, reform bad habits, and do our business in the light of day, because only then can we restore the vital trust between a people and their government.

Basically it says that the government will determine whether its programs are useful and move forward or end them.¬† This brings up the question of ¬† How will those in power be held accountable?¬† I think many Americans today feel powerless to do anything about the situation they are in, and I am not sure if the government is the answer.¬† Generally, people have less freedoms as governments grow larger, and I don’t see that changing under Obama.¬† Case and point are the newly released $350 billion TARP funds and the proposed $825 billion stimulus.¬† This rampant government spending is obviously not being controlled and more government spending generally increases the size and influence of the government.

Finally, I saw on many blogs and news outlets that say that the inauguration costs somewhere around $160 million to $170 million, and I think that’s just a bit too much no matter who is getting named president.¬† $160 to $170 million could fund many companies here in the Valley, but instead its being spent on a big party in Washington D.C. ¬†¬† How is that for spending wisely?¬† I do hope that Obama will usher in a government that’s moral, wise, and frugal, but I don’t know how much one man can do to change this giant lumbering institution that is the United States government.¬† I also don’t know if Obama wants to actually make the government more efficient because he is pretty much the CEO of a giant non-profit organization. ¬† This organization has no need to be more efficient because it has a giant endowment in the tax revenues of the American people, and its CEO acquires more power as it expands.
Will  we see a new era?  Only time will tell.  Meanwhile, the parties  rage on in Washington D.C.

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I’m sure you have heard about President-Elect Barack’s Obama’s new push to pass a stimulus package.¬† I couldn’t find a a comprehensive article about the details of the plan, but what’s being reported the most in the media are the tax cuts which make up about 40% of the package.¬† Here they are, and here is why I think they are mostly nonsensical and probably would not do much to lift the economy.

viagra online without prescription reviewsviagra online without prescription reviews- I know that every bit of money helps, but is this really the best way to spend billions of dollars in stimulus money?¬† $500 per person works out to be about $40 per month.¬† I guess it’s good for a cable bill, but will $40 per month stop a family from going into foreclosure?¬† Will $40 per month be enough to stop local shops from closing?¬† Another thing is, didn’t we just have a round of stimulus like this from the Bush administration?¬† That one was actually $600 per worker or $1200 per couple plus $300 per kid.¬† Just look at how much that helped and you’ll see how much this one will help.

viagra online without prescription reviews – This one has so many holes that it’s like a piece of moldy Swiss cheese.¬† First of all, if a person lost a job at business A and then finds a job at business B, is business B really viagra online without prescription reviews a job? It seems like that would be a net gain of 0 jobs to me.¬† Additionally, some businesses are doing well and some are doing poorly.¬† The ones that are doing poorly are very unlikely to hire someone just for the tax benefit because adding an employee is very expensive and it would only make sense to add an employee if the employee’s output of work can bring a profit.¬† On the other hand, the businesses that are doing well may already be planning to hire people and they will get stronger due to the tax rebate, but they probably did not need that money to begin with and again this tax rebate would have been pointless. ¬†¬† Another thing is that it’s unclear how long a company needs to keep an employee to claim this tax benefit and what type of employment it would be.¬† If those details are not clear I can see shady businesses exploiting this by hiring some person part time for half a month and then claiming the credit for a profit.¬† Anyway, I don’t think this tax stimulus will actually be an incentive for any logical business to add to their payrolls and I highly doubt that this will bring about a net gain in employment numbers.

viagra online without prescription reviews- This particular item isn’t mentioned a lot on the big news sites probably because it’s just bizarre.¬† I see this particular clause benefiting the giant financial firms the most because they have had the most significant losses in the last year, and they also had the biggest profits in the years prior.¬†¬† A lot of companies in other industries did not suffer as badly, and the good responsible companies that were still making a profit in 2008 will not get a boost.¬† Again, there is no guarantee that the companies that receive this benefit will create jobs and expand the economy.¬† In fact, I think in this economy only the strong companies that still have a profit are still hiring because they know that they can get discounted labor and they are in a good position to use the extra labor effectively.¬† It is almost like Obama wants to punish the companies that had good management to make a profit despite difficulties by giving their tax dollars to those who may have been extremely irresponsible and I think it’s plain stupid.

Finally, there is a question that everyone should be asking “WHERE THE¬† (insert your favorite expletive here)¬† WILL ALL THIS MONEY COME FROM?” Oh that’s right, they will just add it to the national debt, and that will be paid by Americans for generations to come.¬† I know that Obama’s plan isn’t finalized, but so far I haven’t heard a single good idea from him, yet.

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