Hell Yeah!

Save the Farm!

The recent spate of mortgage foreclosures that have led to the "subprime crisis" is not good news for anybody. Sleazy mortgage lenders, promising something for nothing counted on the fact that as a nation, we are unconcerned with tomorrow, and crave instant gratification of our consumer "needs", and will agree to just about anything to get what we want RIGHT NOW! The future cost be damned.

Granted this was a collaborative effort, as "subprime" lenders worked hard to obscure the real cost of their product, and people chose to remain naive. Still, the bill inevitably comes due, and payback can be a bitch.

This crisis is a microcosm of a greater crisis we will have to deal with eventually:  when our debt to China comes due; when it comes time to pay for the wars we wage; when payment comes due for stupidly treating our planet like a sewer.

We are living on borrowed time (and money), as individuals, a nation and a species.

There's one component of this crisis that makes me believe the consequences of Fed-driven cheap and easy credit were a collaborative evil-plan by big business and government: the bankruptcy bill.

With no chance of absolution of debt, the poor, naive people who over-bought houses that were then foreclosed on (and sold for less than their bank note), will not have the option of bankruptcy relief. They will pay back every penny they borrowed, with interest. Many will be stuck making mortgage payments on properties they no longer own - for the rest of their lives. A new, congressionally mandated indentured servitude.

Fortunately, there may be hope for the thousands of Americans who find themselves unable to meet their obligations. So if you, or someone you know is in such a situation, send them the link to this excellent article by Terry Savage, contributing editor of Jim Cramer's thestreet.com.

Keeping Your Piece of the American Dream

It basically comes down to this: the banks would rather avoid foreclosure, because everyone loses, so they may be willing to work with you to find a solution. Savage offers a few things to try that are worth a shot.

And do yourself a favor and avoid variable rates whenever possible! Like gas prices, they have a tendency to going up a lot faster than they go down. Good Luck and Happy Easter!

Tax Death

Taxes.

Someone sent me a link to a tax resister website that peddled a DVD instructional on how to "never pay income taxes again!". The pitch started with a bit of history; a cabal of government crooks and megarich bankers (of that criminally-inclined class that, according to my favorite other-side writer ren, conceived and wrote our Constitution) gathered to concoct a scheme to soak the broad shoulders of America and make themselves vastly more wealthy by levying what they assert to be an unconstitutional tax on income.

There is definitely something to this. The courts bend over backwards to support the income tax, and they punish with incongruous severity the people who act in opposition to it.

An income tax is wrong, is targeted to the wrong people (those with less inevitably pay more), but I like most of my countrymen, have been conditioned to accept is as a necessary evil. We need government after all, and somebody has to pay for it.

Taxes are a big issue, and if current economic conditions are any indication, they will be a much bigger issue in time for the next election - particularly the AMT.

But does there need to be an income tax at all?

Of all the ideas I've seen, the one with the least traction is the one that makes the most sense to me (funny how that keeps happening!): Eliminate the income tax entirely for individuals and businesses, but levy a flat sales tax on all goods but necessities (milk, eggs, butter, meat, clothing under $110/item, home energy, etc.)

But luxury goods: brand-burdened sneakers, cars, jewelry, plasma TVs, Playstations, and so on.

One major benefit to this would be that billions in undergroud revenue would be brought into the legit stream. Consider a drug dealer who rakes in a million dollars a year selling meth. None of that is taxed now - nor would it be under a flat tax or any other scheme, But when he used his ill-gotten booty to buy a gold-plated rolls royce for a million dollars, his income would effectively be taxed, and what has otherwise been a total loss of billions of dollars to an underground economy, is brought into the legitimate stream.

Poor and thrifty people could entirely escape taxation. Wealthy people would pay more. As it should be.

This would be a bonanza for the credit card and service companies, yet could act as a sort of protectionism as foreign-made goods generate unimaginable revenue.

There will still be plenty for the IRS to do - underground trade will emerge to get around these taxes too - but at least there will be a constitutional mandate for government fundraising, and all the questions of the ethical and moral correctness of an income tax will be put to rest.