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Our
May 2, 2007 Newsletter
Edition
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DOMINICAN
REPUBLIC REAL ESTATE:
.
In
some recent issues of our newsletter we made mention of the higher end
residential properties being constructed, and the arrival of Donald
Trump as well. But, for those of you who became a bit depressed
thinking a home in the Caribbean might now be unaffordable for you,
here is a recap of some new properties available with more, shall we
say, down to earth prices:
.
In
Santo Domingo: New Apartment Project, 3 bedroom, 3 and one-half bath, 4
elevators in building with 3 backup generator system - from US$132,000
.
In
Juan Dolio: New Apartment Project in the Beach-Resort community of Juan
Dolio, 2 and 3 bedroom apartments, 2 bath, patio, off street parking,
modular kitchen - from US$123,500
.
In
Santo Domingo: Luxury two story Penthouse 2,600 square foot Apartment,
3 bedrooms, 3 plus bath, terrace with Jacuzzi, marble floors -
US$240,000
.
In
Santo Domingo: Brand new 2,000 square foot apartments (one apartment
per floor), 3 bedrooms, 2 and one-half bath, 2 parking spaces -
US$144,000
.
In
Santo Domingo: 5 Bedroom, 3.5 bath 3,800 square foot home, garage
parking for 4 cars, in upper middle class neighborhood - US$200,000
.
Santo
Domingo Area: Residential Home Sites, 35 minutes North of the City in a
gated project with pool, tennis, club-house - building sites from one
quarter acre (1,000 square meters) on up for US$12 per square meter (or
US$12,000 for a one quarter acre lot, US$48,000 for a one acre home
lot).
.
.
EDITORIAL:
BACK TO THE FUTURE
.
A
while ago I wrote an article titled the Sovereign Individual Versus the
Welfare State. The premise or idea behind the article was to
discuss what I see as a coming conflict between people I would call
sovereign persons, or people who generally believe in self reliance,
people who wish to earn an honest living, people who believe in taking
care of themselves financially, people who believe in freedom of choice
and civil liberty, and with that, simply want the government off their
back and out of their pocket. In other words, people who some
might call Libertarians, to one degree or another, who simply want to
live peacefully and be left alone. It is true of course that
everyone, everywhere, complains about things like taxes and incompetent
or inefficient government (such complaining has been going on since the
days of the Roman Empire). And this is not to say that if you
believe in some of these ideals I just mentioned, that you are
antisocial or are somehow uncaring about the plight of others, or that
you truly believe government can provide basic services out of thin
air. It is unreasonable to think that government can function
without having revenue coming in from some place, be it revenue in one
form or another (sales tax, duties on imported goods, etc.) - But how
much is too much? And in addition, are you really getting your
monies worth in terms of municipal services? Heck, the taxes are
going up and they are laying off civil service workers left and right -
school teachers, police and the list goes on.
.
The
problem today of course would seem to be that the Democratic,
Free-Market Social Welfare state would seem to be buckling under, or at
least showing severe signs of strain. This is not some off the
cuff remark, as various local and national governments in the wealthy
modern nations are finding themselves running out of money, and unable
to meet all the financial welfare or pension obligations promised
(never mind that many as well cannot meet current employee payrolls
either). And of course politicians show no signs of slowing down
the spending in other areas, in order to put the books in
order.
.
On
the other hand, we know those states or governments that were operating
under full blown planned or totalitarian socialist economies have gone
by the wayside as being untenable, unaffordable and simply a failed
experiment (and in the least under such systems, there surely is no
upward mobility for individual citizens). Those very same
countries that have switched over to free market or capitalistic
systems are now booming (Russia, China, Vietnam and to an extent India
after it abandoned it socialist orientated economic stance from the
past). So, if full blown or all out state planning (socialism)
does not work, and if the other experiment of capitalism with a more
limited goliath welfare state is having problems these days - where do
we go from here or what are the next new ideas going to be that will
set things right? This is not a question to take lightly because
it would seem to be a legitimate problem as we go forward, and
something to think about in terms of what political and economic
ramifications may be coming.
.
To
back track just a bit and understand some basic ideas, the history of
the modern day social welfare state in the so-called modern
industrialized nations of course has its roots in the Great Depression
of the 1930s. These programs came about, and many would say the
Great Depression came about, as a response to the so-called neo-liberal
laissez faire free market globalization that existed right up through
the 1920s (or really from about 1880s up through the 1920s). And
I would bet you thought globalization was something new, thought up by
a bunch of neo-con crackpots within the last twenty years - no?
In any event, such government programs and social safety nets were put
in place to in theory, alleviate the economic suffering of many plus
smooth out the extremes of the free market. And it seemed to work
for a while. But did it work because the free market in the past
generated (in those nations with a capitalistic economic system) enough
excess wealth to fund such things, and if so why is this no longer the
case today? In other words, the question is - does socialism only
work when it has something else underneath holding it up? What
then, if that something holding it up - is now gone? This is an
important point to consider as we once again move through a period of
what I think will be a severe transition, severe adjustment and
certainly unprecedented changes among nations as the effects of
globalization, outsourcing and new divergences in regards who has what
plays out - in fact, you are already living witness to it. The
manufacturing jobs are gone, now the service industry jobs are gone, so
what is left? Was it not the case that were told that the economy
is transforming from an industrialized one to a more service oriented
economy, and thus individuals should make education decisions or learn
new skills accordingly? Now it would seem that even the service
jobs are leaving (Dick Cheney insinuated we should all sell stuff on
E-Bay, but someone that does not seem like the answer). Will the
only jobs remaining be employment with the government? And if so
- Is that financially sustainable and how many people really can
government employ?
.
The problem in and of
it-self is not necessarily that socialism is bad, the free market and
globalization good, or any such philosophical argument. I think
we are beyond that now, and finger pointing or other such arguments a
bit too late. It already has been proven that full-blown
socialism as an economic model, while noble and well intentioned, is
not a sustainable system, financially speaking. Certainly as we
have already noted, those centrally planned socialist economies have
been taking off once they switched over to free market
capitalism. The real problem rather, as you can probably guess
from what I have been saying, is that the losers of so-called
neo-liberal economic policies (globalization, zero import duties from
free trade agreements, and outsourcing to cheaper labor markets) has
been those nations with democratic socialism as a political model,
coupled with the underlying economics of capitalism to support the
welfare state concept (Western Europe, The United States and
Canada). Not because this system has not worked in the past, but
rather because the jobs, economic growth and government revenues that
made such a system financially possible - is no more.
.
Of
course, I should step back a moment because it is not true that
everyone is losing with this new paradigm. The truth is that major
companies, and some individuals as well, who have the capacity to move
themselves or operate globally, or anywhere in the world that best
suits them, are certainly profiting, or in the least holding
ground. The real losers then are the poor and the middle class
who most certainly will be effected by reduced government social
welfare benefits AND higher taxation. But regardless, will that
even save the day? What if there are no jobs and ergo no personal
income left to tax? What if municipalities raise real estate
taxes to such a point that home owners start to feel that it is simply
too, too much to cope with in their personal budgets, and can literally
no longer afford to stay in their current homes not because of mortgage
payments - but because of property taxes? What if the incoming
government revenue falls so severely and the outbound government
payments (social welfare benefits, government pension plans, healthcare
insurance, etc.) increases so much - that a severe imbalance is
created? Indeed there has been an imbalance for a while, as
politicians in the US especially have been spending the money faster
than it has been coming in - and so far making up the difference or
shortfall by borrowing it (from foreigners for a sizeable
portion). Now the days of easy money seem to be gone, especially
as many foreigner governments have decided they would prefer NOT to
accumulate any more US Dollars or US Dollar based investments (such as
government treasury bonds).
.
So
then, the question remains - what will be the next new great bright
idea from the politicians? My guess is business as usual, such as
socializing the cost and the problem onto those citizens that had
nothing to with these things. Which is to say, putting the burden
onto those people that did NOT foolishly buy homes they really could
not afford with no money down, interest only mortgages. Putting
the burden onto those individual citizens that gave up buying a new car
(and waited, making do) so they could save some extra money or put it
away into a retirement account for themselves. In other words,
those people that were (are) financially responsible and solvent will
be forced to face the financial burden simply because they are the only
group of people remaining with some money to tax or grab. Stated
another way, if you are financially responsible, you will be (and
already are) punished. If you have been foolish, you will be
bailed out (but just as with the various drugs being advertised, the
side effects may just be worse than the cure). And to
add insult to injury, this is not your Grandpas economy any more.
There is no case today (as was the scenario during the 1930s) of the
government inventing new deal government stimulus programs because we
have been there and done that. There is no case of waiting for
the economy to turn around so large manufacturing companies start
hiring again, because the companies and the jobs are all gone.
They are in India, China and Romania along with the jobs - and the
company executives are in Dubai. But this is not a complaint, but
rather to get you motivated to think about what you may need to do to
survive this so-called new economy.
.
In
short, this is the clash or crisis I see coming. Ironically, it
is that very state or government that has pushed through free trade
policies, that has been borrowing money from foreign governments, that
has been almost silent as both the jobs and technology as well have
gone elsewhere - and has been spending Billions of taxpayers funds on
nonsense projects not to mention all the corporate welfare (the US
Federal Government allocated US$500,000 to study the sidewalks in front
of the Kennedy Center in Washington, D.C. - if you do not believe it,
check it out). But, what evidence do we have that the politicians
are perhaps well aware of this coming conflict? In other words,
what are the connections between the tightening on personal freedoms
and on personal liberty (which includes where and how you invest your
money) as a mechanism to starve off the exodus and coming clash?
To be honest, there are too many items to discuss for our limited space
here, but I call your attention to the new Internet project currently
being worked on with taxpayer funds no less (wouldn't it be nice to
block access to offensive information - such as websites from offshore
or foreign banks?). I have also called your attention previously
to this new bill designed to empower the US Treasury to crack down on
money movements to naughty countries that do not share tax information
(really, really bad places like Costa Rica, Switzerland, Liechtenstein,
and other nations supporting weapons of mass construction, such as
tax-free banking for instance as one of those weapons people use to try
and safeguard their money). And of course you should know that
the politicians have quietly rescinded the sunset provisions of the
Patriot Act - effectively wiping out the Fourth Amendment for good and
making the Patriot Act the permanent law of the land (The Fourth
Amendment's protections against seizures, for instance, have been read
to apply to electronic surveillance, searching through your garbage,
reading your emails, and too much else to mention). A handy tool
if and when a large number of people want to fly the coop or just
otherwise simply disagree - but then again perhaps I am reading too
much into these things. Perhaps these are conclusions made by an
overactive imagination.
.
In
any event, I know what some are thinking or saying. All of this
sounds like a whining complaint from some selfish citizen that does not
want to contribute to society, in short, someone that wants to make an
argument for not paying taxes. This of course is always the
philosophical argument from the other side of the isle. Au
Contraire. Taxes are necessary in some degree and in some form to
cover basic government services. The key operative word here is
basic. Since when or where has it been stated that private
citizens have signed on to bailing out foolish banks or lending
companies who handed out loans that they probably should not
have? Why is it that a banks risk or a borrowers risk (or we can
say unwise practice) - has to become your problem via government
bailout with YOUR tax money? Where exactly is the form you signed
agreeing to fund a study on the best use of a sidewalk - all the while
when textbooks are needed in public schools, yet there is no money left
over for that. Yet the sad thing is, too many people have lived
in a society whereby they expect (and think it is a good idea) for the
government to step in and save them (using someone else's money of
course). As usual, I will predict this will be the magic solution
proposed once again. And also as usual, it all depends on what
side of the fence you are on in terms if you are being rescued, or if
you are one being pick pocketed by force. What was that
saying? The first step in avoiding a trap - is by knowing of its
existence in the first place? Sounds about right to me.
.
Just for
reference, here are some of my favorite quotes by Mr. Thomas
Jefferson:
.
I predict future happiness for Americans if
they can prevent the government from wasting the labors of the people
under the pretense of taking care of them.
.
It
is incumbent on every generation to pay its own debts as it goes. A
principle which if acted on would save one-half the wars of the world.
.
A
democracy is nothing more than mob rule, where fifty-one percent of the
people may take away the rights of the other forty-nine.
.
Experience
hath shown, that even under the best forms of government those
entrusted with power have, in time, and by slow operations, perverted
it into tyranny. My reading of history convinces me that most bad
government results from too much government.
.
Our
country is now taking so steady a course as to show by what road it
will pass to destruction, to wit: by consolidation of power first, and
then corruption, its necessary consequence.
.
The
most successful war seldom pays for its losses.
.
When
the people fear their government, there is tyranny; when the government
fears the people, there is liberty.
.
.
IN
THE NEWS:
.
.
PENTAGON
CONTRACTORS OWE $7.7 BILLION IN UNPAID TAXES
By
Thomas D. Williams - April 30, 2007
.
A
federal watchdog agency insists that its investigations clearly show
the US government is facing serious long-term funding shortfalls, while
federal contractors, doctors and medical suppliers, regularly receiving
federal Medicare money, owe billions in unpaid taxes. Earlier
this month, Comptroller General David M. Walker of the US General
Accountability Office opened one of his critical summary presentations
to a Defense Department acquisition conference with: The federal
government is on a burning platform, and the status quo way of doing
business is unacceptable. He cited past fiscal trends and
significant long-range challenges; selected trends ... having no
boundaries; outlandish government funding demands due to the wars in
Iraq and Afghanistan, as well as natural disasters like Hurricane
Katrina; outdated federal policies and practices; and finally, rising
public expectations for results. Within the past six years, said
Walker, the government's long-term financial exposures in debt, health
and Social Security have jumped 147 percent to $50.5 trillion. If this
trend continues, said the GAO report, federal spending will need to be
cut by 60 percent and taxes will have to double to balance the budget
in the year 2040. To close off this sweeping gap, the economy would
demand double-digit growth for every single year for 75 years, he said.
.
http://www.truthout.org/docs_2006/043007J.shtml
.
EDITORS NOTES:
My point in highlighting this item for you is not complain about tardy
tax paying defense contractors (although I can imagine it to be a
problem). The real issue here is the claim that - federal
spending will need to be cut by 60 percent and taxes will have to
double to balance the budget. This is something we have been
arguing for some time in the sense that, one can certainly surmise that
social welfare, education, and similar domestic funding WILL be cut,
while funding for the military and interest on the national debt
continues to eat up a greater part of the budget. And to make
matters worse, the claim is that TAXES will need to be doubled
regardless, and despite what some liberals may claim (as being
necessary to fund the growing social welfare costs) it would seem to be
the case that such additional revenue will NOT be going into such
expenditures (healthcare, schools, and so on). And who exactly is
saying this? The answer is the man that is in charge of the
government bean counters, also known as the General Accounting
Office. In other words, the governments own accounting office is
telling you - they are going broke. In the words of a very famous
newscaster: Good Night and Good
Luck.
.
.
OUTSOURCING,
PART 1: IS RESISTANCE FUTILE?
By
Andrew K. Burger, CRM Buyer - 04/26/07
.
Some
90 percent of brand owners outsource at least some of their
manufacturing, according to AMR Research Latest News about AMR
Research. In addition, more than half of them expect to increase their
use of contract outsourcing Latest News about Outsourcing over the next
two years. As economic globalization continues, a wider range of
companies are outsourcing, near-shoring or off-shoring. HIGHER
THAN AVERAGE JOB LOSSES are forecast in 28 U.S. metropolitan areas
between 2004 and 2015 due to the loss of service sector jobs overseas,
according to a recent study as part of the Brookings Institution's
Metropolitan Policy Initiative. IT jobs will be among the hardest
hit, according to the report.
.
http://www.crmbuyer.com/story/
.
EDITORS NOTES:
Also from the same article: Duke engineering students' growing
concerns that their careers might already have been outsourced before
they graduate - and - Today, many of the world's largest companies are
global in nature; as such, they have no allegiance to any particular
country. Some other lines from the entire article say: The
shortage of skilled labor in developed nations, although disputed to
some extent by some, is another factor driving growth in
outsourcing. And yet another: Simply put, these changes
have enlarged the global labor pool, adding many newcomers who work for
much less money than workers in the developed world.
.
No
kidding? The students at Duke University might be paying a ton of
money (or their parents at any rate unless they are being saddled with
bone crushing student loans, guaranteed to keep them living in their
parents basement for twenty years), for an advanced engineering degree,
for a job that went to India, to a guy who got the same education and
degree, at a University in India costing 10 percent of the tuition at
Duke, to take a new job being outsourced by a major company for a
salary that is 50 percent less. OK - Here is the deal: If
you want a game plan, and if you want to help yourself (not to mention
mom and dad too) you should consider the following. You tell Duke
to take a hike. You fly over to Mumbai with Dad and get yourself
enrolled in the University there. Dad buys a new condo and puts
it in his name (that you will live in while you are going to
school). You graduate, Dad sells the condo and makes back all the
money he paid for your university education (because the real estate
market in India has nowhere to go but up), or he keeps it, for mom and
dad to use as a retirement property. You get a job in India (the
job you presumably might have gotten in California, that just happens
to now be in Mumbai). Maybe you meet a nice Indian girl, fall in
love and get married (more the reason Dad may want to hold onto to the
condo to see how all this pans out). Case closed, and everyone is
happy. Well, not everyone. Duke University is not happy,
but then again, where do they get off charging US$40,000 a year
anyway?
.
.
TOP SOFTWARE COMPANIES IN INDIA ARE
PLANNING TO ADD 100,000 JOBS THIS FISCAL YEAR - Outsourcing
drives up profits - By Rajesh Mahapatra -
Associated Press - April 26, 2007
.
Riding
a boom in outsourcing that's fattened profits, India's top five
software companies plan to add 100,000 jobs this fiscal year.
That's on top of a record 76,500 new employees who joined these
companies last year. The figures underscore how rapidly U.S. and
other Western companies are shifting work to low-cost India, where
outsourcing is no longer limited to call centers or back office work
such as billing and salary records. Despite concerns that rising
salaries, a possible slowdown in the U.S. economy and the rupee's
strength against the dollar would hurt business, the latest earnings
figures released over the past two weeks show that profits are
surging. We are seeing robust growth, Infosys Chief Executive
Nandan Nilekani told reporters when his company reported a 70 percent
year-on-year surge in profits during the January-March quarter.
Nilekani's confidence appears rooted in the strong economic rationale
of the outsourcing business: Western companies will keep shifting jobs
overseas so long as they can get the same work done for less money
elsewhere. Indian companies have set up centers in other low-cost
countries like Vietnam and Romania to stay competitive despite rising
salaries at home. As a result, they are hiring more people in these
countries.
.
http://www.chron.com/disp/story.mpl/business/4753961.html
.
.
FEDERALLY
FUNDED RESEARCHERS PLAN TO CLOSE DOWN THE INTERNET
April
18, 2007 - by Steve Watson - Global Research
.
Researchers
funded by the federal government want to shut down the Internet and
start over, citing the fact that at the moment there are loopholes in
the system whereby users cannot be tracked and traced all the
time. Time magazine has reported that several foundations and
universities including Rutgers, Stanford, Princeton, Carnegie Mellon
and the Massachusetts Institute of Technology are pursuing individual
projects, along with the Defense Department, in order to wipe out the
current internet and replace it with a new network which will satisfy
big business and government: One challenge in any reconstruction,
though, will be balancing the interests of various constituencies. The
first time around, researchers were able to toil away in their labs
quietly. Industry is playing a bigger role this time, and law
enforcement is bound to make its needs for wiretapping known.
There's no evidence they are meddling yet, but once any research looks
promising, a number of people (will) want to be in the drawing room,
said Jonathan Zittrain, a law professor affiliated with Oxford and
Harvard universities. They'll be wearing coats and ties and spilling
out of the venue. The projects echo moves we have previously
reported on to clamp down on Internet neutrality and even to designate
a new form of the Internet known as Internet 2. Of course,
Internet 2 would be greatly regulated, and only appropriate content
would be accepted by an FCC or government bureau. Google is just
one of the major companies preparing for internet 2 by setting up
hundreds of server farms through which eventually all our personal data
- emails, documents, photographs, music, movies - will pass and
reside. However, experts state that the clean slate projects
currently being undertaken go even further beyond projects like
Internet2 and National LambdaRail, both of which focus primarily on
next-generation needs for speed.
.
In
tandem with broad data retention legislation currently being introduced
worldwide, such clean slate projects may represent a considerable
threat to the freedom of the Internet as we know it. EU directives and
US proposals for data retention may mean that any normal website or
blog would have to fall into line with such new rules and suddenly
total web regulation would become a reality. In recent months, a
chorus of propaganda intended to demonize the Internet and further lead
it down a path of strict control has spewed forth from numerous
establishment organs: In a display of bi-partisanship, there have
recently been calls for all out mandatory ISP snooping on all US
citizens by both Democrats and Republicans alike. Republican
Senator John McCain recently tabled a proposal to introduce legislation
that would fine blogs up to $300,000 for offensive statements, photos
and videos posted by visitors on comment boards. It is well known that
McCain has a distaste for his blogosphere critics, causing a definite
conflict of interest where any proposal to restrict blogs on his part
is concerned. The White House's own recently de-classified
strategy for winning the war on terror targets Internet conspiracy
theories as a recruiting ground for terrorists and threatens to
diminish their influence. The Pentagon recently announced its
effort to infiltrate the Internet and propagandize for the war on
terror. In a speech last October, Homeland Security director
Michael Chertoff identified the web as a terror training camp, through
which disaffected people living in the United States are developing
radical ideologies and potentially violent skills. His solution
is intelligence fusion centers, staffed by Homeland Security personnel,
which will go into operation next year. The U.S. Government wants
to force bloggers and online grassroots activists to register and
regularly report their activities to Congress. Criminal charges
including a possible jail term of up to one year could be the
punishment for non-compliance.
.
Increasingly
we are seeing this in every aspect of our lives. Recording, tracking
and retaining our data in the name of keeping us all safe. Everyone is
now treated as guilty until proven innocent. Make no mistake, the
Internet, one of the greatest outposts of free speech ever created is
under constant attack by powerful people who cannot operate within a
society where information flows freely and unhindered. Both American
and European moves mimic stories we hear every week out of State
Controlled Communist China, where the internet is strictly regulated
and virtually exists as its own entity away from the rest of the web.
.
http://www.indybay.org/newsitems/2007/04/25/18404715.php
.
EDITORS NOTES:
If they put the same amount of effort into getting the governments
financial house in order, as they do trying to figure out how to mess
with individual citizens and take their civil liberties away - maybe,
just maybe we would be getting somewhere. Oh, and by the way, Tom
Paine had a price on his head by the British for publishing and
distributing his Common Sense pamphlet. If the Internet was
around in 1776, my guess is that Tom Paine would have been a Blogger.
.
.
THE NEW SUBURBAN POVERTY - By Eyal Press, The
Nation - April 23, 2007
.
Rockingham
County, North Carolina, has never been known for its opulence, but
until recently most residents would not have hesitated to describe it
as comfortably middle class. For several decades the county, a
rectangular block of land in the north central part of the state, owed
its prosperity to textile mills and tobacco plants, industries that
weren't always friendly to unions but that nevertheless furnished the
local workforce with jobs that paid enough to raise a family and buy a
nice house somewhere. Among those to do so was Johnny Price, a
44-year-old African-American who lives in a ranch house with green
shutters on a street called Sparrow in a leafy residential subdivision
on the outskirts of the town of Eden. Two towering oak trees dominate
Price's front lawn. In his driveway sits a navy blue station wagon. By
the standards of some newly built suburbs, the setup is modest, but for
Price, the youngest of ten children whose father died when he was 6 and
whose mother worked as a domestic servant, it's a testament to the
rewards of hard work and perseverance, values he's tried to instill in
his teenage son and daughter, who have lived with him since he and his
wife divorced. Lately this has gotten more challenging. A year ago
Price lost the job he'd held for nineteen years in company-wide layoffs
at Unified, a textile manufacturer. He's now struggling to make do on
$1,168 in monthly unemployment benefits and, like many people in
Rockingham County, which has been ravaged by plant closings in recent
years, wondering how long he'll be able to continue paying his
mortgage. Stories of downward mobility in America's suburbs have
not exactly cluttered the headlines over the past decade. Gated
communities of dream homes, mansions ringed by man-made lakes and
glass-cube office parks: These are the images typically evoked by the
posh, super-sized subdivisions built during the 1990s technology boom.
Low-wage jobs, houses under foreclosure, families unable to afford food
and medical care are not. But venture beyond the city limits of any
major metropolitan area today, and you will encounter these things, in
forms less concentrated - and therefore less visible - than in the more
blighted pockets of our cities perhaps, but with growing frequency all
the same. In the three counties surrounding Greensboro, North Carolina,
the city half an hour south of where Johnny Price lives, the poverty
rate has surged in recent years. It now stands at 14.4 percent, only
slightly below the level in New Orleans. Greensboro, it turns
out, is not alone. Last December the Brookings Institution published a
report showing that from Las Vegas to Boise to Houston, suburban
poverty has been growing over the past seven years, in some places
slowly, in others by as much as 33 percent. The enduring social
and fiscal challenges for cities that stem from high poverty are
increasingly shared by their suburbs, the report concludes. It's a
problem some may assume is confined to the ragged fringes of so-called
inner ring suburbs that directly border cities, places where the
housing stock is older and from which many wealthier residents long ago
departed. But this isn't the case. Overall ... first suburbs did
not bear the brunt of increasing suburban poverty in the early 2000s,
notes the Brookings report, which found that economic distress has
spread to second-tier suburbs and exurbs as well. The result is a
historic milestone that has gone strangely ignored: For the first time
ever, more poor Americans live in the suburbs than in all our cities
combined.
.
http://www.truthout.org/issues_06/041607LA.shtml
.
.
POVERTY
NUMBERS HIGHER THAN PREVIOUSLY THOUGHT
By
Patrice Hein, April - 2007
.
The
U.S. Census Bureau had calculated the official 2005 poverty rate to be
12.6 percent, or almost 37 million Americans. But the official
parameters used --enough pretax income, plus cash benefits from the
government, to pay for bare necessities -- did not paint an accurate
picture. So the bureau recently published 12 alternative measures of
poverty, all but one, showing higher poverty rates. According to
more realistic measures, such as those suggested by the National
Academy of Sciences, the number of Americans living below the poverty
level in 2005 was 41.3 million.
.
http://blogs.kansas.com/weblog/2007/04/poverty_numbers.html
.
NOTE: A McClatchy Newspapers
analysis of 2005 census figures found that the number of severely poor
Americans grew by 26 percent from 2000 to 2005, which was 56 percent
faster than the overall poverty population grew in the same
period. During this same period, according to Rep. Jim Cooper,
D-Tenn., the national debt is
doubling every five years and is now $375,000 for every working
American.
.
Source:
John David - April 27, 2007 http://wvgazette.com/section/Opinion/2007042632
.
.
NOT IN POVERTY BUT NOT INSURED -
High cost of private policies is pushing more in Indiana's middle class
to do without. By Tim Evans, April 22, 2007
.
For
years, Carl Brown had a health insurance plan that covered his every
medical need. The Bloomington man, working as a printer for
Indiana University, paid just $1 a month for a broad array of coverage
with low co-pays. That ended when he was laid off in 2001. Since
then, Brown, 52, has been able to find other printing jobs, but none
offering health-care coverage. Even as Indiana considers ways to
help insure its working poor, Brown's case illustrates a new,
surprising trend: The struggle to obtain affordable health insurance is
rapidly reaching into middle-class America. More than one-third
of the 46 million uninsured in the United States live in families with
incomes of more than $40,000. The nation's median household income was
$46,326 in 2005. These people are among the fastest growing subgroup of
uninsured today. Whether living in poverty or the middle class,
being uninsured carries many of the same consequences: increased health
problems, lower work productivity and billions of dollars in uncovered
care that must be written off by doctors and hospitals or passed on to
patients with insurance.
.
http://www.indystar.com/
.
EDITORS NOTES:
Ironically enough, one of the fastest growing new kinds of residential
housing options in the US had been the gated community concept, but
wait, I have a new twist on this to tell you about as it too is being
outsourced. Which is to explain that presumably buyers of such
properties are people looking to escape the poverty and crime of urban
areas. However, assuming the information from the above news
stories is true, it seems that poverty is growing faster in the
well-heeled middle class American suburbs than in urban areas.
Therefore, it would seem that if you are moving to the suburbs to
escape the crime and poverty of the city, you might be wasting your
time (and money).
.
Our
take on this is that it is an indicator of vast numbers of the middle
class that are now falling behind, and who are the persons swelling the
just-getting-by or working poor portions of the society. Why is
this an important trend to watch? Is this a liberal call for more
government intervention in terms of social welfare initiatives?
No, it is rather an interesting trend to watch in terms of social
fallout however, and that is the point. Meaning, if Americans
these days are so uptight and out of control emotionally that leads
them to so-called road rage or verbal assaults on fellow drivers, how
then will these very same people behave once the realize they have
fallen out of the middle class - and are now broke? What
will it take for someone to loose it, or snap mentally as they
say? Large numbers of people have been maintaining the appearance
of living an affluent or well-to-do middle class lifestyle by borrowing
money, from their homes via home equity loans if not from credit cards
as well. Now that is coming to a close. When the chits are
called in, who will be left intact financially and emotionally as
well? How many people are mentally, emotionally and financially
prepared to weather an economic storm? I suppose my thinking is
unconventional and I really do hate to be negative. However,
there are some interesting parallels today in terms of what took place
during the so-called Great Economic Depression of the 1930s. To
cite just a few, we are hearing politicians discuss legislation these
days to halt bank foreclosures on homes for periods ranging from 12 to
24 months. The national savings rate fell below zero (turned
negative) in very recent years as well. The last time both of
these things occurred was about 75 years ago, during the
depression. Is history repeating or is it just a
coincidence? I suppose we will have to wait and see, but I do
know one thing. Those that are solvent are getting the heck out
with all due speed. We have made note of companies and their high
level executives moving themselves and corporate headquarters abroad in
previous news stories. Now, the fastest growing and hottest
market now seems to be very high-end, upscale, gated residential
enclaves - in other countries for escaping expatriates. Case in
point are the number of residential projects for foreigners in the
Dominican Republic that have no shortage of well heeled buyers willing
to pay US$1 Million or more, in cash (my guess is that Donald Trump is
trying to cash in on this new real estate trend). Could be that
after everything else has been outsourced already, now gated and secure
residential properties are going the same route as well. Many of
these seemingly unconnected events just might be more related than you
think.
.
.
ON
THE TAKE - AMERICANS BRIBED INTO BACKING BIG GOVERNMENT
April
25, 2007
.
The
octopus is an overused but irresistible metaphor for the federal
government, given its tentacle-like reach into all our lives. Whatever
our position may be on the appropriate size and scope of government,
the focus of Limited Government Week activities that kick off Sunday,
its ability to co-opt us through favors, bribes and promises of
security is both impressive and ominous. This almost certainly
accounts for Americas conflicted attitude on the subject. Many of us
claim we want government out of our pocketbooks and business (and
businesses), but routinely turn to it for every conceivable sort of
assistance. For many Americans, government is the solution of first
resort. Uncle Sam's ability to bribe Americans with their own
money was the subject of a recent story in the Christian Science
Monitor, which reported that more than half of Americans receive some
sort of income from government programs. And those numbers are expected
to grow as the baby boomers begin retiring en mass. Slightly over
half of all Americans, 52.6 percent, now receive significant income
from government programs, according to an analysis by Gary Shilling, an
economist in Springfield, N.J., reported the Monitor. That's up
from 49.4 percent in 2000 and far above the 28.3 percent of Americans
in 1950. If the trend continues, the percentage could rise within 10
years to pass 55 percent, where it stood in 1980 on the eve of
President Reagan's move to scale back the size of government. That
two-decade shrink-the-government trend now appears over, if for no
other reason than demographics. The aging baby-boomer generation is
poised to receive big payments from Social Security and government
health care programs. The governments deepening involvement in
the insurance business, Social Security, Medicare and Medicaid, but
also its bailouts of private pension plans is making matters worse. The
dependency will deepen as the population ages. Shilling also
found that one in five Americans work directly or indirectly for the
federal government. Given the growth of state and municipal
governments, and the many contractors that feed off them, it's not hard
to see why government is one of the few booming industries left in the
United States. Americans are chronically unhappy about how
heavily they are taxed, and few feel the money is well spent, the
article points out. Yet at the same time, much of U.S. population
is on the receiving end of that tax-revenue stream. Few seem able
to make the connection between the two issues.
.
http://www.gazette.com/opinion/government_21618___article.html/
.
EDITORS NOTES:
If everyone ends up working for the government, who will be left doing
the real work? I mean, if no one is creating new businesses,
generating profits and jobs, then where is the tax revenue going to
come from to support this giant government employment agency?
Just a thought - my mind thinks of these kinds of things.
.
.
SO,
WHAT'S THE BEST WAY TO PAY FOR ALL THIS?
By
Robbie Dinwoodie - April 27, 2007
.
Walk
around our towns and cities, looking at some of the oldest buildings,
and you can see the scars left by taxation. The bricked-up windows are
testament to the desire to avoid the seventeenth- and
eighteenth-century levy on glass as a luxury item. It was the
Poor Law of 1579 that set parish rates as the main tax, decreed
according to individuals' means and subsistence. As recently as last
November, an attempt to come to terms with the centuries-old issue of
who should pay what, and how, was strangled at birth. The Local
Government Finance Review Committee, under Sir Peter Burt, recommended
the replacement of the council tax with an annual levy based on the
value of a property. But it was rubbished by virtually all politicians
before it was even published. The Local Property Tax (LPT) would
have been set at approaching 1% of the value of homes, which could have
hit wealthier middle-class voters. There are two issues about
local taxation, says Kerley. One is that it is highly technical
and complex to change systems. The other is political - who gains and
who loses. It is an iron rule of taxation that if 70% gain from a
change they will simply keep quiet, while the 30% who end up worse off
will kick up hell. Kerley says: There is a huge problem
over how to create streams of local taxation in a state such as
Britain, where people across the country have expectations of broadly
similar levels of service provision for the same levels of
taxation. He points out that in the US, for example, people
expect great variations between states even on major issues such as the
death penalty, but in Britain a large degree of homogeneity is
expected. That leads to fiscal transfers between better-off areas to
subsidise less wealthy parts of the country with greater social
problems but perhaps a lower tax base.
.
http://www.theherald.co.uk/politics/news/display.var.1335295.0.0.php
.
.
PENSION LIABILITY WIDENS - By Stephen Janis -
April 5, 2007
.
Despite
a slight increase in investment income and assets, the under-funded
liability for the Baltimore City Employees Retirement System continued
to grow in 2006, prompting questions from council members during an
annual review at City Hall on Wednesday. When is the bleeding
going to end? Council Vice President Robert Curran asked. Council
members peppered the board with questions as officials explained that
several years of poor investment performance continue to put pressure
on pension finances. The city contribution to the fund is up
significantly this year nearly 30 percent - are we looking at a trend?
Asked City Councilwoman Helen Holton, chairwoman of the Taxation and
Finance Committee, which oversees city pension funds. Kenneth
Kent, an actuarial advisor for the city, said the growth in the city's
under-funded liability of $119 million in 2006, up from $63 million in
2005 was the result of several years of investment losses, as well as
an increase in the number of city employees living longer. Still,
officials said, the city's contributions will continue to rise.
We are probably going to have to continue to contribute more money,
said Raymond Wackes, city budget director.
.
http://www.examiner.com/a-657620~Pension_liability_widens.html
.
EDITORS NOTES:
The April 25, 2007 edition of the Cincinnati Post says:
Kentucky's various public retirement systems have a collective
un-funded liability of nearly $19 billion, and already that debt is
having a negative impact on government services, especially on the
local level. It is also reported that West Virginia has $600
million in un-funded municipal pension liabilities. So goes it,
in Maryland, Kentucky and even in Great Britain the story would seem to
be the same. One American bureaucrat asks - When is the bleeding
going to end? And yet another says - We are probably going to have to
contribute more money. Sounds like a call for higher taxes to
me. So, what else is new?
.
.
LAWMAKERS TUSSLE OVER PROPERTY TAX RELIEF
- April
27, 2007
.
INDIANAPOLIS
-- Homeowners who face huge property tax increases are watching with
full attention as the Indiana General Assembly prepares to wrap up its
work this weekend. Estimates indicated that Hoosiers can expect
this year's property tax bill to increase by an average of 24 percent
-- something that clearly does not sit well with constituents, who have
lit a fire under lawmakers to do something about it immediately.
.
http://www.theindychannel.com/news/13210701/detail.html
.
EDITORS NOTES:
Real estate taxes going up by 24 percent in Indiana - Can you
imagine? Too bad domestic wages are going down, assuming you have
a job, rather than being increased by 24 percent - no?
.
.
EXPATRIATE LAMENTS LACK OF KNOWLEDGE IN THE
US - By Cody Brown - April
23, 2007
.
As
an expatriate American living in Istanbul, it can sometimes be
difficult to discuss my experiences abroad with those at home.
Often their conception of Turkey or the Middle East is contradictory to
how Turkey and the Middle East actually are. Yet the US ignorance of
things Eastern is far greater than my grandmother's forgivable
misunderstandings. In fact, I would say it is systemic. A poll cited in
Time magazine last May found that 66 percent of US college students did
not know where Iraq was on a map. Many are not aware of the different
ethnic groups that reside in the region. And when I taught at a US
university, many of my students were hard-pressed to explain what a
military occupation was. Unfortunately it seems that to most Americans
the Middle East is simply some non-specific place, inhabited by
non-specific people doing non-specific things. What can explain
this deficit of knowledge? Is it the fault of the media? The
government? Or simply a general apathy among Americans towards
international affairs? Most probably, it is a combination of all three
culprits, and unfortunately it seems that this ignorance is
self-perpetuating. US media, like most media, is market driven:
In order to be profitable the news media must contain content that
corresponds to conventional wisdom. If they show things that the public
does not understand than the public is more then likely to change the
channel and tune in elsewhere. Since the profit margin requires a
commercial break every seven minutes, the amount of detail delivered
during each news segment is limited. The content of most news reporting
is framed by these institutional constraints, making the US news media
incredibly shallow and fixed along the foretold paths of common
knowledge. Secondly the government, or at least the current
administration, certainly has an interest in US ignorance. Keeping the
public uninformed keeps the public from asking pesky questions like:
Who brought Saddam Hussein to power in the first place? Where did he
acquire weapons of mass destruction from? Or why are 1,000 Lebanese
dead equal to two Israeli soldiers? Without knowledge it is more
difficult to point out the inconsistencies and double standards in the
governments story. And finally, as much as I hate to admit it,
Americans seem to be more disproportionately uninterested in world
affairs than their global counterparts. You would think that with all
the money being spent in Iraq, all the news reports coming from Iraq
and all the US soldiers in Iraq, that more than 34 percent of Americans
could find the country on a map. It seems that the two oceans that make
our eastern and western borders function as insulation between us and
the rest of the world. Anywhere across the pond is lumped into the
general category of over there. We are only vaguely aware of
Europe since our cultural antecedents come from there. For most
Americans, everywhere else is somewhere too distant, strange and
complicated to possibly understand.
.
http://www.todayszaman.com/
.
EDITORS NOTES:
Stupidity, ignorance and indifference among the population are the keys
or open door to tyranny. God help them should they ever wise up.
.
.
MEDICAL CRISIS? TRY OVERSEAS - By Dan Adams
.
Facing
a health care crisis at home, including expensive medical treatment and
lack of affordable insurance, a growing number of Americans are being
forced to seek alternatives to the traditional forms of medical
care. Some are turning to the Web, to sites like
PlanetHospital.com and MedRetreat.com, where they find incredibly
discounted medical procedures at accredited hospital overseas.
Such was the case for Chico resident Suzanne Rakow, 59. When she was
54, she did what a lot of folks would like to do. Rakow retired. She
sold her home in the Bay Area, and moved to a slower-paced life in
Chico, where she enjoys reading and weaving. But then the problems
began, starting with getting health insurance. I wasn't able to
obtain insurance that was affordable, Rakow said. It was roughly
$12,000 a year. She eventually got a minimal policy through AARP,
The American Association of Retired Persons, which covered just the
basics. Last February, a serious health problem developed.
Rakow discovered a lump in one of her breasts and went to UC San
Francisco for tests. On February 21, she got the news she had
feared. The doctor came in and said, The results are positive,
said Rakow. When Rakow asked if that meant she had breast cancer, the
doctor replied, Yes. With little insurance coverage, Rakow said
she was astounded when she got the $10,000 bill for the biopsy. She was
even more shocked when she shopped around and received quotes for the
surgery and follow-up radiation. $100,000 or more, she said.
$100,000. I was shocked. Unable to afford it, the grandmother of
two young children said at first, she thought of doing nothing and
letting nature take its course. But she figured she had a lot of life
ahead of her. Following a friend's suggestion, Suzanne Rakow went
online and searched for surgery overseas. Among the sites she came
across was PlanetHospital.com. They were very responsive, Rakow
said. Within 24 hours, they had contacted me and within two days,
a doctor in Singapore had given me a call. When Rakow asked about
the cost for breast cancer surgery and radiation in Singapore, she was
told it would be a maximum $13,000, a savings of $87,000 over the costs
she was quoted by U.S. hospitals. I was amazed. I mean I was stunned at
the difference, Rakow said. Rakow decided to join an estimated
150,000 other Americans, Canadians, and Europeans who flee the high
cost of medical care in their own countries each year by going to
places like Singapore, India, Malaysia, Costa Rica, and Mexico.
According to the book Patients Beyond Borders by Josef Woodman, a
must-read book for those considering medical tourism, a heart bypass
that costs $130,000 in the U.S. costs $10,000 in India; a $40,000 knee
replacement in the U.S. costs $8,000 in Malaysia; a hip replacement
which costs $43,000 in the U.S. costs $12,000 in Thailand. The
discounts do not go unnoticed by U.S. medical practitioners. There are
also the facilities like Mount Elizabeth Hospital, where Rakow had her
surgery performed. American Dan Snyder, chief operating officer for
Mount Eliabeth's operator Singapore Parkway Hospital Group,
acknowledged that many Americans have a misconception on the quality of
medical care overseas. Most Americans when they think of health
care outside of the United States, they think inferior or not of high
quality, said Snyder. What's interesting is the quality of care that
occurs in our hospitals here in Singapore is second to none. When
Rakow checked into Mount Elizabeth, she was placed in a private room
with a private bath. In addition to her hospital bed, the room was
large enough for a desk, couch, and coffee table. And she had four
nurses on duty day and night to respond to her needs. Inside the
operating theater where the surgery was performed, it was difficult to
discern the difference between surgery in Singapore and surgery in the
U.S. The room was fully equipped to U.S. standards and the medical
staff was largely trained in the U.S. and the United Kingdom. Two days
after successful surgery, back at her luxury hotel a block from the
hospital, she was planning the next part of her journey. Rakow was
heading to Bali for two weeks before returning to Singapore for six
weeks of radiation treatment. In addition to the $13,000 bill for
surgery and radiation, Rakow figures she would spend about $22,000 for
airfare, hotel, food, and the Bali vacation. The total cost she
estimated would be about $35,000, compared to $100,000 had she stayed
home and had the surgery in California. What's more, she feels
the care she got in Singapore was at least as good, if not better, than
the way she would have been treated at home. I'd come back here
in a minute if I needed something like heart surgery, Rakow said.
.
http://www.news10.net/display_story.aspx?storyid=27118
.
EDITORS NOTES:
If healthcare is that much cheaper overseas, and housing and taxes and
university education for your children and your bank account interest
tax free (and there are no nut-cases with assault rifles shooting
innocents) - why not just relocate altogether?
.
.
READERS
WRITE IN:
.
I
would like to know if a panama foundation can open a US brokerage
account to do investing in US stock markets, futures, currencies etc
with the purpose of increasing its asset base while having tax
advantages (no capital gains, etc.)
.
EDITORS REPLY:
A Panama Foundation can own bank accounts, brokerage accounts, real
estate, works of art, patents, race horses, and just about anything
else you can think of. The only thing a foundation cannot do is
operate a business, or otherwise used in the same context as an
incorporated company. It can own shares of an incorporated
company, and it can make investments into a business, but it cannot
operate a business venture or engage in the same commercial activities
than a company could. Of course, one should understand the
difference between investing and commerce. Owning a bank account,
trading stocks, trading currencies is not commerce per say, but rather
investing.
.
Now,
your question is, can a Panama Foundation do this inside the confines
of the US, and the theoretical answer is yes. However, the
practical answer is that the IRS has gotten wise to US citizens that in
the past, have formed non US entities (corporations, trusts, etc.) for
the purpose of taking advantage of tax-free capital gains for foreign
owned accounts (in the US). For this reason, it can be an
exercise in futility to get a bank or brokerage account open inside the
US, and my advice is do not waste your time, or do so if you want the
experience. The good news is, there are financial services
companies outside of the US amicable towards establishing accounts for
Panama Foundations, and in some cases, for US or Canadian citizens
directly as well outside of North America (which can be another hassle
due to pressures by these governments). The bad news is that the
discount brokerage concept has not become the norm and it will be
almost impossible to find an E-Trade or some similar really cheap
transaction scenario. The only exception is an offshore discount
brokerage venture set up by Waterhouse and The bank of Luxembourg, BUT
they will not accept US citizens, and have amended their application
form in recent years to also disallow US citizens with dual citizenship
as well.
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