I'm Frank J. Eberhart, CEP, RFC and a high net worth financial advisor and author of my award winning book The Procrastinator's Bible for Financial Success. I provide health care, 401K platforms, wealth and trust services, and institutional money management to my clients. Click here to receive my informative newsletters on the most up to date financial and economic information.
Newsletter Dated: 9/26/2008 8:29:24 AM
Subject: Political Decisions Vs. Economic Decisions
Political Decisions Vs. Economic Decisions?
I don’t know about you, but I am very tired of sacrificing the consumer and the country for the almighty vote (me & you). We are slowly becoming from the land of opportunity to the land of entitlement (our ancestors should be turning over in their grave). The problem is we are being forced into socialism by the few corrupt (including our political system - we need a 3rd party) not the majority (again - reactionary from congress). Congress fix: more regulations to regulate the regulators? Our political systems are trying to put the blame on Wall Street! Nonsense. Not fixing the problem from the core, we are operating on regulations from the 1930’s. As an example: What happened to the SEC/ NASD (now FINRA)? Department of Banking and Insurance? Sleeping? Or paying themselves big dollars for bad performance? Stop rewarding bad behavior.
Let’s talk about real issues as they call it on “Main Street”.
The bailouts of the banking system -
· First Freddie & Fannie. The purpose of Freddie and Fannie is to insure A rated mortgages; the role of the government is to insure “loses” at Freddie and Fannie - not the whole company. Freddie and Fannie do not service loans; they sell them - thus another bank bailout, not a consumer one. The consumer lost everything, stock, and dividends. They held a secret meeting on a weekend and took over a privately held company. Welcome to the new Russia.
· 2nd, PMI insurance, the purpose the consumer pays PMI? To INSURANCE for the banks in case of default! So, what happened to all the money paid into PMI?
· 3rd, Wamu, Merrill Lynch, Lehman Brothers, Bear Sterns, this is the free market system; America is about failure and success. They collapsed due to bad management and investments - they got bought! They consumer hosed again.
· 4th, AIG. Why bail them out? Again the consumer takes the hit.
· Health care, the government can’t control Medicare and Medicaid: both Socialized medicine! You think we would learn from Canada. The areas that need help are the hospitals that close every day form the so - called “uninsured”. They use our emergency rooms for their health care, Hospitals cannot refuse treatment. They would not buy insurance regardless how cheap it is.
I’m not sure what world all these people live in, but they have no clue in that bubble around D.C. I think we need to move Washington D.C. to Kansas (just kidding Kansas - I would not wish that mess on you). Our economic system will weed out the good from the bad all by itself (Enron, etc). Unfortunetly for us we get the tax bill, lose our money and potential income (AIG, GM, FORD, among a few who have suspended dividends and stock values to low to sell).
Solution? Economic decisions:
1. Let them fail; as evidenced the system works, someone else’s failure is someone else's gold mine. All being bought, Goldman Sachs and Morgan Stanley seizing opportunities to become monster banks. That’s free enterprise!
2. Institute a national sales tax (tax everything) that goes into a holding company for the purpose of aiding hospitals, uninsured, mortgages, health care premiums. In addition charge an excise tax on companies who do not re - patriot their overseas money back to the U.S. for taxes. A Trust company could manage the assets and redistribute like a foundation would by application.
3. Reduce corporate taxes to 20 - 25% or less for companies who create U.S. jobs and re - patriot overseas money to the U.S. tax system. For those who don’t: raise their tax rate.
4. Give tax credits for health care, primarily HSA accounts (health savings accounts). They lower premiums, save a ton on FICA tax, receive tax deductions for funding the account for employees, and help the employers insure catastrophic emergencies (like heart attacks, stokes, etc). They cap how much they are liable for; one of the biggest bankruptcies is still health care. As and example, HAS 1500 out of pocket expense, 1500 out of pocket for hospital stay, 3000 maximum liability! Not the 80/20% rule after you have met your deductible.
5. Stop pork barrel policies to lobbyists etc.
6. This time sign the alternative energy agreement; I’m tired of sending over 700 BILLION and growing dollars to lunatics.
7. Vote them out, less government - more voice for “Main Street” not their own self - serving interests.
Let your voice be heard. Keep America the best and strongest free trade country in the world.
Frank J. Eberhart