The Top 10 Laws and Policies Needed in America

The Top 10 Laws and Policies Needed in America

1. Eliminate all 2,300 Federal Subsidies.

Growing at 100 new ones per year and costing hundreds of billions of dollars annually, subsides try to over ride market forces and are therefore a “slice of Communism” - the most failed economic system ever. Here is where you can find lists of the subsidies - https://www.cfda.gov/ Catalog of Federal Domestic Assistance. However, they don't show the budgets and spending here. Instead the government deliberately hides the subsidies in many departmental budgets so that we the people cannot see their true annual costs. So when the government asks you what you want to cut to reduce spening – Military, Medicare, Social security, etc.? - tell them to just cut all the subsicies and restate all the departmental budgets for the last 20 years with the subsides out of them and instead in one Federal Subsidy Budget, namely the Catalog of Federal Domestic Assistance.

2. Kill and Replace Unaffordable Obamacare

Focus first on cost reduction measures. Government medical fraud is estimated to range between 10-25%. Private insurance is estimated to be less than 1%. So let private insurance companies instead of government workers manage government medical programs. Do real tort reform to cut down lawsuits that all of us pay for in our insurance and medical costs. Half of all Medicare costs occur for patients in their last year of life. Much of it are for procedures on terminally ill patients that don't really help the patient but are great for doctor and hospital revenues. Have cancer and only six months to live – well you also have blocked arteries, so let's do an expensive and painful quadruple bypass so that we can make sure that you suffer expensively and needlessly for the entire six months. The terminally ill patient may not even be capable of making such medical decisions. So in order to cover those situations without intrusive and unwanted government interference, everyone who signs up for Medicare (or is already on it) must also complete a thoroughly designed living medical will (which they can change at any time), available online to all medical providers, who are required to follow it and that no one, including family members, can over rule. Require all medical providers to charge the same price for their medical services to all patients. No more one price for the insured, and a price ten times higher for the uninsured. Get rid of all State insurance mandates so that national insurance policies can be competitively sold including "disaster" policy options for those that want medical insurance only for the large medical expenses.

3. Fix Social Security

Most of us only think of Social Security as a pension fund. However, it is three separate insurance programs – pension, disability, and widows with minor children. We currently fund them all with one Social Security tax. That tax is capped at a set dollar amount of $128,400 in 2018. Income above that limit does not get SS taxed. I agree with the reason not to tax all income in terms of the pension only. All of us in the pension plan should get back, when we retire, what we put into the program plus reasonable investment growth. So yes, we need to cap the income level for SS pension directed taxes to equate with the maximum limits set for Social Security benefits.

However, on the other two SS insurance funds (disability and widows with minor children), those are purely “welfare” programs. On welfare programs, a progressive tax on all income earned is typical and fair. So let's have two SS taxes – a capped tax for just the pension meant to equalize investment and return, and a SS welfare tax with no income cap on the rest. The tax percentage on the welfare part would likely need to be about 2%, with about 4% taxes to the cap for the SS pension. The exact numbers can be worked out by actuaries.

When your spouse dies, you receive the higher of the two SS checks and lose the other check. Depending on your spouses beneifts, that is a 33 to 50% loss of income. Your expenses (housing, property tax, insurance, car payment, energy bills, etc) don't go down 33 to 50% when a spouse dies. So offer upfront, at the beginning of collecting SS benefits, same as is done with private pensions, to collect slightly less SS benefits while both are alive and not lose the entire second SS check when one spouse dies.

One last recommended reform regards SS disability benefits. When unemployment benefits ran out after being extended to two years during the 2008 Recession, some unemployed applied for and received SS disability payments due to “stress”. Supposedly, they were too “distressed” to work. Close that ridiculous and expensive loophole by eliminating “stress” as a covered SS disability. That will help reduce total SS costs fairly so that we can keep SS taxes from rising to unacceptable levels.

4. Kill the Social Security "Torpedo Tax" on Earned Benefits:

This hits the middle class retirees hard. Once income is past $32,000 for singles and $44,000 for married couples, you may be subject to SS taxes that can be as high as 50%!! That is a much higher percentage than the wealthiest Americans pay on their income taxes. Eliminate the Torpedo tax. Better yet, eliminate all taxes on SS benefits which were originally promised never to be taxed.

5. Make all Decisions based on Race or Ethniticity illegal:

Only merit should be considered for college admissions, job offerings, and job promotions. Those with the most merit are admitted, hired, or promoted. No more reverse discrimination to achieve "diversity" goals.

6. Stop All Illegal Immigration with Real Tough Policies and Enforcement Measures:

No jobs, no schools, no housing for illegals and require strict checking and enforcement at businesses and schools. Anyone, including mayors, governors, and police who do not enforce these laws or does not report immediately to immigration authorities, or actively seeks to protect illegals go to jail for a long time. No asylum given at our borders. Illegals who want asylum must apply to the US Embassy in their own country and get approval or denial there. Anyone caught illegally in our nation is photographed, fingerprinted, and DNA taken, then stripped of all money and possessions except clothes, and immediately deported without trial. They are never allowed to come back to the US and if they do will be sentenced to jail first, then deported.

7. Re-define Citizenship to fit the Realities of our Modern World:

Only children born to American citizens anywhere in the world and those born in the USA to legal residents are citizens. The rest are “foreign nationals” born on US soil, not citizens. Neither they nor their parents are allowed to stay here. No more "anchor babies".

8. Stop all School "Social Promotions:

Much of the failure of public schools is a parental problem of some parents not working with their children to make them focus on their school work. Their kids are not trying, the parents are doing nothing about it, and expect the teachers to somehow do the teaching and the parenting job. Send kids to “study” detention daily who are failing, and if needed to summer school to learn the material. No more "social" promotions to the next grade. Leave them back in the same grade if they fail. If it happens a second time, bring the family to Family court. Those kids may be in a poisonous parental situation (for example drug addiction or alcoholism) and may need to be separated from the parents who have failed them.

9. Eliminate All taxes on Overseas Profits Invested in the US:

We want overseas profits to be invested in the US. That brings jobs and wealth to America. Though we have reduced the tax on overseas profits invested here, we remain the only nation on Earth who taxes these investments in our american economy. It is the height of stupidity to punish global companies who invest their overseas profits here. Let's end this immediately!!!

10. On Civil Lawsuits, Loser Pays All, including the attorney fees of their opponent:

We are a sue happy nation and ultimately all of us pay for those costs. Most other nations have much less lawsuits than America because they employ the loser pays all rule. If the loser used a lawyer(s) and did not lie nor withold important information to that lawyer(s), then the lawyer(s) pay all the opponent's cost plus refunds their fees to the loser. This should greatly reduce the number of frivolous lawsuits, plus encourage legitimate lawsuits to be settled out of court.

The Top 10 Economic Lessons for America with Explanations

The Top 10 Economic Lessons for America with Explanations

1. No other financial vehicle has created more long term wealth for Americans than the stock market. Take any 75 years of stock market performance you want and the average annual growth will work out to 10-11%. Here is a chart of stock market performance starting in 1900 - http://stockcharts.com/freecharts/historical/djia1900.html Also, check any 30-40 year period you want to see how the stock market grows if you buy and hold - Stock Market Performance Calculator - http://www.moneychimp.com/features/market_cagr.htm

2. A single stock market investment of $2,000 for a newborn child, based on historical stock market performance, has a high probability of being worth over $1,000,000 by the time the child turns 63. Can't afford $2,000? - $1,000 could grow to over $500,000; $500 could grow to $250,000. Still substantial. If you are fortunate enough to have the funds, a single $5,000 investment at birth could grow to over 2.5 million dollars by age 63, while one $10,000 investment could grow to over $5,000,000. Why not do this for your newborn child or grandchild? Note - Even if the future growth rate of these investments is less than 10-11%, the results will likely be quite good too. For example, $2,000 at 8% growth still will be worth over $250,000.

3. A person who invests $2,000 a year in the stock market every year starting at age 23 until age 65 will make a lot more money than a person who waits until age 44 to start. How much more? Based on long term stock market performance, the 23 year old at age 65 could potentially collect $128,000 a year for the next 42 years while the 44 year old would likely collect only $16,000 a year for only 21 years. If you invested $5,000 a year, the 23 year old would collect $320,000 a year for 42 years, while the 44 year old would likely collect $40,000 a year for 21 years. Give yourself the power of compounding growth by using time (youth) to make your fortune without ever having to 'earn' big money in your job in order to get rich.

4. Invest in Roth IRAs (and Roth 401Ks if available), not Traditional IRAs (nor Traditional 401Ks if the Roth option is available). Traditional IRAs are a government designed sucker's bet. Since over decades, your IRAs are likely to be worth many times more that your initial investment each year, the taxes on your withdrawals will be much larger than paying the little bit of tax the year you put money into a Roth IRA. Additional advantages of a Roth IRA include not being forced to withdraw funds each year starting at age 70 plus your heirs won't have to pay taxes on withdrawals from their inherited Roth IRAs. For example per point 3 above, would you rather be taxed on $2,000 income today by investing $2,000 in a Roth IRA or $128,000 worth of income or more 42 years later by investing in a Traditional IRA?

5. Never buy individual stocks – buy mutual funds, ETFs, and Index funds instead. Hold them for decades – don't buy and sell them as the stock market inevitably churns. Individual stocks can go to zero, but the other vehicles spread the risks over many companies and they are not likely to all go out of business. Most people simply do not have the time to study stocks that they bought on a daily basis to determine when to buy and sell. They are already at a disadvantage to the mutual funds which make up 80% of the marketplace that constantly buy and sell these stocks and ultimately they, not you determine if a stock is going up or down. Also most people are too emotional to make smart decisions or correctly time the market on buys and sells. Most people tend to buy when the stock market is doing well and sell when it is doing poorly. That results in emotionally buying at high prices and selling at low prices – a recipe for losing money and/or reducing long term growth results. When stock markets tank, 3 out of 4 stocks go down with it. That's just a historical fact and it sets up the emotional panic that influences people to make bad choices on buys and sell. 4 excellent ETF stock indices to consider purchasing - SPY (S&P 500), SLY (S&P 600 small caps), MDY (S&P 400 midcaps) and QQQ (Nasdaq Top 100).

6. Mutual funds, and ETFs are categorized several ways - by industry or 'general' – multiple industries, by growth or value funds, by small, medium, and large caps or a mix of all of them, by region of the world, by emerging markets, etc.. Over time as you purchase them, you want to move toward a mix of all of those categories. Keep in mind that it is easier for small and medium sized companies and emerging markets to grow more quickly than large sized companies and mature markets. For example, when companies like Walmart and McDonalds had only 100 stores decades ago, there were more opportunities for them to double and re-double repeatedly across the nation and world then now that they have saturated the nation and/or the world with thousands of stores. Therefore, the case is the same for mutual funds specializing in small and mid-size companies – and since they have research departments plus are spreading the risk among many companies, their downside risk is smaller than with an individual company.

7. Never increase your mortgage payments to pay off your mortgage early. You are giving the bank an interest free loan at great risk to yourself. Instead, put the money into a savings account or CD. It has a couple of advantages. Even at low interest rates, it will grow in time to an amount large enough to pay off your entire mortgage sooner than if you paid it off through higher monthly payments. More importantly, if a financial crisis occurs (loss of job, medical crisis), you will be better prepared to hold onto your house to either weather the crisis or sell your home before bankruptcy occurs, preserving your hard earned equity in the house. By paying off your mortgage through extra monthly payments, you have less money in your personal savings accounts, possibly little or nothing left, to weather the crisis and may lose the house and all your savings that went into it. However, don't put all of your savings into this mortgage payoff endeavor. Leave a significant amount of savings to invest in higher risk but higher long term return (stock market) investments even if it means taking longer to pay off your mortgage.

8. Avoid investments in illiquid companies that pay monthly dividends for two to eight years, before self liquidating. Also avoid investments in commodities and especially avoid General and Limited Partnerships in oil and gas exploration despite the nice tax breaks. Rule 5 applies here. These are indivudual companies, not pooled assets, and they can and sometimes do go bankrupt. They are bought through certified Financial Planners (not stock brokers) who are associated with a larger company enforcing financial guidelines with their Financial Planners. Madison Avenue Securities and also VFG Securities are common companies that work with their associated Financial Planners. Normally, these investments maintain limited flexibility to either liquidate early or late so that they liquidate in hopefully the best market conditions. For oil and gas General Partnerships (normally for one year to get the tax break, and then changed to a Limited Partnership), though they carry lots of insurance, if sued, all your assets and wealth can be utilized to satisfy the final settlement – not a risk worth taking.

9. Raising taxes on Corporations is really a tax on you. Corporations get their money from their customers – ultimately you. They cannot print money like the government. So when you raise taxes on corporations, they must get the money to pay for the taxes somehow while still making the investment returns expected by their stockholders and board of directors. Their first choice in dealing with the additional taxes is to raise their prices – you pay for that. However, market resistance to the new higher prices has the natural impact of lowering demand for their products and services, thus reducing their revenues. Unacceptable result for any corporation. They have two choices – lower prices to get more demand or hold prices and find other ways to reduce costs so as to increase profits. Either way, they have to come up with other options to pay the extra tax. The options are not good ones – layoffs, salary cuts, reduce or eliminate raises, slow down or eliminate business expansion, or go out of business. All those options are essentially a hidden tax on you because you are ultimately paying the price for this tax in reduced income to you either directly or indirectly (as the people laid off, etc. spend less making your employer poorer which eventually affects your income). Note, if they cannot maintain their previous profits even after taking these actions, then their tax liability goes down and despite the higher tax rates, the government loses, not gains tax revenues because there is less profit to tax. More so, when employees are laid off or salaries cut or grown more slowly – since government taxes their income too but can't tax zero income or must accept smaller income available to tax.

10. Raising Minimum wages only hurts the people you are trying to help. Getting a job and job experience is the key to eventually entering the middle class for those without job experience and/or skills. They have double to quadruple the unemployment rate of skilled and/or higher educated workers. 75 years of 30 minimum wage history shows that whenever minimum wage rises, the unemployment rate for unskilled workers rises. History also shows that most of these workers are under 24 and most live in middle class households with multiple family earners. Also, people earning more than the minimum wage are also hurt by “compression” as their wages are now worth less than before in terms of purchasing power. That is because whatever the bottom minimum wage is, products and services have not been increased. So income dollars, though nominally higher for minimum wage workers can't buy any more goods and services than before because there aren't more to buy. A minimum wage worker now more highly paid due to government raising the minimum wage does not produce any extra goods and services. More money chasing the same amount of goods could become inflationary and those earning the least amount of money will always be able to buy the least amount of (the same amount of goods and services produced in America). The often quoted “liberal” argument that minimum wage workers will spend all or most of their raises thus lifting the economy leaves out the fact that businesses will have less profit to invest in expansion and/or give more raises or hire more people offsetting the money spent by minimum wage workers. It also forgets that the always sky high unemployment rate for low skilled workers gets worse every time the minimum wage is raised.