Personal Debt a Major Issue in Indiana
Indiana ranks 3rd in the nation on personal debt in a recent SurveyUSA poll. 42% said they were in debt, 35% claimed to be even, and 19% thought they were coming out ahead when it came to personal finance. This is actually an improvement. Last May Indiana led the nation in personal debt with 47%.
Personal debt levels have an inverse relationship to the economic health of an area. The higher the debt level the more likely the populace to experience unemployment, underemployment, rises in cost of living, etc.
So what does this have to do with politics? Its the economy stupid!
I've seen few local candidates talk about jobs recently. Representative Randy Borror talked about the contentious "Major Moves" project and its ability to bring jobs to Indiana. He failed to explain how to the public how that would happen.
Mayor Graham Richards talks about firms that come to the area hiring a couple hundred here and there while ignoring the exodus of larger firms like Waterfield Mortgage.
Every candidate says its at the top of their agenda. Few prove it. Press the candidates on how they plan to improve our economy.
This is a public service announcement by Indiana Pundit. Don't drive or operate heavy machinery for at least 2 hours after viewing.
Personal debt levels have an inverse relationship to the economic health of an area. The higher the debt level the more likely the populace to experience unemployment, underemployment, rises in cost of living, etc.
So what does this have to do with politics? Its the economy stupid!
I've seen few local candidates talk about jobs recently. Representative Randy Borror talked about the contentious "Major Moves" project and its ability to bring jobs to Indiana. He failed to explain how to the public how that would happen.
Mayor Graham Richards talks about firms that come to the area hiring a couple hundred here and there while ignoring the exodus of larger firms like Waterfield Mortgage.
Every candidate says its at the top of their agenda. Few prove it. Press the candidates on how they plan to improve our economy.
This is a public service announcement by Indiana Pundit. Don't drive or operate heavy machinery for at least 2 hours after viewing.
posted by Indiana Pundit at 2:15 PM
1 Comments:
How do you improve an individual's economic standing? What tax has increased the most of all taxes? What tax takes the single largest bite out of your paycheck? Which tax is projected already to be too low to pay scheduled benefits? If you guessed the Social Security Old Age Tax, then you are correct.
The Social Security Old Age tax or SS-OASI is the single largest tax there is for workers. I just received my yearly statement from Social Security informing me once again, that they still have not figured out how to pay 100% of scheduled benefits. How long do you think it will take them to figure out what to do? If we let them, how many think they will raise our payroll taxes even higher? Pay more for the same lousy value. Not a smart move!
Every time the FICA tax increased, the US Savings Rate dropped. If they take more out of your paycheck, where do you cut back, groceries, utilities, house payment or savings? If you cut back on savings and you run into a snag, what do you do? Do you say charge it?
Social Security has promised $16 Trillion in present value benefits, but has only $1.65 Trillion in assets. Pretty obvious this program is broke. If you want to keep it, it is like adding another $87,000 in debt on top of the debt each worker already has.
I believe the way out of our economic demise is to allow the worker to keep more of their wages. This will allow them to be more self sufficient without the need of government. They will become owners in the economic growth of this country instead of bystanders standing on the sidelines while only a few prosper.
The Cost of Money is generally the highest rate of interest you are paying. Applying the Social Security tax to reduce the number of loan payments would be an excellent way to create wealth.
The average worker applying the Social Security tax each month to a mortgage reduces a 30-year mortgage to less than 14-1/2 years. Now make the very same payment of principal, interest and Social Security tax into 5% US Savings bonds for the remaining payments of the original term. At the end of 30 years the worker would have a home plus $370,646. This $370,646 is the value attributed to the Social Security tax being used to pay off the mortgage early.
The Social Security Administration has stated they can pay but 73% of benefits. This means the effective interest rate paid on our Social Security taxes is close to zero if not negative. Assuming a 1% return the value at the end of 30 years for the Social Security benefit is $177,807. The mortgage application method improved the net-worth of the worker by $192,839.
In simple terms you are lending social security your money interest free while borrowing money for college, mortgage, car, etec. How much of your debt could be reduced or eliminated by eliminating Social Security? Are you a donor?
Sure, we could continue to do nothing about social security, but is it wise to burden workers this way by not allowing them to save? What happens when they reach retirement age with debt, no savings and a social security program unable to pay scheduled benefits?
Social Security: What Went Wrong?
Myths: The Political Tool of Choice
The Larsen Plan for Social Security
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