Yikes!! What is Obama Doing to my Retirement Savings???!!!

By JC Leahy

People need to understand the magnitude of what Obama is doing to us.   The Obama debt shown above doesn't include the $1.2 trillion new money "printed" through QE I and II, and doesn't include the massive, open-ended amount of money being printed now  at a rate of $40 billion a month with no end in sight through QE-III.  In other words, they are buying Treasury bonds on the open market using made-from-thin-air, newly "printed" dollars. Rather than admitting that they are printing money, they call this "quantitative easing."   And by the way, the 10-time multiplier effect  in reality turns $1.2 trillion into $12 trillion. Everybody agrees that creating this much new money will degrade the purchasing power of existing dollars, including grandma's retirement savings. It's called inflation. You can see inflation when you go to the gas pump or the grocery store or pay your winter heating bill.  For example, gasoline cost $1.95 when Obama became president and I paid $3.71 yesterday and thought it was a pretty good deal!!  Go to the grocery store and check for yourself: everything is rising in price!!  When you finance excessive spending by creating trillions of dollars out of thin air, existing money buys less.  This has the effect of stealing from grandma's retirement account to finance Big Government!!

Importantly, the above debt also does not include 5 trillion of Freddie Mac and Fannie Mae obligations, it doesn't included guaranteed obligations such as those under TARP, and it doesn't include 46 trillion of unfunded obligations such as Social Security and Medicare.  Consider these obligations, plus the astonishing level of "national debt" it's safe to say that with 12 trillion of new money plus unlimited QE3 money creation, you still ain't seen nothin' yet!!!

(ALSO SEE EARLIER ARTICLE: THE ROAD TO STAGFLATION)




PS - For those of you checking the numbers, it will be by the end of the Government's fiscal year 2013, the last fiscal year of the Obama Administration, that Obama will have added more debt than the first 43 presidents combined -- according to the Obama Administration's own projections.

Obama Quote of the Decade - With Re-Election Poster

The Quote of the Decade:
"The fact that we are here today to debate raising America's debt limit is a sign of leadership failure. It is a sign that the US Government cannot pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government's reckless fiscal policies. Increasing America 's debt weakens us domestically and internationally. Leadership means that, "the buck stops here.' Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better."
~ Senator Barack H. Obama, March 2006 - Pass it on until election day!!

This Re-Election poster would make a great desktop background on your PC at home and at work! 

A Must-Have 2012 Election Souvenir Tee Shirt !!!!

I saw these 2012 Election 2012 Tee Shirts and bought a couple.  It will make a great statement now and a fantastic souvenir later.  

The tee shirt says, "If you've got a business, you didn't built it yourself. -- We've got to get them out in 2012!" If you want some of these for yourself and family, here's the link

Election Humor and Food for Thought! :)

Billboard on Route I-35 South

If you think this is a cool pic, why don't you express your view and make it your profile pic in Facebook, Twitter, and gmail at least until the 2012 election??!!

Colonel Brooks Tavern Closure Date Announced!!

By JC Leahy

Colonel Brooks Tavern employees today were notified that the Tavern will close its doors forever on September 15.  On-duty employees were seen crying.

Colonel Brooks Tavern is a landmark in the Brookland area of DC.   It is frequented by Catholic University and Trinity College students and employees, and by employees of nearby hospitals, among others.  It is at 901 Monroe Street, NE, directly across the street from the Brookland Metro Station.  The Tavern is closing to make way for private development of 205 to 220 upscale condominiums and 150 below-grade parking spaces.   The new structure will include 12,720 square feet of street-level retail space as well.  Colonel Brooks Tavern will not reopen in any of the new space, according to Colonel Brooks management.

"Where will we go for lunch now" lamented one nurse. "There's nothing else comparable around here!"

Consumer Complaint: Carroll Home Services / Carroll Fuel

JC Leahy, MA Accounting

August 15, 2012

General Manager
Carroll Fuel/Carroll Home Services
2700 Loch Raven Road, Suite 200
Baltimore, MD  21218

Dear Sir/Madam:

Ref. Account # 10-51

Your accounting department is abysmal.  So much so that it is a barrier to doing business.  MOST bills that you send contain errors!  Although I believe I usually catch the errors, having to carefully check each billings and deal with the constant corrections takes too much of my valuable time.  Consider, for example, the fact that I am writing this letter now.

You have been dunning me for $80.52 since last heating season.  Given your abysmal track record, I have not paid.  I knew that you were probably in error.  I explained to your accounting folks that I pay by individual invoice, and I demanded to know what invoice had been underpaid.  All this time, your accounting department has been UNABLE TO TELL which invoice it was.  Then FINALLY on July 30 (postmark) you were able to send me documentation that invoice #6457659 had been issued at $580.41 and paid at $499.89, leaving a balance due of $80.52. Sigh....I am enclosing a copy of that invoice.  Also I am enclosing a copy of an e-mail from your sales agent specifying my fixed price agreement for last season.  My price cap was $3.599 per gallon.  You invoiced me at $3.999 per gallon for 138.8 gallons of fuel.  I adjusted the erroneous invoice to the correct price per gallon.  I also enclosed a $25 coupon as payment towards the invoice.  The adjusted amount due was, correctly, $499.89 and that is the amount of the payment you received.  Which leaves a balance due of ZERO.

I like your field reps and delivery service, but your accounting department is too much to bear.  It is irritating to receive a dunning notice.  It is distracting to have to check every bill I receive.  It is time consuming and frustrating to have to talk by phone to your accounting folks who are SO confident in their accuracy but are ALWAYS wrong.  What kind of a way is that to run a business???!!!!   

As a way of apology and compensation for everything, you should send me $75 in coupons towards next seasons' fuel.  Otherwise, there is not a snowballs chance in hell of my continuing my two delivery accounts with you.

Sincerely yours,
JC Leahy, MA Accounting

PRINTING MONEY: QUANTATIVE EASING AND THE OBAMA ADMINISTRATION

Here's an entertaining video on the meaning of quantative easing.  Enjoy!!

JC Leahy

Letter to the University of Virginia Board of Visitors

By Claudia Guy

Dear Editor and a Message to the Board of Visitors,

How did University of Virginia President Teresa Sullivan's ousting by the Board of Visitors become such a big news story? I understand that the UVA community wants a clear explanation as to why Sullivan was ousted. But in my mind the only meaningful issue is how the ouster became such a big news story.. I've seen plenty of other less-than-meaningful arguments (below) that I cannot begin to understand.

1. "Semper Sic Dragas." Do you honestly believe Dragas' actions were in any way tyrannical? The Board of Visitors has every right to oust a president if they have different goals and priorities for the school. That's part of their job, as a committee, to develop long-term goals for the university and work as best they can to make sure those goals are achieved. The Board of Visitors offers checks and balances to the University's system and I doubt very much that the Board of Visitors took such a bold step without first trying to find some middle ground.

2. "You can't run a university like a business." Of course you can - and should! In this economic crisis funds are drying up in all directions - from federal sources, state sources, and grass root (alumni) sources. Maybe the University's students will rack up debt like they've just gotten their first credit card (because that may, in fact, be the case for many) but in the long term debt is never a good solution. The school itself should have a budget and stick to it. If you can't afford all of your programs even after rigorous fundraising, you will simply have to cut your spending. Racking up debt is not the answer. Look at Greece. Or, if you prefer, just look across the Potomac for an example a little closer to home.



3.  Similar to #2 above but more specific: "Corrupt business principles should not govern the University's budget.  For example, it is corrupt to pay more to some professors simply because their graduates will go on to higher-paying fields and therefore be able to make bigger donations in the future."  This is a lovely conspiracy theory, but I can tell you with 100% certainty that possibility of future donations is not a factor in professors' salaries.  A professor's salary is based on two main factors: First, how much would the professor be paid at another university?  Second, how much would the professor be paid working at a job in their field?  There are a myriad of other lesser factors, but these are the governing principles.  If professors are not reasonably paid according to these two factors, we will lose them either to other universities or other jobs.  Yes, in the end the chemical engineering professor will probably be paid more than a liberal arts professor.  But, it has nothing to do with the potential for future donations - or any other philosophy for that matter!  This is not a conspiracy, people!  It's simply economics.

4. "Two years wasn't a long enough time to know if Sullivan would do a good job. She was just getting her feet wet." First, I would like to say I don't think the issue is whether or not Sullivan was doing a good job. I believe the real issue here was whether or not the Board and Sullivan had insurmountable philosophical differences that neither party would compromise on. If that was the case, two years was plenty of time to determine that the board-president relationship would not work.
So, why the scandal, O Board of Visitors? If you were so definitely in the right when you acted, then why, do you appear so in the wrong now? I'll tell you why.  Because the community asked for a cause of termination and you did not offer one. You were too concerned about the principle of the matter. "This is well within our right as Board of Visitors and this is supposed to be a private affair, so 'no!' community, you may not have your answers!" You were too busy thinking about principle to think about perception. And the perception was that if you're not telling us your reasons then whatever you're hiding must stink.

Now you are faced with a reality check, Board of Visitors!  Things are out of control - donors are pulling money and faculty are resigning! Your community feels wronged! More importantly your community wants answers! Now that everyone's watching, vague answers will not do. Tell us clearly why President Sullivan was fired!!!!

Signed,
Claudia Guy

Tax Tip: Avoid "Married Filing Seperate" Returns If You Can

By JC Leahy, MA Accounting
Twitter@taxhelpwhenneed

A married person can file as head of household (rather than married-filing-seperate) if he is considered an "abandoned spouse" for tax purposes.  To be an "abandoned spouse" you need to meet these requirements:

1. You file a separate return

2. You maintain a home where the child for whom you may CLAIM AS DEPENDENCY DEDUCTION lives for more than half of the year

3. You must pay more than half the cost of maintaining that home, and

4. During the lat 6 monts of the year, your spouse must not live in the same house as you.

To claim the dependency, in turn, you must pay MORE THAN HALF THE COST of maintaining the child OR have an agreement approved by a divorce court that says you get the dependency exemption.

IS IT TOO LATE TO MAKE YOUR IRA CONTRIBUTION??

By JC Leahy, MA Accounting
Twitter@taxhelpwhenneed

HAS THE DEADLINE PASSED TO MAKE MY INDIVIDUAL IRA SAVINGS  CONTRIBUTION FOR 2011??

The really great news is that you have until the April 16, 2012 tax filing deadline to open your Traditional IRA savings account and make your 2011 IRA contribution -- if you are eligible.

AM I ELIGIBLE TO CONTRIBUTE SAVINGS TO A TRADITIONAL IRA?

If you (1) have taxable earned income and (2) you are less than 70.5 years old, then you can establish a traditional IRA and contribute money to it. It's that simple.  Earned income includes salary, wages, commissions, self-employment income, alimony, and combat pay.  It does not include any pensions (including Social Security), interest, dividends, or annuities.  In the year you reach the age of 70.5, you can no longer establish or contribute to a traditional IRA.

HOW MUCH CAN I CONTRIBUTE TO MY IRA?

For 2011 (and 2012 also) you can contribute $5,000 per year or the amount of your taxable earned income, whichever is less, to a traditional IRA.  This is true whether you are covered by a retirement plan or not!!  If you have reached the age of 50 during the year, you may contribute an additional $1,000 catch-up contribution.  This makes a total limit of $6,000.


Here's the exception.  It's a good one: If one spouse doesn't work or earns less than $5,000, he/she may establish and contribute to an IRA based on the earnings of the other spouse.  Between them, there is a limit of $10,000, which can be allocated in any way they wish between their two IRA accounts -- provided that neither one's account receives more than $5,000. For example, if the husband makes $100,000 and the wife makes zero of earned income, the wife may contribute up to $5,000 into her traditional IRA and the husband, likewise, may put up to $5,000 into his IRA.  This also applies to the $1,000 catch up contribution.


One other fine point:  If you have a Traditional IRA and also a Roth IRA, the $5,000/$6,000 limit includes both. In other words, you can only contribute $5,000/$6,000 TOTAL between the two.






HOW MUCH OF MY TRADITIONAL IRA CONTRIBUTION CAN I ACTUALLY DEDUCT?
Don’t be confused on this point:  If you are not covered by a retirement plan at work at any time during the year, you can deduct every penny of your traditional IRA contribution.  Period. .


IRA Deduction Phase Out: It's slightly more complicated if you were covered by a retirement plan at work.  In that case, if your "Modified Adjusted Gross Income" (MAGI) is less than certain thresholds, you still get to deduct your entire Traditional IRA contribution.  But you can still make your $5,000/$6,000 contribution to the IRA account -- you just won't be able to deduct it. Here are the Traditional IRA deduction phase-out parameters:

FOR 2011 IRA CONTRIBUTIONS, if you were covered by a retirement plan at work any time during the year, use this table to determine if your modified AGI affects the amount of your deduction. If Your Filing Status Is... And Your Modified AGI Is... Then You Can Take... single or head of household $56,000 or less a full deduction up to the amount of your contribution limit. more than $56,000 but less than $66,000 a partial deduction. $66,000 or more no deduction. married filing jointly or qualifying widow(er) $90,000 or less a full deduction up to the amount of your contribution limit.  more than $90,000 but less than $110,000  a partial deduction.  $110,000 or more  no deduction. married filing separately  less than $10,000  a partial deduction.  $10,000 or more  no deduction. If you file separately and did not live with your spouse at any time during the year, your IRA deduction is determined under the "Single" filing status.

For 2012, here are the Traditional IRA Contribution Deduction Limits:

If Your Filing Status Is... And Your Modified AGI Is... Then You Can Take... single or head of household $58,000 or less a full deduction up to the amount of your contribution limit. more than $58,000 but less than $68,000 a partial deduction. $68,000 or more no deduction. married filing jointly or qualifying widow(er) $92,000 or less a full deduction up to the amount of your contribution limit.  more than $92,000 but less than $112,000   a partial deduction.  $112,000 or more  no deduction. married filing separately  less than $10,000   a partial deduction .  $10,000 or more  no deduction. If you file separately and did not live with your spouse at any time during the year, your IRA deduction is determined under the "single" filing status.

One other important tax-law quirk: If your filing status is Married Filing Separately, you are screwed!  Your IRA deduction phase out starts at $1 of Modified Adjusted Gross Income and that deduction drops to zero when your MAGI reaches $10,000!!

 In situations when you can't deduct your Traditional IRA contribution, why would you want to make the contribution at all?  There are two reasons.  First, earnings accumulate and compound every year without being diminished by annual income taxes.  You only pay the tax on earnings when you withdraw them in your old age -- and you will probably be in a lower tax bracket then.  Second, if you have a nondeductible Traditional IRA contribution, you get what is called a "basis" in your IRA account.  This just means that when you eventually withdraw from your IRA, the "basis" portion will not be taxable.


If you need assistance with your income tax filing this Tax Season, you might want to contact:

JC Leahy, MA Accounting
TaxHelpWhenYouNeedIt.com
Silver Spring, Maryland
E-mail: jcleahy@TaxHelpWhenYouNeedIt.com
Tel. (301)537-5365