Insights & Advice


Finally, a hand-out for the silent majority

Over the last two years trillions have been spent to aid and assist Wall Street’s wealthiest bankers, Detroit’s blue collar auto workers, owners of gas-guzzling clunkers, first-time home buyers, thousands of Americans facing foreclosures and maybe another dozen or so programs, that we, the long-suffering, silent majority, will have to pay for. Yesterday, however, Washington finally threw us a crumb. Let’s just hope it will pass a House vote.

Buried within a Wall Street Journal page two story entitled “Senate Alters Taxes for Big Companies”, our lawmakers passed a bill that would allow buyers who have owned their current homes at least five years to be eligible for tax credits of up to $6,500. The first time home buyers $8,000 tax credit will also be extended to April 30, 2010 for closing by June 30, 2010. More than 1.25 million taxpayers have taken advantage of this credit which has cost you and me $8.5 billion so far. Unemployment insurance will also be extended for another 20 months since one million Americans have run out of unemployment insurance. Now, the House must take up the bill.

One of my editors –I won’t mention which publication—sent me an e-mail a few weeks ago. I was writing a column about the cash for clunkers program and she took a few minutes to vent. Like me, and I suspect most of my readers, she is a member of the silent majority.

“… and if I may vent for just a minute, those of us (like me, of course) who could use a new car but already has been (shocker!) driving a fairly efficient vehicle once again misses out. Kinda like those of us (like me, of course) who use credit cards responsibly probably will be hurt with the new credit card law. Don’t get me going on that! I’ve always been politically moderate and fairly friendly to the government, but I’m sick of living my responsible, efficient little life and having jerks who have to drive 10-mpg monster trucks and build up credit card debt (probably buying gas, no doubt), not to mention greedy corporate idiots, get the perks and bailouts. It’s turning me into a government-hater, or at the very least, a Republican … yikes 🙂 Sorry, just had to vent for a minute. Sensitive topic!
Have a nice day!”

Now I know that all of these programs are intended to save the world from financial collapse, keep unemployment as low as possible and put the country back in recovery mode. But from where I sit, those of us who have tried to do the right thing in life like live within our means as environmentally aware taxpayers, who save for retirement and keep our greed in check have come up on the short end of the stick this time.
Our retirement savings have been decimated. We will be in hock as a nation for the rest of our lives. Our social security will probably be cut in half and most of us will have to continue to work far longer then we expected.

My wife, Barbara and I have been house-hunting in Massachusetts. Before we started, we crunched the numbers, carefully considering whether we could afford it before embarking on this new venture. Granted, a $6,500 tax credit may not seem like much in the grand scheme of things. It is a tiny amount if you compare it to the billions culprits like Morgan Stanley, Bank of America, Merrill Lynch and others responsible for getting us in this mess were given, but to us it’s a lot and we’re grateful nonetheless.

I guess the moral of this tale is that it doesn’t take much to keep us, the silent majority, happy. Maybe our law makers are starting to figure that out.

Posted in Financial Planning, Macroeconomics, The Retired Advisor