In an interview, Jim Rogers, CEO of Rogers Holdings, an investment guru, tells an investment newsletter that the Federal Reserve is <a href="intentionally'>http://www.agorafinancial.com/afrude/2008/04/16/bernanke-gets-an-ffrom-jim-rogers/">intentionally debasing the dollar</a>. This means they are printing money with abandon, increasing the money supply and inviting inflation.  Historically, when other central banks have done this, the currency becomes worthless.  If the currency fails, the Federal Reserve will be a failed institution.  This is an inevitable result of a fiat currency and an economy driven by debt.

Watch this interview on CNBC where he elaborates on the problem.

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As we hear more about how 50% of bankruptcies are caused by a medical crisis, Universal Healthcare has emerged as an issue that is related to the bankruptcy one. There is a lot of misinformation out on this. They say 45 million Americans can't get health insurance.  Here are some facts Exposed by John Stossel of ABC News:

• 37% of the un-insured live in households earning more than $50,000 a year (and 19% live in households earning more than $75,000). Can people at these income levels afford major medical insurance? Yes. Should they be subsidized by you and me? No. Subtract this group and the number of uninsured people drops to roughly 28 million.

• 20% of the un-insured are non-citizens. Should you and I pay to insure them through a top-down federal monopoly? We think not. Subtract this group and the number of un-insured people drops to roughly 19 million.

• 33% of the un-insured are already eligible for existing government programs. No new program is needed for people who are already covered by current programs. Subtract them and the number of uninsured people drops to roughly 4 million. This is much more likely to be the true size of the problem.

45 million vs. 4 million -- that's a huge difference!

The congressional budget office estimates that a health insurance deduction could make it possible for 7 million more Americans to buy health insurance. 

The Treasury Department agrees.

Here is what Jim Babka says at Downsize DC:

Congress could wipe out the un-insurance problem in one swoop -- not by creating a new program, not by spending more money, and not by monopolizing American health care, but simply by letting people keep more of their own money to spend on health insurance.

Moreover, as we understand it, the proposed health insurance deduction could be structured to apply to payroll and Medicare taxes too, which are regressive taxes that hurt low income Americans far more than income taxes do.

Best of all, a standard health insurance deduction wouldn't just help those with lower incomes, it would help everyone who has to purchase their own insurance.

Now, what about the number of Americans who die because they have no health insurance? As far as we can tell that number is effectively very small, and almost certainly nothing like the 18,000 deaths that Michael Moore claims in "Sicko." Here's why . . .

Hospitals are legally required to provide treatment, regardless of ability to pay. Most doctors will also provide routine medical care to the indigent, because this is part of the medical ethos.

In fact, these are two of the main ways low-income non-citizens without insurance get treatment, in addition to the already existing programs at the local, state, and, alas, federal level.

This is not to say that some people don't fall through the cracks, because of incompetence, or for other random reasons. They do. Perfection is not an option in this imperfect world. It is simply to say that our current system has no fundamental systemic flaw leading to widespread death such as we see with health care rationing in the socialist systems.

We could simply leave it at this and say case closed. Congress could solve the problem of the un-insured with one simple change. No federal health care monopoly is needed. In fact, we have shown that government health care monopolies in other countries have led to unneeded deaths through rationing and waiting lists.

Credit card companies have found ways to stack the deck in their favor with the credit card agreements.  Most of us don't recognize what we give up and what we agree to in these one-sided contracts.    Most of us think credit cards are a necessity.  The problem is that while we are convinced we can't live without them, the credit card companies have legally gouged us with high fees, unconscionable interest rates, and stripped away constitutional rights.

You have to read the fine print, and find a consumer advocate lawyer that can interpret it for you.  Just some of the things you'll find in that agreement were outlined in an article from Bankrate.com

1.  Universal Default penalties which are triggered by a simple drop in your FICO score.  Something which you don't really have control.

2.  Bait-and-switch card offers in the mail that promise 0% interest rates, while in the fine print the company mentions all the things it can do to invalidate that promise.

3.  Shrinking grace periods which most people believe are 30 days, now average 23 days, and some cards have no grace period.  This tricks cardholders into accidental default, and triggers high interest rates and fees.

4.  Two-Cycle billing where the interest is calculated on the two previous month's balances.  You get to pay interest twice on the same balance.

5.  Inactivity charges for not using your card.

6.  Late payment fees, which are skyrocketing.  Once you have a late payment, by even one hour, you get slapped with a fee as high as $39, not to mention that your interest rate will go up.

7.  Over-limit fees are charged, even if the interest they charge or another fee they slap you with takes you over the limit.

8.  Balance Transfer fees are charged when you transfer your balances to the zero interest account you just opened.  So they in effect get their interest rate anyway.

9.  Mandatory arbitration waives your constitutional right to take a dispute to a court of law where you can request a jury trial if necessary.  Often these clauses also include barring you from participating in a class action suit.  A clever way to keep you from holding them accountable to the law.  While these clauses can be challenged in court, you are up against the highest paid attorneys in the country who make it their life's mission to give their employers (credit card companies) the greatest advantages possible.

10.  If you use cash advances or use some other charge outside the promotional rate, your payments will be allocated to pay off the lowest interest rate first, regardless of the timing of those charges.  So the higher interest rate has more time to accumulate compound interest.

"The AMT is an entirely separate tax system with its own definitions, exclusions, deductions, credits, and tax rates. It is the most vivid example of the wasteful complexity that has been built into our system to limit the availability of some tax benefits. The AMT was conceived as a way to make all Americans pay tax, regardless of their tax shelters and avoidance efforts. But over time, the AMT's simple mission has been made more complex and less effective. For example, as part of the 1986 tax reform effort, lawmakers who eliminated the state sales tax deduction nonetheless preserved an itemized deduction for state and local property and income taxes -- but only for those paying under the regular tax system. For those subject to the AMT system, the income and property tax deductions were eliminated as well. At that time, this rule had little significance for most taxpayers, but it is increasingly relevant as the reach of the AMT, which is not indexed! f! or inflation, has grown.

"Eliminating the AMT would free millions of middle-class taxpayers -- 21.6 million in 2006 and 52 million in 2015 -- from filing the forms, preparing the worksheets, and making the seemingly endless calculations required to determine their AMT liability. In 2004, an individual had to fill out a 12-line worksheet to see if he needed to file Form 6251, a 55-line form with eight pages of instructions. Those eight pages of instructions also tell the individual to redo many regular tax forms and schedules, including Forms 4952 (Investment Interest Expense Deduction), 4684 (Casualties and Thefts), 4797(Sales of Business Property), and Schedule D (Capital Gains and Losses) using the AMT rules. The individual may also have to fill out and file Forms 8582 (Passive Activity Loss Limitation) and 1116 (Foreign Tax Credit) on an AMT basis. The taxpayer also has to fill out a 48-line form (Form 8801) to determine whether he is entitled to credits for prior AMT payments. Finall! y,! the instructions warn that if the taxpayer claimed the standard deduction for regular taxes, he should recalculate his regular and AMT taxes using itemized deductions, because while the standard deduction is not available under the AMT, some itemized deductions are, but only if the individual itemizes for purposes of the regular tax."

"Household saving is crucial to the health of our economy and to the financial health of American families. An income tax reduces the return to saving because it taxes the income that saving generates. An individual who earns a dollar today pays taxes on those wages. If he then consumes the aftertax proceeds, he will not pay any further taxes. In contrast, someone who earns the same amount today, pays the same taxes on his wage income, but then decides to save the proceeds will be subject to additional tax in the future on the investment income generated from savings. A person weighing whether to spend money today or save it for the future may compare how much he can buy today against what he will be able to buy in the future with his savings. If the return on savings is subject to tax, current consumption will be less expensive than future consumption financed from savings. The tax on savings therefore operates like a penalty for those who choose to save."

The current national savings rate is negative 1.6% (as in we are spending more money than we are making, which, of course, is not only staggering on an national basis, but also unsustainable).

The panel's recommendation is to simplify and expand opportunities for tax-free savings for retirement, health, education, and housing. Following is the pertinent discussion:

"The Simplified Income Tax Plan would nearly eliminate the double tax on corporate profits by excluding dividends paid out of income earned in the United States. In addition, 75% of capital gains on sales of stock in U.S. corporations would be excluded from income.

"Under the Growth and Investment Tax Plan, the return to savings not held in these tax-preferred savings accounts would be subject to a flat rate tax of 15%. In addition, the simplified employer-sponsored accounts would use a Roth IRA, or prepayment approach, while the Simplified Income Tax Plan would use a traditional IRA, or postpayment approach. These two approaches provide similar incentives for savers, but they have different near-term tax revenue consequences. The overall tax burden on capital income would be lower under the Growth and Investment Tax Plan than under the Simplified Income Tax Plan, although some types of capital income might have a lower tax burden under the Simplified Income Tax Plan.

"Both of the panel's recommended options would remove existing disincentives to save. These options would provide opportunities for Americans to save in a simple and efficient manner by replacing the tax code's plethora of savings incentives with a unified system that would make tax-free savings for education, health, a new home, or retirement flexible, convenient, and straightforward. The tax code's redundant savings incentives and accounts would be combined into three simple and flexible accounts for savings. The creation of these three simple saving opportunities significantly reduces the bias against saving and investment that exists under the current system. In addition, the panel proposes changes to the administrative rules for some employer plans that would point workers in a pro-saving direction. The plans would allow most Americans to prepare for their future financial security free of tax. Not only would these accounts provide simpler and expanded oppor! tu! nities to save, the playing field for tax-preferred savings would be leveled by eliminating exclusions under current law that allow some taxpayers to save an unlimited amount tax-free through life insurance, annuities, and executive deferred compensation arrangements. The panel's plans also would include a refundable Saver's Credit that would give low-income Americans a strong incentive to save by matching contributions to savings accounts.

"These approaches would diminish the need for taxpayers to hire tax professionals to help them navigate the tax code's multitude of incentives. Americans would be able to make investment decisions based on their preferred investment strategy and no longer would be required to jump through hoops to make sure that they maximize their aftertax returns. Taxes would play a less prominent role in household savings decisions."

Given the partisan nature of Congress, as well as the likely nitpicking by groups feeling they were "unfairly picked on" by the proposed changes, the question remains as to what will happen in Congress over these proposals. The devil will be in the details as worked out by Congress, and therein lies another problem.

It can and has taken years just to address this mess, and there might not be another chance for years more to come. The temptation for Congress to meddle with the panel's recommendations will be extremely high. Lobbyists will be all over many, if not all, of these proposals in one second flat.

Is This Proposal Really Revenue Neutral?

The biggest problem I have with the set of proposals is simple: I fail to see how it can possibly be tax neutral. Let's see: We are getting rid of the AMT, reducing the marriage penalty, encouraging more tax free savings, and eliminating double taxation of dividends. In return, there is a reduction of part of the home interest deduction; elimination of deductions for state and local income taxes; and an ending to preferential treatment of employer-provided fringe benefits, such as child care, life insurance premiums, and education costs. Even though part of the home interest reduction was eliminated, the plan was broadened such that more people who do not itemize are likely to benefit than before.

I can easily believe some recommendations are revenue neutral (like replacing Earned Income Credit and other complicated nonsense with a single "work credit"), but others such as eliminating the AMT seem to take a huge "leap of faith." The panel ended its discussion of the AMT with the conclusion that the AMT could be eliminated because they were "broadening the tax base." I am not exactly sure how any of their proposals did just that, at least enough to matter, considering that the revenue generated by the AMT is expected to exceed regular tax revenues by 2013. It's too bad the report did not put a "price tag" on each proposal. Then again, putting a price tag on each proposal might have encouraged too much congressional bickering. Perhaps it best to just take that "leap of faith."

To the extent that this plan is not revenue neutral, I certainly am all in favor of slashing the military budget, pulling all of our troops out of Iraq, Europe, Japan, and South Korea, and reducing military expenditures enough to pay for any shortfalls. While we are at it, I would eliminate funding for the arts, a lot of foreign aid, bridges to nowhere in Alaska, crop subsidies, and probably a ton of other needless expenses as well.

Then again, even if the plan is revenue neutral, I am still in favor of slashing the military budget, pulling all of our troops out of Iraq, Europe, Japan, and South Korea, reducing military expenditures, eliminating funding for the arts, cutting back on foreign aid, canceling projects that would build bridges to nowhere in Alaska, etc., etc., etc., in order to help balance the budget. It's high time we see some sense of fiscal responsibility out of this administration.

The bottom line is what matters, and here it is: The panel's recommendations were probably a "best effort" at producing a significant proposal that will simplify the tax code, make it fairer, and have some chance of making its way through Congress. All in all, Mish applauds the work of The President's Advisory Panel on Tax Reform.