Tuesday, January 05, 2010

What I'm reading...

* Health Bill to expand IRS role - "Internal Revenue Service agents already try to catch tax cheats and moonshiners. Under the proposed health care legislation, they would get another assignment: checking to see whether Americans have health insurance.

The legislation would require most Americans to have health insurance and to prove it on their federal tax returns. Those who don't would pay a penalty to the IRS.

That's one of several key duties the IRS would assume under the bills that have been approved by the House of Representatives and Senate and will be merged by negotiators from both chambers."

Seems like that plays right into the election cycle of 2010. Do you think someone will spin the IRS checking your health insurance status into "Obama's IRS becomes Big Brother"? It should make for an interesting ad cycle.



* US Public Pensions face $2 TRILLION Shortfall - The US public pension system faces a higher-than-expected shortfall of more than $2,000bn that will increase pressure on many states’ strained finances and crimp economic growth, according to the chairman of New Jersey’s pension fund.

The estimate by Orin Kramer will fuel investors’ concerns over the deteriorating financial health of US states after the recession. “State and local governments are correctly perceived to be in serious difficulty,” Mr Kramer told the Financial Times.

“If you factor in the reality of these unfunded promises, their deficits will rise exponentially.”
Estimates of aggregate funding requirement of the US pension system have ranged between $400bn and $500bn, but Mr Kramer’s analysis concluded that public funds would need to find more than $2,000bn to meet future pension obligations.


A shortfall of that size could force state governments to take unpalatable decisions such as pouring more public money into their funds or reducing pension benefits. State and local governments have already cut spending to close budget deficits."

Yikes. This is another argument for developing a separate gov't entity comprised of appointed officials to make hard financial choices. What elected official is going to make the smart choice between raising taxes or cutting state pension benefits?

* Byron Wein's Surprises for 2010 -

1. The United States economy grows at a stronger than expected 5% real rate during the year and the unemployment level drops below 9%.

2. The Federal funds rate reaches 2% by year-end

3. 10-year Treasury above 5.5%.

4. S&P 500 rallies to 1300 in the first half and then runs out of steam and declines to 1000, ending where it started at 1115.10.

5. The dollar rallies against the yen and the euro.

6. Japan stands out as the best performing major industrialized market

7. President Obama endorses legislation favorable for nuclear power development.

8. In the November Congressional election the Democrats only lose 20 seats, much less than expected

9. When it finally passes, financial service legislation, like the health care bill, proves to be softer on the industry than originally feared.

10. Civil unrest in Iran reaches a crescendo.

Many of these items can not occur together. If the dollar rallies, it probably whacks stocks. If the 10 year note rallies, mortgage rates climb and housing takes another leg down.

This feels like a list designed to get 50% of the items right.

Cheers!

5 comments:

Anonymous said...

The IRS - Health Insurance requirement is yet another scam upon the dwindling working class. The majority of people who will benefit from this health care joke don't even file, let alone pay. So let's see, they work illegally, or under-the-table, they don't work, don't have insurance, don't have to worry about not having insurance because the paperwork that is required is processed through a department that doesn't even know they exists.. What a human waste dump this country is becoming. It's like the US is the Rodman Landfill of human civilization, brought to you by one specific political party buying votes from people who don't pay

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