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September 18, 2014 / 23 Elul, 5774
At a Glance

Posts Tagged ‘debt’

Is Obama Listening? Israel’s Debt Shrinks by 30 Percent

Tuesday, October 8th, 2013

The Israeli government’s deficit shrank by 30 percent, from $5.7 billion in the first nine months of 2013  to only $4 billion in the same period this year, Globes reported on Monday.

September’s deficit was only $250 million.

The deficit for the past 12 months represents 3.2 percent of the Gross Domestic Product (GDP), slightly more than the desired ceiling of 3 percent. The continuing decline in the government deficit will probably bring down number to below 3 percent by the end of the year.

Tax revenues grow by nearly 10 percent in the nine-month period, not including  September payments that were not recorded until October because of the recent  holidays.

Spending grew by 5.1 percent but less than the budgeted 8.8 percent  increase.

Rich Get Richer: Germany Saves $55 Billion on Crisis

Tuesday, August 20th, 2013

Germany is profiting from the debt crisis that’s debilitating most of their neighbors to the south and south-east, by saving more than 40 billion euros in interest on its government debt. Meanwhile, German treasury bonds doing fabulously well due to strong demand from investors seeking a safe haven, Spigel reported.

According to the German Finance Ministry, Germany will save a total of €40.9 billion (roughly $55 billion) in interest payments in the years 2010 to 2014, because of the difference between actual and budgeted interest payments.

On average, the interest rate on all new federal government bond issues fell by almost a full percentage point in the 2010 to 2014 period, according to the report, and Germany is a considered a very safe creditor in investors’ circles.

The rule of when it rains it pours seems to be working in Germany’s favor as well: it is seeing unprecedented high tax revenues from its robust economy, which has also led to a decline in new borrowing.

Between 2010 and 2012, the German government issued €73 billion (about $97 billion) less in new debt than it had planned.

On the other side of things, according to the Finance Ministry, the costs of the euro crisis for Germany have so far added up to €599 million, Spiegel reported.

This should be good news to all of us paranoids who fear a reawakening of the sleeping German militaristic giant who would try once more to conquer the world. Who needs to conquer the world when you can buy it for so much less?

Tale of 2 Debts: Moody’s OKs Israel’s A1 Rating; US Sinks in Red

Thursday, August 15th, 2013

Moody’s Investors Service affirmed the Israeli government’s A1 debt rating Thursday and credited Israel’s stable economy, while in the United States, an economist claims that the national debt is a staggering $70 trillion, 3.5 times the admitted amount.

Moody’s said it is upholding Israel’s current rating because of the resilience of the economy, expectation of a lower debt and favorable diplomacy with, particularly with the United States.

“Growth in the small, open economy has been sustained even with shrinking demand from Europe, a key trading partner,” according to Moody’s. It cited Israel as being a haven for entrepreneurs and a leader in the high-tech industry.

Another strong factor in Israel’s favor is the export of natural gas, which will help reduce the national debt, reduce taxes and create jobs.

On the negative side is “Iran’s nuclear program being the largest threat to Israeli territorial security,” Moody’s added. “However, a certain status quo has been achieved by maintaining a strong military deterrent, close ties with the US and friendly relations between the Israeli, Egyptian and Jordanian armies, It also credited the resumed talks with “helping to reduce Israel’s international diplomatic isolation.”

Coincidentally, IBM announced on Thursday it is buying up the Israeli Trusteer data security company for an estimated $750 million. Previously this year, foreign companies have purchased several Israeli firms for a total of more than $3 billion.

Israel not only has been the eye in the center of the Middle East hurricane that has swept through Arab countries but also has one of the strongest and most stable economies in the Western world.

In the United States, a poll released Thursday by Gallup shows that President Barack Obama’s economy rating is at an all-time low of 35 percent, reflecting large scale unemployment that is not reported because so many Americans have given up looking for work.

In addition, Fox News reported that University of California at San Diego Prof. James Hamilton estimates that the U.S. national debt is $70 trillion, 3.5 times the official debt of $16.9

That works out to approximately $175,000, plus change, for every man, woman and child. And that does not include a tip for the president.

“Hamilton believes the government is miscalculating what it owes by leaving out certain unfunded liabilities that include government loan guarantees, deposit insurance, and actions taken by the Federal Reserve as well as the cost of other government trust funds,” Fox reported. “Factoring in those figures brings the total amount the government owes to a staggering $70 trillion.”

Hamilton is not the first economist to estimate the debt to be so high, but the government prefers its own figures, for obvious reasons.

Eventually, say economists, the Treasury’s printing presses will be working overtime, leading to high inflation and interest rates, a double-whammy that can cause “stag-flation,” a recession with inflation.

The conclusion is that it would be wise to book early for a one-way ticket to Israel.

The Left: Getting Rich by Fighting for the Poor

Sunday, March 10th, 2013

Hugo Chavez’s death was met with tributes from Iran, Bolivia, China and El Salvador. The Western left did not waste much time adding their withered roses to El Comandante’s coffin. George Galloway called him another Spartacus. Jimmy Carter described him as a leader who fought for the “neglected and trampled.” Michael Moore praised him for declaring that the oil belongs to the people.

Whether or not the oil belongs to the people is a matter of some debate considering how much of it seemed to end up in Chavez’s pocket.

Chavez died with an estimated net worth of two billion dollars making him the fourth richest man in Venezuela and the 49th richest man in Latin America. For a while, Chavez weathered attacks from the media empire of Gustavo A. Cisneros, the richest man in Venezuela. Then before the 2004 election, their mutual friend Jimmy Carter brokered an agreement between them. Cisneros’ media stopped criticizing Chavez and both men bent to the task of getting even richer.

While the Bolivarian Spartacus lined his pockets with oil money, Venezuela’s middle-class was struggling to get by in a country where the private sector had imploded. Income increased on paper, but decreased in reality as inflation increases ate the difference. Around the same time that Comrade Hugo was launching the third phase of his Bolivarian Revolution, inflation had decreased household income 8.8 percent while consumer goods prices increased 27 percent.

On his deathbed, Hugo Chavez devalued his country’s currency for the fifth time by 32 percent, after tripling the deficit during his previous term when the national debt had increased by 90 percent. From 2008 to 2011, Chavez’s oil-rich government increased the debt by nearly 50 billion in a country of less than 30 million. That same year, The Economist speculated that Venezuela might go bankrupt.

Chavez had swollen the ranks of Venezuela’s public employees to 2.5 million in a country where the 15-64 population numbered only 18 million. With 1 public employee to every 7 working adults, the entire mess was subsidized by oil exports and debt. When the price of oil fell, only debt was left.

Those public employees became Chavez’s campaign staff with no choice but to vote for him or see their positions wiped out to keep the economy from crashing. And they won him one last election.

The dead tyrant leaves behind the lowest GDP growth rate and highest inflation rate in Latin America. He leaves behind an economy where more than half the population depends on government benefits or government jobs. He leaves behind a giant pile of debt for the people and 2 billion dollars in misappropriated oil money for his heirs.

But we don’t need to look to a leftist banana republic south of the border to see how profitable fighting for the poor can be.

Seven of the 10 richest counties in America are now in the Washington D.C. area. Arlington County alone added $6,000 to its average income in one year alone. D.C. and its bedroom communities got rich at twice the rate of the rest of the country and in the last election; Obama won eight of the 10 richest counties in the country.

Washington D.C. is richer than Silicon Valley. Median income in the D.C. area has hit $84,523 despite the city itself having horrendous unemployment and poverty statistics. The top five percent in D.C. earns 60 percent more than the top 5 percent in other cities and 54 times what the bottom fifth earns in that same city.

This wealth of government money isn’t a rising tide that lifts all boats. Income inequality in Washington D.C. is one of the worst in the nation. For families with children, the income inequality level in D.C. is double the average for the rest of the country.

But when you concentrate the wealth of the land in a single imperial city, then you end up with a sharp gap between the poor and the fighters for the poor. Mid-level jobs are disappearing, but high-level jobs continue to grow. Small businesses are going out of business, but lawyers and consultants are being hired at a breathtaking rate.

Washington D.C. has the highest concentration of lawyers in the country. One out of every 12 city residents is a lawyer. One in 25 of the country’s lawyers lives in Washington D.C. In 2009, the Office of Personnel Management reported that there were 31,797 practicing lawyers in the Federal government earning an average salary of $127,500 a year. Or to put it another way, the taxpayers were spending double Hugo Chavez’s two billion dollar net worth each year just to pay the lawyers.

Hiding Money From Your Spouse

Tuesday, January 29th, 2013

Do you have any secret funds or debts that your spouse doesn’t know about? I’m referring here to a hidden bank account or an unknown credit card or debt that you have never told anyone about.

If you do, then you are definitely not alone, as a recent Prudential Insurance company survey showed. When the British newspaper The Telegraph published the results of the survey at the end of November, it revealed that around 20 percent of British citizens have debts that they have not disclosed to their partners. Additionally, a slightly smaller number of people admitted that they had hidden investments and savings that were totally unknown to their spouses.

Those asked gave several reasons for concealing their debts. Many times, the underlying cause was a combination of bad monetary habits and embarrassment – over borrowing money to cover everyday living costs, or needing to pay off debts that shouldn’t have arisen. Some said their overspending had been caused by emotional distress, leading to financial problems. In many cases (22 percent), the reason for hiding savings was the fear of a breakup and making sure that there would be some money if this would occur. Eight percent even said that they hide these funds because they simply don’t trust the way their spouse handles money.

As a financial adviser, I often work with couples who argue with each other about money or who don’t trust each other when it comes to financial matters. Indeed, I noticed that attitudes to money are a huge cause of domestic disharmony. The statistics above definitely bear this out; they certainly don’t provide a very positive view of money or relationships.

The best way to combat these difficulties is to meet them head-on and prevent them from happening right from the beginning. If you have a son or daughter who is about to get married, sit down with the young couple and discuss financial habits, such as budgeting and saving. At the same time, emphasize openness and good communication in marriage. Trust and honesty are not only good values with regard to money, but also for marriage in general.

I recently discussed these issues with Sherrie Miller, co-founder of Choice of the Heart, an organization that prepares couples for marriage. And even if you have been married for twenty-five years, it certainly does no harm to review your financial habits with your spouse and to listen to some good and useful advice. Watch the video of my interview with Sherrie to learn more about financial fidelity and other tips for creating (and improving) a strong marriage.

Love Of Fellow Jews

Monday, November 5th, 2012

The kinship and love between Jews is one of the cardinal principles and hallmarks of Judaism and none could match Rav Eliezer-Lippa, father of the two great chassidic leaders Reb Elimelech of Lizhensk and Reb Zusha of Hanipoli, when it came to this particular characteristic.

Rav Eliezer-Lippa would spare no money or effort when it came to helping out a fellow Jew who was in desperate straits. Above all, he took a special interest in those poor Jewish tenants-farmers who were constantly being harassed by the feudal landlords because they fell behind in the staggering tax payments imposed on them.

Redeeming A Prisoner

It was the custom of the landlords to take these poor Jews and throw them into prison until they or someone else paid the debt. Rav Eliezer-Lippa was one who gave all that he owned for the mitzvah of pidyon shvuyim (redeeming the prisoners).

One time he heard that in a nearby town a certain Jewish tenant-farmer had been imprisoned by the landlord because he was unable to pay his rents and taxes. Leaping into his wagon, he took all of his money and drove off to see what he could do. When he arrived at the landlord’s home, however, he was told that the amount owed was twice as much as he had.

He pleaded with the landlord to accept the money that he had in payment of the debt and free the prisoner. His pleas were effective and the man was freed. Following this, the landlord turned to Rav Eliezer-Lippa and said, “I see that you are a truly good and righteous man and I am sure you are also an honest man in business. I have a business proposition you might be interested in.”

“What is it?” asked the rav.

The Proposition

“I have a certain relative who is a wealthy landlord in a town not far from here. He has a great deal of agricultural produce – wheat, barley, flax – that he is interested in selling, but he has been looking for an exceptionally honest merchant whom he can trust.

“I am sure you would be the perfect man and I will give you a letter to him so that he will sell you his merchandise.”

When Rav Eliezer-Lippa heard these words he replied, “I thank you very much for your trust in me but I am afraid that I have no money with which to buy the merchandise. You see, every available penny that I had, I gave you to redeem the prisoner.”

An Offer

When the landlord heard this, he said, “In that case, I will do this. Here is the money back and use it to buy produce. When you have earned your profit I am sure that you will come back and repay me.”

“I appreciate this very much,” said the rav. Taking the money and the letter he set off for the town to buy the merchandise and realize a handsome profit.

Arriving at the merchant’s home he explained why he was there and showed him the letter. The landlord read it and said, “My relative speaks very highly of you and he recommends that I do business with you. Since I have great respect for his judgment, I agree to it.”

The two men sat down and worked out a price and all the other necessary details. Then Rav Eliezer-Lippa went down to the granaries to look over the produce.

As he was walking with one of the servants he heard a terrible groan coming from one of the nearby buildings.

“What is that?” he asked in horror.

“Oh, that is a Jew who has been imprisoned by the landlord because he is behind in his debts. The landlord has decided to starve him to death.”

When Rav Eliezer-Lippa heard this he rushed back to the landlord and cried, “I wish to pay the Jewish prisoner’s debt immediately. Here is the money so you can release him.”

Prepare To Leave

When the Jew had been released, Rav Eliezer-Lippa prepared to leave. Where are you going?” asked the landlord in surprise. “What about the business deal that we have?”

Rav Eliezer-Lippa stood straight and stared at the landlord directly in the face saying, “I will be quite frank with you. Since I have seen with what cruelty you behaved towards this Jew, I have decided that I have no desire to do business with you in any way even if this means losing enormous profits.”

Three Ways That Your Pension May be Spent Before It Enters Your Bank Account

Friday, November 2nd, 2012

When saving for retirement, you may feel secure because you’re putting aside earnings into a pension plan. However, what you may not realize is that some of that money is going to be spent even before it reaches your bank account.

There are 3 ways in which your pension can disappear:

1. Taxes. Having a work-related pension is important because no matter how many years you worked, government social security programs won’t meet all of your post-retirement needs. As helpful as your pension is, be aware that some type of pension plans are taxed as ordinary income when you start taking withdrawals.

2. Debt.  If you still have debts (mortgage, credit cards, or other loans) when you retire, they will need to be paid before your discretionary expenses.  If you are having a hard time making ends meet before you retire, imagine how much more difficult it will be post-retirement on a smaller paycheck.

3.  Charity.  Retirement shouldn’t spell an end to your charitable donations.  If you are careful to give 10, 15, or 20 percent of your income to charity during the years before your retirement, why should you stop post-retirement? To paraphrase the beggar from Fiddler on the Roof, “Just because you’ve retired, I have to suffer?” Depending on your pension and other income-producing investments, you may not be able to make as generous donations as you once did, but certainly charity shouldn’t stop when you retire.

Remember that numbers can be deceiving – after taxes, paying off debt, and giving charity, the amount of your pension may not match the amount deposited in your bank account.  While this sounds drastic, adequate planning can help make up the shortfall.

So before your retirement income is spent before you actually retire review the figures so that you can be prepared. To make this easier, use these easy-to-use calculators to work out how much you are spending on existing loans, mortgages, and more.

Printed from: http://www.jewishpress.com/blogs/goldstein-on-gelt/three-ways-that-your-pension-may-be-spent-before-it-enters-your-bank-account/2012/11/02/

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