Sunday, January 30, 2005

I'm a late adopter

I have finally upgraded the operating system of my Macintosh to OS 10.3, "Panther". (I like to wait for all the bugs to be fixed before upgrading.) So far, it's hard to see what the excitement is all about. However, the Mail program has been considerably improved and I spend enough time with e-mail that that improvement alone is worth the effort to upgrade.

I have also finally turned on earthlink's spamBlocker. Only messages from someone in my address book come through. Someone not in my address book will see a reply from earthlink giving them a way of asking permission to get through to me. I have resisted this, but I receive on the average 90 spam messages per day. Dealing with them was getting to be too much of a hassle. (I did not see changing my address as an option. There are countless genealogical pen pals that I want to hear from and notifying them all would be extremely difficult.)

From now on, now that my finger has improved, I will try to post on this blog at least weekly.

Monday, January 24, 2005

Taxes

This weekend I was working on my income tax. I do it in little pieces instead of all at once. It's less overwhelming that way. Something surprised me.

One last minute change that Congress made, was to allow people to have a choice between deducting state income taxes or state sales taxes. This was promoted as being fair to the folks in states with no income tax. This discussion that I heard about this was that the only people that would be affected would be people who lived in no income tax states and a rare few who had purchased something major, like a boat.

I discovered that my deduction this year for estimated California sales taxes, based on my income, was greater than my deduction for California income tax. It looks like it will be the same next year or any other year. California is a high income tax state. People in other states must be noticing the same thing.

Whether they realized it or not, it looks as if Congress has passed a stealth tax cut. I have not penciled it out, but doing the math in my head it looks like it will benefit the wealthy as well as me.

Saturday, January 22, 2005

Foreign Debt

The value of the dollar has declined with respect to other currencies, notably the euro. However, with our massive Federal deficits many observers are surprised that it has not fallen more and faster. An article in the Wall Street Journal yesterday pointed out that foreign countries are financing our Federal deficit by buying U. S. bonds. In Novermber, foreigners bought $83 billion of U. S. securities., of that Asian central banks boght $28 billion of U, S. bonds. The governments of China and Korea have been large buyers of debt along with Japan. Japan is the largest holder of U. S. debt.

If foreign countries started stopped buying U. S. bonds, or worse yet, sold U. S. bonds, it would drive up interest rates in the U. S. and that would hurt business. Sudden selling by one country would drive U. S. bond prices down and could trigger an avalanch of selling by other countries and institutions.

While the Wall Street Journal article discussed the economic aspects of this, I think the political aspects are more interesting. While George Bush has declared his intention to spread democracy throughout the world, his policy of deficit spending has made us economic hostages to countries like China and Saudi Arabia.

The old saying that Federal debt does not matter because we ow the money to ourselves no longer applies.