There Will Always Be Some Excuse Not To Prepare For The Future

Somewhere along the line, our students have been taught that because of climate change, the world is going to end before they reach a ripe old age. Somehow the idea that the earth’s climate goes through cycles is not mentioned. Also not mentioned is the fact that in the past the earth’s climate has changed drastically, and we are still here. Remember, they have found plant fossils deep under the ice in Greenland. Aside from the destruction of the scientific method, what our children are being taught also has real-world consequences.

Marketwatch posted an article yesterday with the following headline, “Young people blame climate change for their small 401(k) balances.”

The article reports:

Lori Rodriguez, a 27-year-old communications professional in New York City, is not saving for retirement, and it isn’t necessarily because she can’t afford to — it’s because she doesn’t expect it to matter.

Like many people her age, Rodriguez believes climate change will have catastrophic effects on our planet. Some 88% of millennials — a higher percentage than any other age group — accept that climate change is happening, and 69% say it will impact them in their lifetimes. Engulfed in a constant barrage of depressing news stories, many young people are skeptical about saving for an uncertain future.

“I want to hope for the best and plan for a future that is stable and secure, but, when I look at current events and at the world we are predicting, I do not see how things could not be chaotic in 50 years,” Rodriguez says. “The weather systems are already off, and I don’t think it’s hyperbolic to be a little apocalyptic.”

It’s a fairly safe bet that Social Security will not exist by the time she is old enough to retire, so if the world chooses not to end before then, she will be up a creek without a paddle.

The article lists other consequences of what our children are taught regarding climate change:

Mental-health issues affecting young adults and adolescents in the U.S. have increased significantly in the past decade, a study published in March in the Journal of Abnormal Psychology found. The number of individuals between the ages of 18 and 25 reporting symptoms of major depression increased 52% from 2005 to 2017, while older adults did not experience any increase in psychological stress at this time, and some age groups even saw decreases. Study author Jean Twenge says this may be attributed to the increased use of digital media, which has changed modes of interaction enough to impact social lives and communication. Millennials are also said to suffer from “eco-anxiety,” according to a 2018 report from the American Psychological Association, with 72% saying their emotional well-being is affected by the inevitability of climate change, compared with just 57% of people over the age of 45.

The article concludes:

Similarly, Rodriguez said that, even without the threat of climate change, she likely couldn’t afford to save for retirement — and might not need to. Because she comes from a Latina family, she says culturally it is expected she would move in with family in old age and not have to pay as much in retirement costs.

“Both of my parents are immigrants. I did not grow up in a culture of professionalism. I graduated with thousands in student loans — I have never made enough money to save for the future,” she says.

Although she does not save money for retirement, Rodriguez does take action for the future: she’s taught herself to garden (“in case of a total collapse of the food system,” she says) and invests in learning hands-on skills like mechanics and bike repair.

“It’s kind of my own version of retirement,” she says.

Erin Lowry, author of “Broke Millennial Takes On Investing,” recommends preparing for retirement no matter what you believe will happen, referencing the Y2K phenomenon, when some people sold their belongings and made other rash choices in the belief that the world would end with the dawn of the year 2000.

“Even if you have a defeatist mind-set about the future of the planet, it’s better to prepare as though you, and the planet, will survive into your retirement years because the alternative is also bleak,” she said. “Failing to properly plan for a future means guaranteeing yourself a more difficult life.”

The baby boomers survived hiding under their desks in case of nuclear attack and the Vietnam war. We grew up to be tough old birds (with a few exceptions). I don’t think the problem here is the teaching on climate change–I think the problem is raising children without the moral foundation our country was built on. I also think parents need to let their children fail occasionally. Everyone shouldn’t get a trophy.

Preventing The Fleecing Of The Middle Class

The American tax code is a tribute to the effectiveness of lobbyists and big campaign donors. The loopholes in the code for people who make a lot of money are numerous. Even with loopholes in place, the rich pay a lot of taxes. As I have previously reported, The top 10 percent of income earners, those having an adjusted gross income over $138,031, pay about 70.6 percent of federal income taxes. About 1.7 million Americans, less than 1 percent of our population, pay 70.6 percent of federal income taxes. These numbers come from actual IRS data.

However, it seems that when it comes to eliminating loopholes, it’s always the middle class loopholes that go away.

Breitbart posted an article today about Congress‘ latest effort to take away a middle-class tax break. Because of a certain lack of faith in the future solvency of Social Security, many employers offer employees 401k retirement plans. Aside from allowing middle-class families to save for the future, these programs provide a place to put money so that it will not be taxed during the highest earning period of the employee. It will be taxed later at retirement when traditionally a person’s earnings are lower and generally taxed at a lower rate. Congress was evidently planning to alter the current system.

Breitbart reports:

“There will be NO change to your 401(k),” Trump tweeted. “This has always been a great and popular middle class tax break that works, and it stays!”

House Republicans were considering a plan to slash the amount of income American workers can save in tax-deferred retirement accounts. Currently, workers can put up to $18,000 a year into 401(k) accounts without paying taxes on that money until they retire and withdraw money from their savings. Proposals under discussion on Capitol Hill would set the cap lower, perhaps as low as $2,400. The effect would be a huge tax hike on middle class workers.

The plan to lower the cap on 401(k)’s would not have had an effect on long-term government deficits. Instead, it would have raised tax revenue now but lowered it in the future, since the retirement savings would already have been taxed. But taxing the savings would have had an impact on household budgets and may have discouraged workers from saving, increasing their future dependence on government benefits.

Let’s cut spending to ‘pay for’ tax cuts. Actually, if taxes are cut, economic growth should increase to a point where there is no loss of revenue. During the 1980’s, after President Reagan cut taxes, government revenue soared. Unfortunately, the Democrats who controlled Congress at the time greatly increased spending, so the government debt increased rather than decreased. Generally speaking, lowering taxes increases revenue–people are less inclined to look for tax shelters.

The Laffer Curve works:

Congress needs to keep this in mind while revising the tax code.

 

The Taxman Cometh (Again)

Investors.com posted an article about some of the ideas the government is considering in its search for increased revenue to close the budget deficit. It seems that the government is eyeing our 401(k) accounts.

The article states:

Rather than the current $50,000, Congress is considering limiting employer-employee 401(k) contributions to 20% of an employee’s salary up to a ceiling of $20,000, an idea dubbed the “20/20” plan. Even voters without 20/20 vision will quickly see it as another promise broken by a political culture whose spending has reached the level of insanity.

The Post (the New York Post) also interviewed Urban-Brookings Tax Policy Center co-director William Gale, whose idea of replacing all tax deductions on 401(k)s and IRAs with an 18% credit sent straight into everyone’s retirement account is also being considered within Congress.

This news comes as it was reported today that Social Security and Medicare will be out of money by 2033, three years earlier than last year’s estimate.

How about simply cutting the spending, ending GSA boondoggles, and making the first family pay for their own vacations?

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