• Economic Proposals

  Filed under Economy, Politics
  Oct 15

  Obama and McCain clashed yesterday over proposals for new economic policies. People are wondering what they both proposed and how their proposals would affect them. Here’s what to do for each candidate.
  

  Obama proposed something in particular that is very dangerous. He suggested that families should be able to withdraw from their 401k’s in order to pay the daily bills. They could withdraw  up to 15% or $10,000 of their 401k without penalty and without fine. I noticed he didn’t mention anything about “without taxes.” This means if you withdraw $10,000 before you are 59 and a half, the normal 10% penalty won’t apply to you. But this says nothing as to whether or not the normal income tax would apply to this withdrawal. If so, you would withdraw $10,000, but you would only get about $8,000.

  Solution? Do not withdraw from your 401k, period. First off, that enslaves you on something called social securty, an entitlement program that won’t be around much longer. Second of all, that encourages spending over saving. The last thing you need to do right now is withdraw from your 401k in order to fund your new car, the remodeling of your house, etc. If you will perish by not paying the bills, then yes, you should be able to withdraw from your 401k. But you should avoid this at all costs, so that’s my two cents there.

  McCain proposed buying mortgages at full price from banks to keep them from failing and to keep people in their homes. Brilliant. Now the government is going to go even further into debt once these people stillcannot pay off their mortgage. Instead of banks and private corporations stuck with the baggage, the government is. How does that affect you? Well, the defiicit and national debt will increase for one. That will lead to inflation. And that will lead to worhtless money as our economy begins to crumble and finally collapse.

  Solution? If you are having trouble with your mortgage, get out of the house. You bought something you couldn’t afford. It’s not entirely your fault. With only 3% down and a low upfront interest rate, it may have seemed you could afford the mortgage. You’re only partially to blame. Truth is, you couldn’t and can’t afford that house. Best thing to do is sell the home for whatever you can get for it, then live somewhere you can afford. Maybe a home in a less expensive area. Maybe you can rent a while. There’s options. Just don’t get caught contributing to the potential crisis our government would face should they purchases thousands of worthless “investments.”

  Lesson to be learned here? Live within your means, don’t spend more than you can afford to spend, only go in debt if totally and absolutely necessary, save as much money as you can and don’t touch your savings if at all possible. Follow that advice and you will get far in life.

  Tagged as: Economy, finance, mortgage, Politics
  
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