Despite concerns about the rising cost of oil and the economic prominence of China, economic analysts are predicting a strong year overall for 2011, possibly featuring growth in the market by as a much as eight perecent overall.

Market optimism is on a high note, with consistent spending for twenty- three weeks in a row. Since the market crash of 2008, investors have been very wary of this type of spending, and rightly so. But, it looks like the time for change may be coming soon.

Hopefully, the trend of recovery will continue in the new few months. The progress so far is encouraging, but is also exposed and vulnerable right now.

The thought of losing recent years’ tax cuts would alarm many people—especially those dreading a large hit. Imagine buying a company’s stock, in hopes of enjoying its 7.1% dividend yield for the long haul.

On an investment of ten thousand dollars you’d collect about seven hundred and ten annually right now, with a maximum 15% tax hit on those payouts. Now imagine hearing that your tax bill might soar to over a hundred dollars more per payout in 2011—not something which makes you feel great, but try to look at it in a new way.

Yes, the currently reduced dividend rate is due to revert to citizens’ ordinary income tax rate. That would be 39.6% under the proposed budget, but only if you have taxable income of more than three hundred thousand dollars in 2011.

Furthermore, the Obama administration seems to want to limit the increase in dividend taxes to just five percentage points, from 15% to 20%. That’s a meaningful jump, especially for those collecting a lot of dividends in retirement, but it’s not 39.6%.

Critics are also trying to spread alarm about the estate tax. Unless Congress decides otherwise, it will revert in 2011 from 45% to 55%, with an exemption of one million dollars.

It’s estimated that a one million dollar exemption would lead to just over forty four thousand households owing estate tax in 2011 — and they’d only pay taxes on any value beyond that initial one million. This is an irritation for the wealthy, but those problems can be significantly avoided by simply hiking the exemption, which seems likely sooner or later.

Here are several ways that well-known companies reduce their U.S. tax bills. Forbes recently noted that these companies paid relatively little in taxes in 2009, based on accounting provisions.

Many companies take advantage of lower tax rates abroad. For instance, a well known gas company had an eight billion tax bill globally, but it only paid two hundred million to the United States. A well known electric company was cited for losing money on paper, and therefore not owing taxes in the U.S., while at the same time making lots of money overseas, where tax rates are lower.

A computer company paid almost two billion in taxes –but that represented just 19% of its pre-tax income, thanks to lower tax rates abroad. Companies are using tax losses in past years to shelter current and future income.

A leading bank reported over four billion in pre-tax income, but was able to take advantage of deductions and credits to lower that below zero. It still has tens of billions of dollars in credit losses that will shield it from taxes for quite a while.

A prestigious car company reported three billion in pre-tax income, but only paid sixty nine million, thanks to losses carried over from previous years. Even companies that pay income tax now may get huge breaks later.

Another leading bank paid a solid 30.3% of its pre-tax income in taxes, but investors have reason to smile about the future. The company has a twenty five billion dollar allowance for losses on loans.

When those losses are realized, they will offset tax liabilities. The Government Accountability Office found in 2008 that 55% of U.S. corporations actually reported no federal income tax liability in at least one year between 1998 and 2005.

Suddenly, the thought that changing tax laws might make them pay a bit more to the IRS doesn’t seem so bad. Try to resist scare tactics designed to get you alarmed.

Dig a little deeper into the facts about tax changes, and keep the big picture in mind. Yes, some taxes may go up in the coming years, but most of us won’t be affected.

Besides, our nation is facing massive financial challenges right now. Perhaps a few more taxes might not be a bad thing.

These officials have reported a surprisingly optimistic outcome from these tests. While the Nation still has a long road ahead to recovery, according to a New York Times article, the losses are “manageable.” The purpose of the test was to determine whether these top few banks would need significantly larger amounts of capital to handle the economic recession. The results of the test will expose each bank’s currrent situation, in order to aid investors in deciding which entity they will trust with their money.

One goal of the stress test was to boost public confidence in the banks and thus raise stock prices. These effects have been witnessed so far in a few of the Nation’s leading banks-Wells Fargo, Citigroup, Bank of America and JP Morgan. Will this optimism last? The Obama Administration sure hopes so. If not, the new President may have to ask congress for billions more dollars in order to help out these struggling banks. So I guess all we can do is wait with bated breath until Thursday rolls around and the results of the test are shared. Let’s hope public opinion is affected enough to boost stock prices and begin aiding our struggling economy.

Well, you will be pleased to know that Obama followed through on his campaign promise to cut taxes for a majority of Americans. To what extent? A massive $13 a week. No, I am not joking, this is completely serious. Your tax cut, and the tax cut for millions of people, is $13 less each week in taxes.

So how do you plan on taking advantage of your new found wealth? Probably nothing. And that’s because 99% of Americans don’t budget so strictly that $13 is going to make a difference. Most people say they will spend $250-$300 a month on groceries for example. Or $50-$75 a month eating out. I know very, very, very few people who actually budget to the dollar and stick to it. You have to give yourself a little bit of a cushion.

And the problem is this $13 a week adds up to $52 a month. Is this going to help with a mortgage payment? A car payment? A credit card payment? No, this isn’t going to help with any of the things Americans need help with. This is going to turn into an extra lunch or two at Taco Bell, a new video game or some other kind of discretionary spending.

The idea is that it’s too little to save, too little to pay off debts, so people will just spend it on things that will actually boost the economy. Maybe so, but that means the spending bill isn’t actually helping people. It’s giving them a little more money to spend on a little more stuff they don’t need. Maybe the economy will get a boost from that, but I doubt a mere $13 a week per person is going to pull us out of a recession anytime soon. At least not while people’s homes are being foreclosed on and banks continue to be billions of dollars over in liabilities.

The biggest reason there is a crisis right now is very simple: people bought things they just couldn’t afford. That’s it. It all boils down to this. The economy looked better than it was because people were spending a ton of money, only the money was on credit. And people got hopelessly in debt to credit card companies. What do you do when your interest payments on your debt are more than you can pay? Answer: financial meltdown.

People also bought houses that couldn’t afford them. They got caught up in the no money down mortgage scame brought on by Democrats. They created Freddie Mac and Fannie Mae as a way for low income families to buy a house they could never afford. The idea was that everyone deserves a home. True, but that doesn’t mean everyone deserves a house. Everyone deserves transportation, but I’m not waiting in line for a Jaguar.

All of these people living outside their means was adding up to what we have now. Our economy grew artificially and unnaturally fast. Then it all came tumbling down. One lesson to learn is to live within your means. Don’t buy things on credit cards if you can’t pay off your credit card. Don’t buy a house with mortgage payments you can’t afford. It will only contribute to another crisis.

But lots of us did nothing to contribute to the crisis, yet we are losing or have lost money too. What gives? Well, there’s a lesson or two to be learned here too. First of all, anyone who claims to be a superstar fund manager or stock broker or some kind of predictor of the market is full of crap. Everyone got duped by these bozos because even a trained ape could have figured out that if you invested your money in anything it would have gone up.

Anyone who claims they know how the market will operate in the future is as ridiculous as someone who says they know it will rain a year from today. These crooks mismanaged your money and lost it for you. Which is another lesson to be learned- always know where your money is. Keep track of it. Don’t just hand it over to some fund manager or financial advisor without asking questions. Diversify your investments and think long term. It will save you some headaches in the future.

So what’s to be done? Nothing, nothing is to be done. Nothing ever needs to be done. The market is like the weather. You may say humans created global warming and that we can stop it and have some effect on the weather, but its just not true. Mother nature does what she wants, always has, always will. If you don’t like winter, the government can’t make spring come any sooner.

And right now we’re in financial winter. This is a big storm, but nothing we can do can make it go away. Just give it time, live within your means, and things will pick up just fine on their own. They always do.

Obama signed the stimulus bill into law. Notice how it wasn’t called the stimulus bill, but the American Recovery and Reinvestment Act. This bill was filled with more pork than a pig farm. I’m not sure which of the Democrats who voted for it in Congress had a chance to read it either. The bill puts the Harry Potter series to shame.

But at least radical groups like ACORN that donated to Obama got their billions. And at least federal bureaucrats got millions for their new cars. And at least “green researchers” got their billions. What does that even mean? Does anyone personally know a “green researcher?” They call it transparent, but we have no idea where this money is going. Just more of the same.

Bush started the spending legacy, Obama intends to carry it out. Didn’t he campaign on something like “change?” What has he changed? He is continuing to balloon our national debt, he is continuing deficit spending and he brought in half of Clinton’s cabinet. Now there’s change you can believe in.

The best part is that out of control spending got us in this mess. People buying houses they couldn’t afford, buying toys on credit cards they couldn’t pay off, etc. And now? More of the same, just more of the same…

At least I will never feel bad about blowing my life savings in Vegas or something. I’ll always remember the administration that managed to waste more money than has ever been wasted in the history of the world.

The latest installment of the bail out saga took a turn for the worse today. The Senate moved to vote on this “stimulus” bill. Soon they will pass it, the House will pass it, and Obama will sign it. Why am I worried? Here’s a better question- why aren’t you?!

Look at what the White House Chief of Staff said: “Never let a serious crisis go to waste…it’s an opportunity to do things you couldn’t do before.”  Just what do you think he means by this? It’s called special interest pet projects. It’s called business as usual in Washington. So much for change. I actually believed the guy…

Need more reason to fear? How about $4 billion to ACORN, a group accused of voter fraud? How about $400 million for brand new cars for government bureaucrats? How about $335 million to adult sex workshops? Need more reasons? How about this quote from Democrat Jim Moran:

“We have been guided by a Republican administration who believes in this simplistic notion that people who have wealth are entitled to keep it.”

We have Democrats screaming at us that Republicans failed for the last 8 years and that stupid ideas like tax breaks clearly don’t work. Earth to Democrats, YOU took over in 2006!! Guess who has been running the Legislative Branch, you know, the one that MAKES the laws? Democrats! It’s been your failed economic policies that got us into this mess.

It was Freddie Mac and Fannie Mae, created by liberals, that lead to this mess. It was the idea that government should lead and direct business, rather than provide it with a healthy environment in which to flourish. Government spending does one thing- put us into more debt. That’s it.

And now that our national debt will grow by over $2 trillion in less than a year, is anyone worried about paying any of that back? Is anyone worried about the collapse of the dollar? Is anyone worried about our economy crumbling? I sure am, but I guess it’s going to take $50 gallons of gas and $40 loaves of bread until anyone in Washington is…

But fortunately we don’t need to. Buffet is kind enough to tell us what he is doing with his money. And what is that? He is buying stock right now. But you may think investments are weak right now and not a good use of your money. Wrong.

The market has always been a roller coaster. No matter how low it gets, it will always get back up again. So the question is this: if a $120,000 house was on sale for $30,000, would you buy it? If you could get a brand new Lexus for $5,000, would you buy it? If a grocery store advertised 75% off everything in the store, would you go?

These are simple no brainers. Yet when the price of stock in a company goes from $100 per share to $10 per share, people run from it and call it a risk. Remember, Google shares used to be much less than Yahoo. So why is it that when most any other commodity is on sale for an outrageous amount, we feel the urge to buy, but when stocks tumble in value and are much cheaper, we don’t buy?

Well, if that’s your philosophy, maybe that’s why you don’t have as much money as Warren Buffet, who is buying up stocks like crazy right now. So if you want the kind of money Warren Buffet has, maybe you should do the kind of things Warren Buffet does. And Buffet says buy!

Or is it? Yes, GDP has gone down. Yes, jobs are being cut. Yes, bankruptcies are ever increasing. But to steal the words of JFK, “The only thing to fear is fear itself.”

We have been in this situation before. We had recessions as early as the 1800′s. We had a Great Depression. We had a recession as recent as the Carter administration that was as bad as this if not worse. What happened every time? We got out of it.

So rather than worry about who is unemployed or bankrupt, we should be worrying about how to stop unemployment and bankruptcy. Instead of spending rampantly on anything and everything, the government should be figuring out how out of control spending got us in this mess.

In short, don’t panic. To the government- please reconsider your silly “stimulus” bill. It is loaded with measures that are just paying back your big Democratic donors. Half those things don’t do anything to stimulate the economy.

Let’s look at what got us out of past recessions and simply let history repeat itself.

Having advanced degrees can be very helpful in the workplace. If you are a high school graduate, you really have nowhere to go but up. You can get a technical degree from a vocational school, an associates or a bachelors. Those with a college degree can also pursue a technical degree or pursue a masters or PhD.

If you are looking into any one of these degrees, the first thing to decide is the school. Is it accredited? many employers will not consider degrees from schools that are not accredited. Do they offer financial aid? Are their prices reasonable? What would the class schedule look like? Can I participate online?

These are all questions to ask. Remember, education is an investment. You are paying money to get a degree that is supposed to earn you more money in the future. The cost to benefit is something to analyze. A masters degree could take years to payoff, so ask yourself if it is really worth it.

There’s nothing worse than being in a bad situation, then doing something to make it worse. Education isn’t the right route for everyone. Sometimes you just need to swallow your pride and take a job that under employs you so to speak. The economy will pick up again, it always does. Soon the job markets will open up again. But just be patient. If education is the course you want to go, do your homework and make sure it will actually help you make more money, not lose it.