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Finance and the condition of the economy in the US is on many peoples minds. As we look around us, the prices of things are rising. Gasoline, food, utilities, and entertainment costs have all gone up since the financial fallout of 2008.
In a recession, you usually see deflationary prices. The costs of items go down to stimulate economic activity, and get money flowing in the market. Other than interest rates, I can't really recall anything that has gone down in price. Can you?
Now, since prices are rising, and have been since the financial crumble we saw in late 2008, I would call that an inflationary economy. In my mind, the opposite of a recession. Yet, the government still says we are recovering from a recession, but are still in one more or less.
This now leads me to the topic of taxes. Everyone applauds the fact that their income taxes have gone down. 2011 will see the re-distribution of many of the Bush tax cuts that were to expire at the end of 2010. This redistribution includes a reduction in social security taxes.
Does this mean you will see more money in your paycheck? Indeed it does. However, we are funding the social security system less in the future than we did prior to 2011. The social security system already could not sustain itself on what people were paying in. How could reducing what gets put in be a good idea?
For those that will have passed on long before the social security system has a zero balance, they will enjoy the tax benefits now. For those of us that continue to pay social security taxes, and have since entering the workplace, we get to enjoy the benefit of the tax cut now, but will receive no benefit when it is tie for us in our later years.
I look around at how government agencies that are experiencing huge budget cuts are getting even more money out of us. Libraries raise their fees, park fees go up, and many things that were provided as free services now levy a charge.
In schools, we are offered cute products that showcase our children's work to purchase. Of course the school gets a cut from each product sold. I see this almost every week with notes home and other offers from my daughter's public elementary school.
Student pictures are now taken twice a year. They even send them home and let you see how nice they are. Hey, if you don't want to pay for them... just send them back. Of course parent's want to keep the pictures of their precious kids. The portrait studio gives the schools a kickback for each package sold.
As we head further into 2011, I hope the public gets more vocal in telling the government how their money should be spent. While we can enjoy the short-term benefits of a tax cut, we also must realize that the government is merely shifting how they will get our money.
If it isn't taxes, it is fees. It may even be a kickback from the t-shirt you buy featuring your kids school artwork.
What do you think? Are you sick of the smoke and mirrors?
