Approaching the Fiscal Cliff and Pecan Pie

Bragging a bit on myself, I'm known among close friends to have developed a recipe for making a truly mean pecan pie. No one who ever has tasted it has failed to ask for the recipe. I usually bake 8 nine-inch pies each baking. We heat up and eat some with ice cream on it for dessert. I give some to family and friends and put the rest in the freezer. I usually do this several times a year. I've never before published my recipe but am attaching it to the bottom of this column. I'd hate for it to die with this 80-year old with many health problems. During the past few weeks I've been trying to keep you updated on tax developments and possible strategies to come out the best you possibly can. Few sizes fit all. What works for one individual's circumstances may not be suitable for another's. I'll keep that up until the end of the year, but now want to address the Washington debate about the looming "fiscal cliff" Jan. 1st that could cost us big time if not averted. Despite the current stalemate and no easily visible progress, we don't know what all may be going on behind closed doors. President Obama has said he's open to negotiations but is insisting upon higher tax rates on the "wealthy" defined as those households earning more than $250,000 a year These are not always "wealthy" because of dependents, college costs, mortgage and other payments, etc. etc. Republicans, especially the "my way or no way children" of the tea party, demand no increased tax rates. There may be a "hidden" strategy that could help break the supposed impasse. Republican leaders have openly said they're willing to see increased "net" revenue other than increasing tax rates. That could include closing some loopholes, merging some departments and agencies, making changes (without destroying) in Medicare and Medicaid, reducing some foreign expenditures, etc. For example, in this view the Department of Education as such has outlived its usefulness. A few of its functions should be retained, but these easily be transferred to the Department of Interior, for example. The Department of Transportation could join Education and Transportation departments shifting to Interior along with the Medicare and Medicaid functions. Of course, Interior would need more workers to handle its increased load, but far less than the current combined numbers. Among those being dropped from the federal workforce could be some eligible for regular or early retirement. Some obviously would go on the unemployment benefit rolls for a time but with an improving economy, which is the overall goal, might find suitable employment before benefits run out. The jobs market economy is not going to improve (maybe negligibly in some areas) until businesses in general see the light at the end of today's economic tunnel to start expanding and hiring again. That's not going to happen until people in general realize that it is more profitable for businesses to do what they are doing now. They can sit on the money set aside for expansion and draw (admittedly low) interest. At least they're getting a little something while they wait. Historically, when rates are cut, people start expanding their businesses and hiring again. The new hires put more and more on payrolls from small business to giant corporations. People prosper more, pay more taxes accordingly and the economy continues to grow. Low rates INCREASE revenue and total tax receipts. This has happened under liberal presidents like John Kennedy and Bill Clinton and conservatives like Ronald Reagan and both President Bushes. We are a capitalist country, the economic giant of the world. Obama's vision is a social welfare country like most in Europe. The biggest money-saver over the long run should be Social Security which will go bankrupt in a few years if something isn't done. Retirees paid into the system throughout their working lives and expect to be paid their guaranteed benefits. An overwhelming number of them don't really understand how Social Security's trust fund is operated. Let's review it. When your Social Security and other health taxes such as Medicare and Medicaid were withheld from your paycheck, it was deposited into the trust fund. A lot of people wrongly believe the government spent it for other things and it won't be there. That's not exactly right. A lot of the money is taken out of the Trust Fund in exchange for an IOU and spent on other government costs. Here's why. If the federal government had to borrow money (and it's done a lot of it) it would have to pay interest at the oft-changing market rates. That's an actual expense to the taxpayer. Instead, the Social Security Trust Fund's excess over current benefits goes to other government costs that otherwise the government would have to pay interest on if it had to borrow in the commercial marketplace. I may be dumb but I don't see how paying interest at commercial rates when the money is available from the Social Security Trust Fund internally interest-free benefits the taxpayer. I'll take interest free money anytime I can get it and invest it in safe holdings. Actually, Social Security could cut its payroll by hundreds of thousands of federally employed workers AND increase benefits substantially AND leave bigger benefits for survivors. This has been prove4n in the real world in three counties in Texas, including the huge Houston county. Here's how it works. Back then, state governments and/or counties in the state could decline Social Security and establish their own retirement system. Texas Gov. Rick Perry, an unsuccessful candidate for the GOP nomination told about it during his relatively short-lived campaign. Here's how it worked. The counties jointly hired a company for a flat fee to manage the system. It sought bids from all over to handle the investments. The Texas-based company selected invested in high-yielding interest bearing accounts with some diversified securities with high dividend returns. It managed the funds conservatively. Over the years the portfolio grew substantially into the hundreds of $millions. When one retired, he or she selected from their account the amount they wanted and were paid monthly (more frequent if wanted with extra amounts when wanted. They thus were freed from the set monthly retirement check they wanted. To prevent over-spending and causing them to run out of money before they died, these amounts were limited only by the retiree's life expectancy. When a retiree died, the balance in the account was distributed. Funeral expenses were paid from the account and the spouse, if any, immediately got a $250,000 check and then a monthly check for whatever amount wanted within the life expectancy limit. When a beneficiary died, his or her heirs got the money, not Uncle Sam. That system continues successfully today, the only one in the country not required to be in Social Security where the first $15,000 in benefits are taxed except for those with very low incomes. I'm guessing neither Democrat nor Republican want to see us tumble over the fiscal cliff January lst. Some say Obama will gamble the GOP will get the blame and he will be able to do basically what he wants. Others say, the GOP will do exactly the opposite. Neither should happen. I'm also guessing the GOP will let Obama raise the tax rate on "the wealthy" in exchange for changing the threshold from $250,000 to $1million. After all, the "wealthiest" already pay their fair share, a combined total of 90% to total income taxes paid while the bottom 50% pay nothing and in some cases because of refundable credits actually get money back. In a democratic society, principled compromise is mandatory unless one party controls presidency, house and senate. Democrats have had the formula down to a T. Unless the Republicans get their trading act together, they are going to become a permanent minority party like Libertarians, Independents, Communists, etc. They must realize whites soon will be less than 50 percent of the population. They may already be there in voting age population. Minorities include Hispanic, Oriental, Black, Indian, etc. They want a piece of the action. The GOP has forfeited the growing Hispanic vote with their deportations and border fences That shouldn't be happening, not with Hispanics far more conservative with basically the same family and work ethic values. Democrats like it that way because organized labor claims they take jobs away from white Americans because they'll work for less. Actually, the Hispanics merely are competing in the jobs market just as whites compete all the time. Competition has long been the American way and the basic tool that has made the United States the global powerhouse it is today. Let's pray that Obama with GOP help can keep that worldwide role. What happens with the fiscal cliff will tell us whether we're up to the job. Ted's Pecan Pie (I usually fix enough ingredients to make at least 3 at a time. This is for a single pie. I buy pecan pieces already broken and full halves, each in 1 lb. packages.) INGREDIENTS 1 Cup Sugar ½ Cup Corn Syrup ¼ Cup Melted Butter 3 large Eggs 1 Cup Pecan Pieces plus 1/3 cup finely ground pieces. Enough Pecan Halves to decorate top to taste 1 9" inch pie shell INSTRUCTIONS (Do in exact order) (1) Break pecans into about ½ of a pecan half if not done.. (2) Beat eggs well. (3) Mix melted butter thoroughly into eggs. (4) Mix corn syrup thoroughly into eggs and better (5) Mix sugar thoroughly into above (6) Mix pecan pieces well into above. (7) Pour mixture into pecan shell (8) Smooth top being sure top is covered with pieces (9) Sprinkle finely ground pecans over pie to form a shelf for putting the full halves on to decorate top as wished. (10) Decorate top to taste. I use different patterns. Some are totally circular, some totally vertically. Some are various combinations. (I usually bake 8 each making, 4 each over shelf. (10) Cook 10 minutes in oven pre-heated to 400 degrees. (11) Reduce oven heat to 350 degrees. (11) Cook another 30-35 minutes. (12) Remove, let cool, and wrap each in tinfoil or saran wrap. Keep those eating now or giving away in fridge, the rest in freezer until needed. ENJOY