As I prognosticated before the bill was even signed into law, many carmakers have jumped onto the Cash-for-Clunkers bandwagon and are offering additional incentives.  It definitely pays to do a bit of research at your local dealerships to see if you can qualify for additional trade-in cash or special financing. (But do it quick, because unless Congress extends the program, it could be over as soon as this weekend, according to White House press secretary Robert Gibbs). In the meanwhile, read on for a rundown of  offers from major auto companies.

Under the Car Allowance Rebate System (CARS) program, the lease period for new vehicles must be at least five years. As such, Toyota has created special five-year leases specifically for the CARS program. Sixty-month leases are in place for the Camry, Corolla, RAV4, Tacoma, and Yaris models. To find the special offers available near you, visit Buy A Toyota and type your Zip code into the “Special Offers” box in the lower left-hand corner.

The pending health care plan being debated currently in Congress lacks, according to  the director of the Congressional Budget Office, Douglas Elmendorf “the sort of fundamental changes that would be necessary to reduce the trajectory of federal health spending by a significant amount.”

Elmensdorf is not alone.  The previous Secretary of Health and Human Services (Mike Leavitt) and the head of a Medicare advisory commission (Glenn Hackbarth) have both said that the plan does nothing to stop the escalation of health care costs which, once under the jurisdiction of the government, will cause a massive budget deficit which will, eventually, be passed on to the tax payers.

Have you visited the Web site Restaurant.com? It lets you search for participating restaurants by Zip code or region, offers descriptions and menus of the restaurants you’re interested in, and then you can purchase gift certificates online and print them from your computer for immediate use.

The gift certificates can be purchased in different denominations, at a steep discount. Right now, they’re offering $10 gift certificates for $4, and $25 gift certificates for $10 apiece. This is a pretty good deal, but it’s about to get sweeter: I’ve found a secret promotional code that lets you buy a $25 gift certificate for TWO DOLLARS. And there doesn’t seem to be a limit to the number of certificates you purchase!

According to the Federal Reserve, the credit card charge-off rate for the first quarter of 2009 jumped over 80% to a record 7.51% – meaning that the balance on roughly 1 out of every 13 credit cards is in default.  Additionally, in May, the number of bankruptcy filings reached 6,020 a day, which represents a 33% increase from a year earlier.  To address the concerns of the multitude of consumers facing these challenges, CardHub.com, the leading and most robust online credit card marketplace, today announced the addition of a Credit Card Debt Center to its site.  Launched in July 2008, Card Hub continues to revolutionize the consumer selection process for products and services in the personal finance space.

The Credit Card Debt Center includes two key features: Debt Help that provides consumers with customized debt management advice and Debt Education that offers an in depth understanding of the pros and cons of various debt solution options.  Highlights of these features include:

Our country’s economy has been operating from bubble to bubble.  From 1996 until 2000, we were in a tech bubble.  Our faith in the financial potential of the dot com industry was boundless, though it ultimately proved ill placed.  From 2000 until 2006, we were in a housing bubble which, when it burst, laid the foundations for the current recession.  During these periods, the country placed its economic hopes on new, seemingly plentiful, frontiers that promised new means by which to make money.  Older values were made to seem, by comparison, out of touch and out of date.  As a result, we, as a nation, allowed ourselves to slip further and further away from the fundamentals necessary for a healthy economy.

Now, we stand on a precipice.  We could create another of these economic bubbles to put our financial hopes into – an option as illusory as ever – or we could find some way to return to the fundamentals that have, historically, made our nation’s economy strong.  Over the last decade, we allowed our exports to slip and made our economy deeply reliant on imports from the rest of the world.  We have let the trade deficit grow too wide without finding new products or new technologies to export, and as a result have found ourselves without a significant industry to insure future success in the global economy.

Here’s what happened recently in California.  First, some basics:  in order for taxes to be increased in California the citizens of the state have to vote.  Without support, the government cannot simply raise taxes.

Recently, five propositions came up for raising taxes in California to help cover the costs of that state’s ridiculous budget problems.  All five were shot down with something close to a two-to-one margin.  The state government wanted more money, and the people refused to give it to them.  Their answer?  Cut spending, balance the budget, and trim waste.  For Californians, the reasoning was obvious:  why should they foot the bill for a government that refuses to spend within its means?

The Social Security Administration (SSA), in an effort to deal with the stress of their jobs, held a conference a couple of weeks ago in Phoenix Arizona during which 700 SSA directors relaxed to the bill of $700,000 worth of tax payers’ money.  They had dance troops.  They stayed at a nice hotel.  They even had an excursion to a local casino.

Three things:

According to realtytrac.com, 300,000 homes went into foreclosure last month.  Bloomberg reports that the U.S. delinquency rate rose to 9.4% and foreclosures rose to 1.37%.  According to Moody’s Investor Service, 42 percent of outstanding 2006-vintage subprime loans are at least 60 days delinquent, in foreclosure, or held for sale.  As we all know, the housing crisis and rising unemployment rates have served to make it difficult for many Americans to pay their mortgages on time, and the result is that many of the nation’s home owners are in dire straights.  The problem is bad, and banks need to change the way they modify mortgages if they hope to provide adequate assistance.  They are now concentrating on fixing disasters as they arise rather than preventing them in the first place.

With so many people in financial trouble, mortgage lenders like Bank of America, Wells Fargo, Wachovia, Chase, and Citigroup are finding themselves too understaffed to deal with these excessive defaults.  Given that a bank only has so many resources to extend to their borrowers, the dilemma becomes who to work with first.  Basically, the bank has to perform a kind of triage, like in a hospital, to determine which of their clients demands immediate attention, and which clients can wait.  The lender faces different kinds of repayment problems.  Specifically, they have people who cannot repay and who are defaulting right now, and people who have done everything in their power to repay (tapped into savings, changed their lifestyle, etc.) but who cannot sustain their payments any longer; they have not defaulted yet but soon they will.  According to a survey by ProPublica, it seems that most major lenders have been focusing on borrowers who are most delinquent at the expense of borrowers that are current but will quickly become delinquent unless they get help.

Spoiler: yes! Yes! YES! Longer Answer: Yes indeed.

I purchased a farm share in early May (and wrote about it on Wallet Blog on May 11th). My main motivation was twofold: helping local farmers while encouraging my family to eat better. For $15.38 a week, I would receive one small box of mostly local vegetables, which I’d pick up at the Tuesday afternoon farmers’ market in my city.

My point, in the past, has been that if America had allowed AIG to go into prepackaged bankruptcy, as we are doing with Chrysler and GM, we would have been in a better position to deal with the money AIG owes through Credit Default Swaps (CDS) because we could have negotiated payback for those positioned to collect on AIG’s obligations.  AIG owed money, we bailed them out to save the economy, and the result is that AIG paid off a lot of its obligations, and we, as taxpayers, now own billions of dollars of nearly worthless AIG stock. 

For the ones that are still not convinced, let us look at Goldman Sachs and its position concerning AIG.  AIG  paid out $13 billion bailout money to cover its CDS obligations to Goldman Sachs.  Actually, taxpayers paid Goldman Sachs, AIG just acted as a conduit.  The $13 billion was incredibly good for Goldman Sachs whose stock has since risen, but not nearly as good for AIG whose stock is perpetually on the verge of tanking.  However, the major problem here is that taxpayers paid AIG to pay off Goldman Sachs.  The result is that taxpayers own AIG stock (on the verge of collapse), and own no stock in Goldman Sachs (which is on the road to recovery).  Moreover, because CDSs are still unregulated, Goldman Sachs stands to make about $30 billion if AIG does, eventually, go bankrupt because of the CDSs they’ve taken out on that eventuality.  It is possible that other companies have similar CDSs bought against AIG, but since, remarkably, there still is no system of market regulation set up for CDSs, we can’t know for sure.

The Federal Trade Commission (FTC) has recently begun plans to regulate blogger endorsements on the internet, a forum where one can find opinions and endorsements in abundance.  In particular, the FTC wants to regulate bloggers who offer endorsements of products but who do not reveal that they are receiving compensation for their opinions.  Basically, bloggers who get paid to review a product (or to flat out endorse it) will have to say so up front.

It’s clear that the FTC is attempting to institute rules that will regulate the practices of the mostly untamed blogosphere (the internet environment made up of casual and professional bloggers) and it is being met with mixed reactions.  Some bloggers scoff at the idea that if they mention a product they have used and liked that they will suddenly come under a federal investigation.  Other bloggers (like Wallet Blog), however, see the FTC’s plan as a reasonable and necessary step towards introducing accountability in what has, thus far, proven a fairly frivolous media. 

Want to save 40 to 80 percent of the cost of a domestic Total Knee Replacement, heart procedure, plastic surgery, or another, typically high-cost medical procedure?  You might look into medical travel, which can save you up to 80 percent of the typical costs for an equivalent procedure in the United States.

“If the procedure you’re considering costs more than $6,000 in the United States, it might be worthwhile and money-saving for you to evaluate a medical travel option,” said Patrick Marsek, Managing Director of MedRetreat and co-author of “The Complete Idiot’s Guide to Medical Tourism.”

Because of the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act of 2009, the process of getting a credit card is going to drastically change for people under 21 years of age.  Starting on February of 2010, people under 21 will not be allowed to get a credit card without a co-signer or proof that they can repay their credit card debt.  At Wallet Blog we have already made it clear that this part of the credit card law is completely unfair and ridiculous as it singles out people under 21 years of age for special treatment, even though they are legally adults.  

No matter what politicians decide, credit history is going to continue being a critical factor in determining loan amounts and loan interest rates (as it should be).  However, since it is now harder for people under 21 to get credit cards, they will have less time to build up their credit history and will be at a disadvantage for anything that requires a credit check (like getting a loan or even renting an apartment).

As the nation’s lawmakers make decisions about healthcare reform, we ought to keep in mind the danger of fixing a system without understanding how it  became broken in the first place.  Among nations with comparable average lifespans, Americans pay more for healthcare than does anyone else in the world.   The system is grossly overpriced, because it has structural problems which need to be acknowledged before they can be fixed.  One such problem is the American Rule in lawsuits.

The American Rule  requires that, even if someone wins a lawsuit, they remain responsible for their legal fees.  This means that if someone brings a lawsuit against you, though you may have done nothing wrong, you still have to pay for your defense.  In general, the American Rule encourages a kind of legalized bullying since the system does not provide incentive to avoid starting a lawsuit, and actually encourages frivolous legal action.

There has been a lot of talk about healthcare in the news recently, especially in regards to its reform.  For the most part, these discussions center around coverage: who pays for it, who will get it and what that means for those who do?  What seems to be missing from the discussion is an acknowledgment that a system that doesn’t hold the recipient at least partially responsible for the financial burden of their medical expenses is likely to fail. 

The problem with America’s current system is evident with one look at its global performance.  Though life expectancy is about the same in France, Sweden, the United Kingdom and the United States, the price of healthcare (as a percentage of Gross Domestic Products) varies greatly.   According to the World Health Organization’s 2009 report, the U.S. pays over 15%, whereas France pays 11.2%, Sweden 9.2% and the United Kingdom 8.2%.  We are paying more for what is essentially the same level of healthcare because our system encourages inflated costs.

In late June President Obama signed into law the “Car Allowance Rebate System” or (CARS) or as it’s also known: “Cash for Clunkers.” This is a program that encourages people to trade in their cars for more efficient models.  It also helps to stimulate the economy (similar to the first time home buyer tax credit) at a time when car sales are lagging. The program runs from July 1st through November 1st 2009. Cars traded in during that time could be eligible for a credit of either $3,500 or $4,500 depending on the car and the increase in mileage the new vehicle provides.

Today, I received an email from the California Society of CPAs that provides a lot of valuable information in regards to the steps consumers can take to participate in the new program:

If you’re eager to get rid of some of your unwanted items/wedding gifts/whatever, Amazon is one of many companies that will allow you to hold an online tag sale. One way to do this is to sell directly on Amazon.com, but another option, particularly if your items are books, videos, music, or video games, is to use Amazon’s Easy Sell with Fulfillment by Amazon. The programs are quite different from one another.

When you sell directly on Amazon.com, you will be notified when an item has sold, but you have to mail it yourself.  The company gives you a $3.99 shipping credit and takes a small fee. This is the option to choose if you’re really looking to make money, though it takes more time because you need to pack and ship the item yourself, which can be a pain if you are selling a large amount of items.

This recession has been characterized by the presence of companies that are so vast and influential that their failure actually endangers the American economy.  The names of these companies, GM, Chrysler, AIG, Citibank, Bank of America, and so on, are all too familiar to us from their prominent place in news stories about economic disaster.  In order to prevent systemic economic collapse, America has resorted to bailouts and political bankruptcy,  essentially changing the “rules of the game” in order not to have these failing companies take our economy down with them.  What is clear is that the benefits reaped by the economy in allowing the existence of these financial giants is nothing as compared to the damage caused by their collapse.  Companies that are too big to fail should simply not be allowed to exist.

We should remember that capitalism is based on free market principles in which companies compete with each other.  If one fails, other and presumably better companies take its place.  Thus, the market evolves so as to better meet consumer demands.  Companies fail in a free market economy because they are unable to compete with stronger business models.  Moreover, they should be allowed to fail in these circumstances so that better business models can take their market share.