The program is obviously trying to emulate the Cash for Clunkers program, which helped stimulate the auto industry.  While I agree that Cash for Clunkers was a great idea, it was not without its faults.  Most notably, though it put people into new cars, it did nothing at all to make America more competitive on the global market.  What Cash for Clunkers did, essentially, was to tell the American people, “don’t worry about the recession; buy a new car!”  The day after buying their new car, however, Americans saw more unemployment, more banks failing, and more homes going into foreclosure.  It didn’t solve the real problem.  The money set aside for the Cash for Caulkers program will likely have the same effect:  it will make Americans spend money, but it won’t do anything to really end the recession we’re in.

As we’ve said before, to end this recession, we will need to rally all Americans behind a Manhattan type of project that creates a new set of technologies and propels our nation competitiveness on the world market.  Having our luxuries subsidized by the government or making our homes more energy efficient, sadly, do not fall into this category.  If we are going to put federal money towards solving America’s problems, then we need to be more wise about how we spend that money.

Do shop at non-grocery stores: Many of the big-box stores have been increasing their grocery offerings. Seems you can hardly turn on the TV without seeing an ad about money-saving groceries at Walmart, but I’ve found another big-box store with surprisingly good grocery deals; if you have a Big Lots store in your area, check out their grocery aisles. They offer name-brand breakfast cereals, as well as canned and snack-food items you may never have heard of. They’ve been a particularly good source of canned tomatoes, tomato sauce, and canned beans, at prices at least $.25 less than my typical grocery store. (It’s better to go in with an open mind rather than a set menu, though I found black-eyed peas there in time for New Year’s Day, which was a pleasant surprise).

Gas station mini-marts are also a surprising source for cheap staples: The one down the street from my house sells one-gallon jugs of 1% milk for $2.19 apiece, and one-dozen extra-large eggs for $1.99. These prices blow the doors off of my local Stop and Shop.

Don’t eschew the grocery outlets: If you have a grocery outlet near you, swallow your pride and cruise the aisles. When I was in grad school, I supported my lifestyle by shopping there for soup, rice mixes, and the world’s cheapest bottles of wine I’d ever consumed. Even now, my dad jokes that he goes there with a corkscrew, buys a few different bottles, and takes a swig of each in the parking lot, then goes in a buys a case of the ones he likes. At least, I think he’s joking…

Do check to see if ShortCut$ is available in your area: This is a program that lets you load coupons directly onto your grocery loyalty card. Talk about convenience!

Don’t waste money on the wrong expired products: If you’re shopping at a ”lower-end” discount food market, keep your eyes on the expiration dates. In my experience, the frozen-solid meats I’ve bought have all been fine, even if they’re months past their expiration dates. If you’re looking at bags of chips or other non-frozen foods, though, walk on by. Chips that are two months beyond their expiration will taste like, well, chips that are two months beyond their expiration date. Sadly, I learned this lesson the hard way. Also, if you’re shopping for canned goods, feel all around the can for dents or bulges, which could mean the food inside is spoiled.

Do investigate international food markets: Even if you’re not an adventurous gourmand, international food markets can be a terrific source of lower-cost produce, fish, and canned goods. Plus, it’s fun to look at some of the offerings and wonder just what the heck they are.

Do shop from the source: If you have a food-producing farm nearby, or live close to a farmers’ market, take advantage of that! Buying local can reap great prices on food that is often organic. Also, supporting local farmland helps to keep local farms in your area.

Don’t throw away food: Eat what you buy. If your meats are close to expiring, then cook them and freeze them for later use. This works particularly well with ground beef.

Do cook in large quantities: This is different from buying in bulk, though buying in bulk is certainly another way you can cut costs on your grocery bills. Rather, when you cook large quantities of freezable recipes, and then package it in individual- or family-size portions, you’re saving money on the nights when otherwise you’d order in because you were too busy to cook. If you don’t have a lot of freezer space, concentrate on soups — once your big pot of soup has cooled, you can store it flat in gallon-sized storage bags.

Finally, if you Don’t know how to cook: Learn. If you can read, you can follow a simple recipe. Cooking is a satisfying way to spend time, and if you’re cooking with a loved one, it can even be fun! Plus, it’s cheaper and healthier than eating in restaurants or ordering pizza.

Other money-saving grocery ideas? Tell me in the comments!

I first became aware of pet insurance when my kitten, Maxwell, got into a scrap and had to have his face drained (sorry, TMI). I never signed up for it, though. It just sounded like a hassle and I wasn’t convinced the benefits would outweigh my assumptions.

Let’s find out if I was wrong.

There are many different pet health-insurance companies but the most impressive one is  PetsHealth Care Plan by The Hartville Group. This company has been insuring pets since 1997, and established a partnership with the ASPCA in 2006. Almost more impressive than that, though, is the fact that my nothing-but-the-best, of-exacting-quality, fellow game-show-contestant (she won $16,000 on Millionaire and trained me for “Win Ben Stein’s Money”) soul-sister Becky Johnson Sabin has used the PetsHealth Care Plan for seven years now and “love love love[s] them.”

This is high praise from the world’s most trustworthy source. I asked her to elaborate.

“I pay $15.35 each month — which balances out to one pricey lunch or inexpensive dinner monthly — and it gives me the peace of mind that if something catastrophic happens with Ken, he is covered,” Sabin said. Her decision was particularly guided by the fact that “events with pets seem to happen in the middle of the night, over the weekend, or during a holiday, when vet care seems to cost twice or three times what it would usually cost.”

Sabin recently experienced this truism when her beloved Ken the Kat (namesake of Ken Jennings of “Jeopardy!” fame), ate something poisonous to cats.

“I’d put a bouquet of lilies up high, where he couldn’t reach them, but some petals dropped to the floor and he ate them,” Sabin said. It was the July 4th weekend and only the emergency vet was seeing patients.

“He was at the Mayo Clinic of pet hospitals,” Sabin explained.

Sabin paid the resultant $2,000 bill out-of-pocket and then submitted a claim for reimbursement. The PetsHealth Care Plan claim form is one-page long and can be submitted by fax, email, or postal mail. Care provided by any licensed veterinarian in the U.S. or Canada is covered, and the reimbursement is 80% after a $100 annual deduction per pet, though Sabin thinks her reimbursement for Ken’s July 4th incident was reimbursed at a lower percentage because the care was offered after-hours.

She figures she has paid $1250 in premiums, but she was reimbursed “between 60- to 80-percent of $2,000″ for one claim alone. Sabin has submitted other claims, too, and knows she has ended up more than ahead of her investment.

“Even though you have indoor pets, stuff still happens. They run around and have accidents just like humans do; I mean, I broke my foot walking through my living room.”

Interested in what it would cost to cover my own furry darling, I filled out the PetsHealth Care Plan questionnaire and learned it would cost $7.50/month for an accident-only insurance policy. Accident and Illness coverage with a Continuing-Care rider would set me back $18.06 monthly. For this “Level 2″ plan, the maximum annual benefit is $8,000; $1,500 per incident; and has a $100 annual deductible per pet. Not bad. The same plan, but without the Continuing Care rider, would cost me about $12 each month.

PetsHealth Care Plan offers four tiers of service that, for my cat, topped out at $58.21/monthly. I’m not sure that I’d need to pay that, but $7.50 a month to cover up to $2,500 of an accident doesn’t make pet insurance seem like such a hassle now, and it doesn’t surprise me that, once again, Becky Johnson Sabin is a fount of true knowledge.

The problem with financial products like the CDS or the CLX is, first and foremost, that it is unclear who covers the ‘bet.’ If financial collapse does happen, and Citibank is to make good on their CLXs, what guarantee is there that Citibank will be in a position, post-collapse, to honor its obligations?  And if it isn’t in a position to honor those obligations, who does?  What’s clear after the fallout of the CDS scandal is that the responsibility of paying off the debts of ‘too big to fail’ financial institutions inevitably falls on the American tax payer.

We understand the benefit afforded by these products to the economy.  A product that insures against collapse is attractive and useful, especially in an economy that is currently prone to collapse.  However, we have to also consider the problems that come  when these products are used as tools for financial speculation.  Credit Default Swaps work well for companies that want insurance against their collapse, but when you buy Credit Default Swaps to insure against the collapse of other companies, it becomes like buying life insurance on other people:  it is now in the best interest of the CDS owner for the other company to go under.  The product makes economic collapse more profitable than a healthy economy, and the damage caused is systemic.  The result, as we’re seeing now, is recession.

There are  two key ways to make these products safer.  First, all of these products should be traded on an open public exchange, which ensures that both parties have the money to cover their ‘bets’.  Secondly, these products should not be used for speculative purposes but only as vehicles for hedging legitimate business risks.

Citibank is trying to get backing for a financial product that sounds a little too much like the time bomb that blew up Wall Street in 2008.  Where are our politicians who are supposed to be protecting us from this kind of risk?  Why aren’t they bumping up regulation and taking banks to task? We own Citibank—shouldn’t our representatives on Capital Hill be in there telling them that this idea will not fly.  The problem with CDSs and products like them are problems that the politicians themselves created.  Ten years ago, these products were illegal (and obviously for good reason).  If politicians are going to allow them now, then they need to stop being intimidated by the banking industry, and put regulation into effect that will prevent further damage.  Their cowardice is allowing banks to continue practices that sent our country into this recession.

There are 5 types of changes:

1. A new account summary box to help you find the most important info at a glance: New Balance, Minimum Payment, Due Date.
2. Calculation of how long it would take to pay off balance if paying only minimum payments.
3. Clearly stated late payment warning to let you know what happens if your payment is late.
4. Two transaction columns on the 2nd page require less paper.
5. A separate section detailing fees and interest charged each month and early totals

Whether the bill passes or not, it’s unlikely to do much by way of solving the unemployment problem in this country because it’s built upon a faulty premise: that the reason employers aren’t hiring is because they can’t afford to pay social security taxes—which only amounts to about 6.2% of the employees paycheck.  The truth is that employers hire people because they need the help.  If there is no demand for their products, then they certainly don’t need more people to help them manage their dwindling operations.  To put it plainly, an incentive of 6.2% simply doesn’t address the problem of dried up demand.

To use an analogy, whoever thinks that the 6.2% tax break will create new jobs is like saying that business owners across the country are not investing on something that they need for their business that costs $30,000, but once the price drops to $28,140 they will then go ahead and make the investment. Sure there might be a few people on the margin that the tax break will help them make the decision to invest, but for everyone else the tax break is not big enough to encourage them to invest $28,140 on something that they do not see the demand for.

The likely recipients of this tax break, then, are those businesses and business owners who were already likely to hire new employees anyways.  Thus, the end result of the Job Bill is a predictable tax break for businesses that are already doing well, and very little help for businesses that are struggling or for the large number of Americans who are currently out of work.

The most optimistic estimates of the jobs bill’s impact speculate that it will create between 80,00-180,000 new jobs, hardly a dent in the population of 8.4 million unemployed Americans.  So, while Democrats and Republicans duke it out over whether they will let this legislature pass and in what form, the best case scenario is only a tiny change in unemployment.

Ultimately, this is just another example of our nation’s politicians’ inability to really address the problems the average person faces in this country.  They are trying to make new jobs with tax incentives when what we need are bold national projects that will put Americans to work.   We need a new industry to help us pull ourselves up from our boot straps.  If we had such a project, we wouldn’t need to worry about tax incentives to help put people to work—there would simply be work that needed to be done, and we’d have to hire people to do it.

Here is a quick summary of what you should know so that you can take full advantage of these pro-consumer changes:

Watch interest rates

The new rules will make it harder for credit card companies to raise a customer’s rates across the board. Under the so-called universal default practice, a consumer who was late on a payment for one credit card might have seen the interest rate rise on that card and another, unrelated credit card.

Be aware that interest rate hikes are going away using the first year an account is open and on existing balances. But card companies will still be able to raise interest rates in some cases, such as when you are more than 60 days late paying your bill or an introductory rate expires after six months.

Another huge exception: Issuers can raise your rate before the first 12 months is up if your rate is a variable one tied to an index and that index rises. These indexes are at historic lows, but when rates begin to rise to keep inflation at bay, so will your payments.

Watch over-limit fees

Another major change involves the fee charged when a consumer charges more than his or her credit limit. Until now, many card companies have allowed consumers to continue charging beyond set limits, tacking on sometimes hefty over-the-limit fees in the process. Cardholders will now have to “opt-in” for over-the-limit spending.

Payment Allocation

With the new rules, card issuers have to apply payments to the part of a bill with the higher interest rate. For example, if an account has a $5,000 balance with a regular rate of 15 percent, and a $5,000 balance at a promotional rate of 5 percent, the monthly payment must be applied first to the balance with the 15 percent rate.

Monthly Statements

Credit card statements will have to show how long it will take to pay off a credit card if only minimum payments are made. The statements will also have to show how a consumer may pay off the entire bill in 36 months if payments are increased.

Finally, if you are looking for more information you should also read our full analysis of the new credit card law.

If you do not feel like watching the full video, we’ve broken down the argument he offers during this interview into a few key bullet points:

• Stiglitz’s first point is that almost nothing has been done since the last disaster to reform the way Wall Street does business.  The practices that led to the recession are still allowed and so we can expect another disaster.
• We still have ‘too big to fail’ financial institutions which, because we will bail them out, are like one-sided bets:  if they make a risky investment and it pays off, they win, but if they lose, then it’s the taxpayers who lose because we’ll bail them out.  Moreover, these ‘too big to fail’ banks are now even worse competition for smaller banks since they get bailed out when they take bad risks, whereas a smaller bank at risk of failing cannot expect a government hand out.
• Our policy towards ‘too big to fail’ banks has forced us to slip into a moral hazard:  we’ll bale out everyone involved no matter what their responsibility for the problem.  So, the people running these institutions know that they can engage in risky behavior without having to take the repercussions personally.
• This most recent collapse wasn’t out of the ordinary:  it was not only predictable but it was predicted.  The banking industry would have taxpayers believe that the current recession is a “thousand year storm” but, in fact, it was the inevitable repercussion of bad banking practices and deregulation that had been causing damage to the global economic system for decades.
• The devastation was caused by our lax regulation which encouraged banks to engage in risky behavior.  Our regulation is still lax.
• In the short run, Stiglitz expects problems because the government hasn’t dealt with the last crisis effectively: we’re still seeing real estate problems and high risk speculation.
• In the longer term, in 3-7 years time, Stiglitz predicts that the incentives still  offered for excessive risk taking due to lax regulation will cause another collapse.
• What we need for effective reform is more transparency, better incentives for proper behavior, and the invocation of the Volker Rule to prevent conflicts of interest—no speculative trading by depository institutions.
• We also need to restrict high leverage trading (Credit Default Swaps).

So, economically, if you owned shares in a company that sold bottled water, you probably received a tidy return on your investment.

But was it worth it?

Water corporations privatize water supplies; these private utilities “charge an average of 30% more for water than public utilities,” according to Food and Water Watch.

Think you’re not affected by that? The National Association of Water Companies (NAWC), an organization that “represents all aspects of the private water service industry,” reports that “Every day nearly 73 million Americans – almost one in four — receive water service from a privately owned water utility or a municipal utility operating under a public-private partnership.” The organization’s Web site also states that “private water companies own nearly 16 percent of the nation’s community water systems.”

Are you paying more for a shower because your water utility has been privatized? Are privatized utilities more concerned about the safety of your water or the payoffs to their shareholders? Do you think that might be worth looking into?

Let’s table your tap for a moment — your tap being a source of cheap water, especially when you tote it with you in a reusable bottle — and focus more closely at the delivery of bottled-water products. According to Food and Water Watch, “bottled water production and transport uses as much as 2,000 times more energy than it takes to produce tap water.” Additionally, it takes “more than 17 million barrels of oil — enough to fuel 1 million cars for a year” to produce the plastic water bottles sold annually in the United States.

Looking for some even more horrifying statistics? “Nearly 86% of all empty plastic bottles end up in our landfills rivers, or oceans,” according to Food and Water Watch.

You’ve probably heard of the floating continent of plastic debris in the Pacific Ocean — here is a first-hand account from Transpac sailor Charles Moore, who says “estimating the debris at half a pound for every hundred square meters of sea surface… the weight of the debris was about 3 million tons, comparable to a year’s deposition at Puente Hills, Los Angeles’s largest landfill.” And that was 12 years ago, in 1998. Moore’s report, which was published in Natural History v.112, n.9, November 2003, includes a heartbreaking photo of a decomposed Laysan albatross: bottle caps and other plastic objects are visible in its stomach chamber.

Yes, bottled water is convenient. But at what cost? Are the economics of convenience more compelling than the economics of enough fuel for a million cars each year, of trashed oceans, of landfills overflowing with plastics that will never biodegrade, and oceans filled with plastic polymers that “are sponges for DDT, PCBs, and other oily pollutants”?

Compare the convenience aspect of bottled water with the Food and Water Watch report that pre-packaged water costs “$.89 to $8.26 per gallon, while tap water costs $.002 per gallon.”

From an economic standpoint, it’s hard to argue with that kind of cost savings. So, do you want to save money, resources, AND the environment? Stop buying bottled water. Today.

Instead, you can choose from 32 BPA-free, reusable water bottles as tested by the Good Housekeeping Research Institute. Their #1 choice, a 24-oz. bottle from Nalgene, costs $10.20.

And, if you put your ear to it, you can almost hear the Pacific Ocean marine life, thanking you for your wise choice.

This goes to show that one should never say “never.” Citibank has a cute little offer going, one that rewards account holders with a 4.07% annual rate of return, and rewards itself with a new base of no-risk credit card holders.

Citbank is marketing a 4.07% APY 18-month CD (max deposit $25,000), but to qualify you have to apply for the Citi® Secured MasterCard®, which has a $29 annual fee. According to the Web page, “Your credit card limit then becomes equal to the amount of money in your CD.” Citi reports your performance to the credit bureaus, and you earn a tidy yield on your balance. At the end of your 18-month term, you can apply for an unsecured Citi Platinum Select credit card.

The card’s appeal lies not only in its high-yield on a deposit, but the knowledge that if you have to make a transaction with the card, it’s with money you have already set aside.

If you want to close your CD before the end of 18 months, your interest to that point is posted to your account, but “your credit card account will be canceled and your CD will be applied against your outstanding credit balance” (courtesy Citibank).

Minimum deposit is $200 and this offer is available nationwide. I’m going to prognosticate that we’ll see every bank with a credit card division following in Citi’s footsteps, to gain a hold on it’s own base of won’t-run-out-on-us customers.

Disclosure: Some links point to CardHub.com, which is owned by the same parent company as this blog.

For a company like AIG, the issue is quite clear.  They would have failed had we not bailed them out.  As a result, we now own most of their company.  AIG clearly shouldn’t give their executives a bonus.  Moreover, as shareholders, we have every right to demand that those executives don’t get a bonus.  On the other hand, some banks didn’t need a bailout.  Capital One, for instance, was forced to take the government’s money so as to help stabilize the economic disaster.  Their cooperation helped conceal the real problem areas (i.e. Citibank and Bank of America), thus preventing investors from cutting and running on companies that desperately required the bailout to stay afloat.  Those banks which didn’t need the bailout repaid that money almost immediately and they shouldn’t be penalized.  If anything, they should be rewarded for helping the American economy stay afloat and for having a sustainable business model when, all around them, other giants of their industry were toppling.

Where the issue becomes less clear cut, I think, is with banks like Goldman Sachs which received an indirect bailout and were allowed to change their charter overnight.  Had AIG not been kept afloat, it could not have repaid its obligations to Goldman Sachs.  We can’t be sure what this would have meant, ultimately, for Goldman Sachs, whether they would have been in danger of bankruptcy or whether they could survive the default, but it is clear that by getting more than $13 Billion from AIG, the government indirectly helped the company to survive and flourish.  Should the government now have the right to restrict bonuses for Goldman Sachs?

I am of two minds about how to deal with those banks that benefited from the bailout without becoming publicly owned.  After all, one of the main complaints people make about the bailouts is that the government shouldn’t have interfered in the first place.  Businesses that fail, in a free market economy, ought to be allowed to fail—it’s simply not the government’s job to step in, change the “rules of the game”, and save them.  Part of me thinks that the same holds true now that things are improving—that the government should not step-in and once again change the “rules of the game” by creating laws specifically targeted to banks.

On the other hand, like most Americans, I think it’s an outrage when a company that would be in trouble had it not been for the government’s assistance pays out bonuses.  Professional incompetence should not be rewarded, especially when the money is earned through the public coffers.  Like many Americans, I too want justice for the near crippling of the American economy by these banks and their risky business decisions and I realize that this wrong cannot be righted without the government stepping-in, yet again, to change the “rules of the game” and get our money back from companies that received indirect bailouts.

Ultimately, the problem is difficult to solve since justice requires a new set of laws that will only be targeted to specific institutions…  I realize that it is a bit uncharacteristic of me to leave the discussion open ended like this, but there are strong arguments for both sides.  What do others think?

Surprisingly, your credit card account is not on the scammers’ most-wanted list. “Con artists are trying not to use credit cards [in their scams] because the charges can be reversed,” Weisbaum said.

According to Weisman, the biggest and most egregious financial scam going on right now is the counterfeit check or fake check scam, which is being utilized all over the place.

“Mystery shopper, prize scams, renting apartments and giving first-month deposit rebates, auction scams… whatever the scenario, it all boils down to: I send you a bogus check, you deposit it, you wire me back some money, and then the bank comes after you for the amount you wired to me,” Weisbaum said.

This scam is “huge” in the contest area, Weisbaum told me. Here’s how it works: You receive a notice and a check in the mail. The check is for, say $15,000, and the notice reads, “Congratulations, you’ve won the Publishers Clearing House or Reader’s Digest sweepstakes! This check is a partial payment. Deposit this check, mail us $10,000 to pay for handling/shipping/administrative fees, and your check for the balance of the sweepstakes award will arrive.”

So, you do those things — deposit the $15,000 check into your bank account, then turn around and send a personal check for $10,000 to the “sweepstakes” company — but then, three days later, you get a call from your bank. The $15,000 check you deposited was fraudulent. The $15,000 has been removed from your account, PLUS, now you owe the bank $10,000, to cover the check you sent to the sweepstakes company.

“The banks sue people to put the money back into their accounts, to cover the big check they just bounced,” Weisbaum said. “So, people are being doubly victimized.”

How can you stay safe from counterfeit check scams?

“You never ever ever have to wire back money if you win a contest,” Weisbaum said. If you get a notice that says you have to send money to a contest organization, chuck it in the trash, or contact your state’s attorney general’s office.

Also, look at the top of the check. If the notice is from “Publisher’s Clearing House,” but the top of the check says “Joe’s Plumbing, Cleveland, Ohio,” then that should be a big red flag to you.

“Con artists steal the routing number and account information from a legitimate business, so that a company like Joe’s Plumbing is victimized too. Because the routing number is legit, you can put the check in your account,” Weisbaum said.

It’s not until a little later that the bank will catch up. Plus, the good people at Joe’s Plumbing will get a bank notice of their own, telling them that they’ve been bouncing $15,000 checks all over the country.

What a mess.

Weisbaum is also concerned about the methods being used to get your personal information. Technology has made it easier for criminals to get what they want.

“On the computer, that’s the phishing scams: your account has just been shut down. Now, they’re simple doing text messages for things you’ve never heard of, like ‘We’re updating our computer, please submit your info.’ People continue to fall for these things.”

“Some of the bogus emails you receive aren’t anything but attempts to load spyware into your computer. Technology has made it so easy, there are huge international gangs that make their fortunes by ripping you off,” said Weisbaum.

Technology may make it easier, but the tried-and-true phone methods continue to work in the criminals’ favor. “You get a call from someone who says they’re with the fraud division, we’ve got a problem here, we need your PIN so we can track it down.” Weisbaum recently got a fraud-alert call from his own account – he verified it by finding out that yes, they already knew his information, and then he hung up and called them back by dialing the customer-support number listed on his bank statement.

“People have to remember: Your bank or credit-card company is never going to legitimately ask for your PIN number. People on the phone are also playing IRS agents, police officers, etc.” Weisbaum said. Vigilance is key!

Are scams more proliferate during tough economic times? Weisbaum doesn’t think so.

“I think scams are 24/7, every day of the year. The pitch may change a little bit; con artists will use whatever is in the news. During the good time of the ‘70s, it was oil wells in Texas. During bad economic times, they’ll say they can settle your outstanding debts. If it’s for a charity, like Haiti earthquake relief, they’ll rip off your sense of generosity,” he said.

The thing that surprises Weisbaum most, though, is the eagerness with which people respond to con artists.

“What never ceases to amaze is that people who are down on their luck will still manage to find $500 for someone who claims to get them out of trouble, because some charlatan says he has all the answers, for a cost.”

Many debt-consolidation experts fall into this category. Be watchful, and caveat emptor!

Gilt’s sales begin at noon EST daily and run for no more than 36 hours. They send a daily email to members — I usually get mine at 11:57 — announcing the brands and items for sale that day. In the few weeks I’ve been a member, they’ve offered goods from Vera Wang Collection, Judith Lieber, Rodanthe, American Apparel (really?), Marc by Marc Jacobs, and Alexander Wang.

A quick click from the sales email message and you’re at the Gilt site, browsing excellent photos of pretty items. Additional sales can be had at their sister sites Gilt FUSE (skews younger/edgier) and Gilt MAN. A new Gilt site, Jetsetter, offers travel bargains toward luxury locales. Your Gilt membership is valid at all four outlets.

On December 3, Gilt advertised a sale on Burberry shoes. Made in Italy with UK styling, it sounded like the brand would fit both my aesthetic and my hard-to-fit feet, so I ordered a pair. Zappos sold them for $395; my Gilt pair cost $128. I ordered a few less-expensive gifts for friends (hand mirrors, spa treatments) and a nailpolish set for myself. Frustrated by the five-item shopping-bag limit (though you may purchase and refill your bag to your budget’s content), I clicked “Buy.”

They’re not speedy with order fulfillment, though they warn you of that with each item you view. I received a shipment notice on Dec. 9, which also served the disappointing news that my edgy new nailpolishes were not available “due to an inventory error.” To rectify the error, Gilt refunded the polish purchase price to my credit card AND credited my Gilt account with $25. Not bad, considering that the nailpolishes only cost $22.

My shipment arrived a few days later and I opened it with scientific observation. The box had obviously been packed with great care, and everything arrived safely. On top of my purchases was a little gold-embossed-over-black memo, thanking me for my purchase and “signed” by the co-0wners.

As far as the merchandise was concerned: the makeup mirrors were even cuter than expected, the spa kit bigger than I thought it would be. And my new Burberry shoes? Perfection. Perfection at 31% of the retail price. Happy birthday to me!

Note, this is not a post about family budgets, but a post about national budgets.  America, like America’s households, needs to learn to get more done on less money.  Just as with those households, it is easy for the country to buy on credit, on the assumption that we can repay at some later date… far too easy in fact.  Very little will stand in the way of our nation going deeper into debt, but just as with a normal household, someone has to eventually pay the bill.  That money is not given to us—it comes with repercussions.  Our President seems to be operating in the same mode as his predecessor:  putting our nation into deeper and deeper debt so as to pay for all the projects that he wants to start or maintain.  Congress raised the federal deficit cap in February of 09, they raised it again this month, and are poised to raise it again next month as part of a larger economic bill, currently before the Senate.  Simply raising the amount of debt the federal government allows itself to accrue is easy enough to do.

It is far more difficult to do what American families are now doing, which is to make the budget stretch, to prioritize spending, and to make, ultimately, tough decisions about what stays, what goes, and what changes need to be made to make the system work with the amount of cash we now have.  President Obama plans to raise taxes to pay for his system, but even raising taxes is easy compared to the obvious difficulties of telling the government and the American people that we are going to have to make changes and to tighten our belts if we want to come out of this recession ahead of the game.  Part of the economic bill currently before Senate is a Pay-As-You-go option which will force Congress to cut spending in one area to increase it in another.  However, the bill is not yet law, so it remains to be seen what it does to actually curb the existing levels of spending.

Real change is going to have to come from instigating some unpopular policies.  If we think public health care is a priority for our nation, then the American rule governing lawsuits is going to have to go, patients are going to have to be made responsible for finding cost competitive health care , and medicare is going to have to get severely overhauled because, as it stands right now, it’s like having a medical credit card with the bills paid by the State.  We can have public health care, but making it fit into the nation’s budget means that the government is going to have to make some changes, tighten its belt, and live within its means.  The same is true of government spending in general.  If President Obama wants to fund his numerous projects then charge the various federal and state agencies to trim the fat.  The excesses of the government are significant.  Set a goal to cut a reasonable amount of waste and not some token number that fails to make a real difference in the budget.

The President needs to look to the American family as his guide.  We’d all like new houses, new cars, vacations in far away places, etc., but we’ve had to decide what is important to us, and figure out how to make our money work to pay for those things.  Perhaps we give up on the vacation far away for a respite closer to home.  Perhaps we let our car or our computer last a year or two longer before replacing it.  Maybe we eat out less.  We look for places where we can spend less, and try to identify expenses we can cut out altogether.  What we don’t do is keep living as if we had the same opportunities to make money as ten years ago, and take the difference out in debt.

Since the article was written the takeover of Cadbury by Kraft has been complicated by various developments, but the issues discussed by Sorkin still hold.  Sorkin used the proposed takeover as an opportunity to discuss the differences between the power of corporate governance in England and in America.  In the British system, shareholders have much more control over the future of their investments, while in the American system, much of the control of the company is ceded to a Board of Directors and so takeovers, like that of Cadbury by Kraft, generally require the Board’s blessing to move ahead.

While we applaud the journalistic integrity of Sorkin for presenting both sides of the debate with due reflection, we are of the opinion that the debate over whether a company ought to be controlled by its investors or its Board is, innately, dangerous in its implications.  What is really being discussed here is the viability of democracy.  While the discussion elucidated by Sorkin centers on, specifically, whether shareholders have the wherewithal to figure out how their company should be run, in a larger sense, the implication is whether  the average person has enough sense to be responsible for their own vote.

At Wallet Blog, our position has been that average people should be empowered to make decisions concerning their own welfare.  This includes the ability for them to take a position, by voting, on issues that will affect them fiscally.  This is true of national and state elections, and it should also be true for corporate decisions.  Otherwise, the implication is that the average person can’t be trusted to make decisions for themselves and that a “Board of Directors” of sorts is necessary for other decisions involving a vote.

The bottom line is this: if our country were run the way we allow our corporations to be run then we would have a dictatorship instead of a democracy.  A small group of powerful figures would decide national policy for the citizenry at large.  That’s what ”democracy” means under the American Board of Directors system.  We wouldn’t tolerate such a system for our government because we don’t believe it’s a viable way to run a country.  Why debate, then, whether it’s a viable way to run a corporation?  If we think that democracy is an acceptable way to pick our nation’s leadership, then it should be an acceptable way to run something less dire like the operations of an American company.

In discussing corporate governance, it’s all too easy to suggest that we are embracing a different set of values for a particular situation, but the fact of the matter is that if we believe in democracy, we ought to advocate for its merits whenever possible, and we should, likewise, protest anti-democratic principles as a matter of course.   The British system isn’t just different from our own, it’s more democratic, and it might, perhaps, serve as a model for America to revamp its own Board of Directors system which is ultimately run from the top down against the very democratic principles upon which our nation was founded.