Editor`s Rant - Prosperity, Terrorism & the Nov. 7th Election

The campaign season ends this Tuesday on November 7, 2006. Thank God! The politicking is driving me crazy but if you`re serious about building wealth and ensuring greater prosperity, you have to watch very closely. I have no idea who will control Congress but I can only hope that the next Congress will do things such as…

1.       Control or shrink the size of the federal government (Yes…this is a pipedream)

2.       Maintain and/or make permanent the recently enacted tax cuts (I`m keeping my fingers crossed).

3.       Continue a strong stance against terrorism (more crossed fingers).

4.       Enact no more intrusive legislation regarding our lives and our businesses. (I think my eyes are also crossed by now).

Items number 1, 2 & 4 directly relate to your prosperity. Item #3 may seem out of place in this newsletter but I assure you that it will affect your prosperity. More importantly, it may affect your life and lifestyle in an adverse way.

The Iraq war, the general middle east situation and the worldwide war with terrorism is a hotly debated controversy in our country. I hear and read all the rhetoric on both sides and it is quite disconcerting. As a country, we are not united against terrorism and we are not focusing on how grave a situation it really is. We need to know what we are dealing with. We need to know what we are facing and what danger is facing us. There are two things that I want you to read and share with the people that you love. Please visit the following:

1)       The website www.thereligionofpeace.com.

2)       Read the September 2006 issue of Imprimus (from www.hillsdale.edu) at http://www.hillsdale.edu/imprimis/2006/09/

Both of them offer a compelling and disturbing view of what we are facing. Whether we stay in Iraq or not, whether we are unified or not, we have enemies that will not stop until we are dead. As husband and a father of two small boys, this is a very serious concern to me. I hope it is to you and to everyone on the political landscape this election season. To hell with popularity! We must do the right thing. Vote accordingly. Enough said!

I wish all of you and your loved ones the blessings of safety and prosperity.

Financial Vortex 2006
December 2-3, 2006
Profit from the coming Megatrends & Meltdowns

Dear Fellow Wealth-Builder,

Let me tell you the best money-making tip that you`ll hear this year

Attend the 2^nd annual Financial Vortex on December 2 & 3, 2006. The speakers and strategies that you will encounter will turbo-charge your wealth-building prospects.

If you don`t believe me, ask any serious attendee from the last year`s Financial Vortex. Many have told me that Financial Vortex had a powerful impact on their bottom lines.

Here are some specific forecasts from that first annual event

Because of these profitable warnings & forecasts, attendees made great money. They gave us comments such as

I created last year`s event because I wanted to alert people to not only how to profit from what is unfolding with the economy & financial markets, but more importantly how to protect yourself from the problems that are growing and becoming unavoidable. 18 months later, the problems become more imposing

What happens when one or more of these issues erupts into a economic catastrophe? What will happen to the country`s economic health? How about YOUR economic health?

It is inevitable that many of these problems will have a severe impact. Will they affect YOU? Directly or indirectly, they will. It is better to prepare now. Those that are prepared and make some simple changes to their financial picture will not only be able to avoid problemsbut also profit from them. How about you? The Vortex is the best place to start preparing for what will unfold in the months and years to come.

Last year`s Vortex was a great event and a hard act to follow. Until now! I am thrilled with the agenda this year. We have the good fortune of getting many of last year`s speakers back and we have some new ones that`ll knock your socks off!! Look at this fantastic line-up

         JAY TAYLOR : The keynote speaker. He`s a world-class analyst and commentator giving us his profitable insights on the markets

         PETER GRANDICH : A top-notch market pro known for his stellar forecasting record with gold and related markets

         ROGER WIEGAND : A widely read market analyst with his surprising views on silver and what he expects for 2007

         DAVID CORSI : A crowd favorite from last year, David will tell us about real estate`s prospects for 2007 as the housing bubble continues to deflate

         PAUL MAMPILLY : The Founder of Capuchinomics and a true hedge fund pro that will tell us what the economy may hold for us next year

         NOEL JAMESON : A long-time market veteran will present us with money-making strategies you can use with Exchange Traded Funds (ETFs)

         CHARLES NEDOSS : Chicago`s finest futures broker comes back with some wealth-building strategies you can use in the coming months with futures.

I invited these pros to speak at the 2^nd annual Financial Vortex because they are among the best at what they do. They are "class acts" and they know the markets and the dynamics that drive them. In addition, I have tremendous admiration and respect for their abilities, their knowledge and their integrity. To have all of them in one place and at the same time is priceless. Think about itfor the cost of a New York dinner, you get a valuable education in just one day that could make you a fortune in 2007 and beyond!

FREE BONUS #1: All attendees will get the proprietary Financial Vortex CD. It is loaded with financial information and educational audio which includes a mini-seminar on wealth-building from Paul Mladjenovic, the Financial Vortex event creator.

FREE BONUS #2: This bonus is only available until November 26, 2006: All attendees that register with the Financial Vortex by November 26^th will get one free pass to Sunday December 3^rd`s Business Vortex! The Business Vortex will show you ways to make money with your own home business (part-time or full-time) in today`s economy. Separately, the admission price for the Business Vortex is $49.

Financial Vortex - the details:
Event name: Financial Vortex
Date: Saturday, December 2, 2006
Time: 10:00am : 5:00pm (includes 1 hour for lunch)
Place: Holiday Inn, Route 4 East, Fort Lee, NJ
Cost: $195 per person (the Business Vortex is an additional $49).
For couples, the second person can attend at half price.

To register, call us at 201-585-0239 or email us at paul@mladjenovic.com.
Or fill out the following coupon and mail it (by November 20, 2006) to:
Prosperity Network, Box 1883, Fort Lee, NJ 07024

----------------coupon --------------------------------------------

__ Yes! I want to attend The Vortex on Dec. 2-3, 2006. I am paying

__$195 per person for Financial Vortex (Dec. 2)

__$49 per person for Business Vortex (Dec. 3)

(For couples, the 2^nd person can come at half price)

(Full registration details will be sent back via email)

Total payment is $______

I am paying by

__Cash     __Check    __Visa    __Mastercard  __Amex  __Discover

Card#_______________________________________  Exp. Date______

Authorize with signature > _____________________________________

Print:

Name(s) __________________________________________

Address___________________________________________

City__________________________ State______ Zip _________

Day telephone# __________________________________

Email: ______________________________________________

Thank you! If you have any questions, feel free to call us at 201-585-0239.

Economic Warning from the Comptroller General of the United States:

The following is an excerpt from a speech entitled "America At a crossroads" by the Comptroller General of the United States (October 23, 2006. The full text of the speech can be found at www.gao.gov). It is a government document in the public domain so no permission is necessary to reprint it.

America`s Fiscal Outlook:

All of the challenges I`ve discussed are important, but arguably the most urgent challenge overall today is America`s deteriorating financial condition and fiscal outlook.

Our fiscal challenge overarches every major public policy spending and tax issue. In my view, America now faces not one but four interrelated deficits. These deficits have serious implications for our role in the world, our future standard of living, nd even our long-term national security.

The first deficit is the federal budget deficit. As you probably know, federal budget deficits have reappeared in recent years. It`s no mystery why: Spending is out of control, and we`ve seen a series of major tax cuts. While this year`s deficit was lower than last year`s, it`s premature to start rejoicing. Our unified and operating budget deficits are still imprudently high given our approaching demographic tsunami of spending. And both the Office of Management and Budget (OMB) and the Congressional Budget Office (CBO) have predicted next year`s deficit will rise sharply.

But the short-term deficit isn`t our primary challenge. Instead, it`s the federal government`s increasing liabilities and unfunded commitments that are the real problem. I`m talking about things like the growing unfunded commitments for Social Security and Medicare. In fact, the estimated total U.S. fiscal burden has soared from about $20 trillion in 2000 to about $46 trillion in 2005. This burden is growing at the rate of at least $2 trillion to $3 trillion each year.

The $46 trillion figure translates into an IOU of about $411,000 per American household. Keep in mind that in 2005 the average annual household income in this country was only about $45,000.

By 2040, to close our fiscal gap, our government will have to raise taxes through the roof or slash many federal programs the American people now take for granted. In reality, the impact will be felt long before 2040. Independent sector organizations, such as those you represent or support, may well be faced with the prospect of taking up a good deal of the slack.

The second deficit is our savings deficit. The savings rate for U.S. consumers has been falling for some time. In calendar year 2005, for the first time since 1933, the annual personal savings rate in the United States sank to negative territory. Think about it. We`ve returned to savings levels not seen since the depths of the reat

Depression. America now has the lowest overall savings rate of any major industrialized nation.

Clearly, many Americans, like the federal government, are living beyond their means. Too many of our friends, family, members, and neighbors are living for today and not preparing for tomorrow. This trend is particularly alarming in an aging society such as our own. Obviously, those Americans who save more will live better in retirement. And given the problems plaguing our public and private retirement systems, personal investments are becoming even more important to a person`s retirement security planning.

The third deficit is our country`s balance-of-payments deficit. America is simply spending more than it`s producing. In 2005, our trade deficit hit $726 billion, up more than $100 billion from a year earlier.

Finally, there`s our fourth deficit, and it`s probably the most serious and sobering deficit of all. What I`m talking about here is America`s leadership deficit.

At both ends of Pennsylvania Avenue and on both sides of the political aisle, we need more individuals who have the courage to speak the truth, no matter how unpleasant that message may be. We need more individuals who are prepared to challenge the status quo, work together, and forge consensus for real and lasting hange. We need more individuals who are willing to make tough choices that are in the long- term interests of our nation and its citizens.

Unfortunately, not enough key policymakers are concerned about America`s growing fiscal imbalance and the other long-term challenges I`ve mentioned. Calls for real reform or shared sacrifice have been few and far between. So far, we`ve heard far too much rhetoric and seen far too few results.

What we`ve got going here are the elements of a perfect storm, a potent mix of ignorance, apathy, and inaction throughout large parts of American society. Our current indifference to fiscal discipline and these other major challenges can`t continue. If it does, a crisis isn`t a matter of "if" but "when" and how bad.

Great Quotes (Oct 2006):

"The first-born baby boomers are turning 60 this year, and they and their little brothers and sisters will soon have their hands out for the Social Security and Medicare entitlements they`ve been promised. But the boomers represent an extraordinary bulge in the age profile of the U.S. population. The bulge means that the share of the population receiving government retirement benefits will grow, while the share of the population paying for them will shrink. To paper over this gross imbalance and still keep the entitlement checks going out, deficits will have to increase at a stupendous rate—and the engine of monetary creation will have to ramp up to entirely new and increasingly dangerous levels." Doug Casey

"The urge to save humanity is almost always only a false-face for the urge to rule it." H.I. Mencken

"The many woes that afflict our nation are rooted in the morally bankrupt paradigms of socialism, interventionism, and empire that have held our nation in their grip for decades and that the only real solution to such woes is libertarianism." .Jacob G. Hornberger (www.fff.org)

"Most of the people in the upper income brackets are not rich and do not have wealth sheltered offshore. They are typically working people who have finally reached their peak earning years after many years of far more modest incomes : and now see much of what they have worked for siphoned off by politicians, to the accompaniment of lofty rhetoric." .Thomas Sowell

Social Security : Guest commentary from Lisa Scrivanich, financial analyst

The following piece was written by Lisa Scrivanich, a junior financial analyst that is majoring in finance at Ramapo college. She interned with my firm this past summer and she is sharing some of her research on retirement & Social Security here:

The problem with Social Security for future retirees

Retirement for today`s baby boomers has a much different future than generations past. Only a generation ago, individuals counted on Social Security as a major source of their retirement income. However, under the current system, Social Security will begin to run a deficit that will only grow with each passing year. It will be impossible to maintain current benefits and tax rates if the program continues as it has been. The problem with Social Security lies in the pay-as-you-go system. When Social Security taxes are deducted, the current generation is not saving for themselves, but rather their money is going towards current retirees. When the system was created there were 16 workers contributing for every one retiree. Presently, there are only 3.3 workers contributing to each retiree. In 2008, baby boomers will begin to retire and by 2030 the number of retirement age individuals will double to 70 million. The ratio of workers to retirees will further narrow, and in the coming years there will be only two workers contributing for each retiree.  The system is very dependent on how many people are currently working and how many are retired.

There are three central methods to solve the Social Security deficit that is looming in the near future. The first would see a significant increase in payroll taxes. Another option would be to cut benefits. The government could also use revenues from other areas to assist the Social Security program. The last major option is for people to privately invest part of their Social Security taxes. We could see one or a combination of the above measures implemented. Any changes made will severely affect younger generations. Benefits will be dramatically slashed or possibly eliminated altogether. The Supreme Court ruled in Flemming v. Nestor there is no legal right to Social Security benefits. However, the government has assured those individuals already retired as well as anyone age 55 or older will not see any change in their benefits. Yet for all those under age 55, there is no longer a guarantee what retirement will look like. It is imperative to continue, or perhaps begin, to save for retirement outside the means of government programs.

You`ll meet Lisa at the Financial Vortex since retirement planning will be covered that day.

Prospering from the real estate bubble by David Corsi

Over the past few years the talk has been that the heated real estate market was due for a slowdown and possible bursting of the bubble. In the last 6 years real estate (from raw land to large commercial properties) prices have risen significantly, appreciating at approximately 14% per year. thereby prices have doubled.

Recent data seems to be bearing out the slowing of the real estate market. Housing starts are down significantly while the number of unsold houses has risen dramatically.

As all experienced investors know, what goes up will come down. A correction was inevitable and necessary. The real question is how far the downturn will be. It can range from the "soft landing" scenario (demand softens and the prices stay flat or take a slight dip) to a big drop in prices and demand along the lines of the Texas real estate down turn in the late 1980`s, (50% or more).

Last year an article in "Fortune Magazine" titled "Real Estate Gold Rush" told the story of several real estate "investors". The one thing that can be determined from this article is that the greater fool theory is alive and well. These "investors" all believe that the properties will continue to go up unabated. One investor casually mentioned that he was running a negative cash flow of $3,500 per month, of which he was not concerned, as he "is in it for the appreciation". Well the appreciation has stopped and all indications are it will be heading downward. By how much is anyone`s guess at this point. Below we will look at the indicators that will determine the size and scope of the correction.  Incidentally, the folks mentioned in the article are not "investors" but "speculators". There is a world of difference between the two.

What follows is a list of factors that will go a long way towards determining what type of correction occurs.

1. The Appreciation Factor : With the huge surge in appreciation, the chance of a large drop in prices as the market softens becomes greater. Over the past several years` properties in many areas of the nation have doubled and in some cases nearly tripled in value. This is not realistic or sustainable. Sooner or later the affordability factor will have to kick in. This is what is happening now.

2. Interest Rates  - As the Fed raises interest rates, fewer people will be able to afford to purchase a home. This decline in demand will cause prices to stabilize and begin a downhill descent.

3. The Overall Economy : If the economy (either local, state or national) softens, which can be due to anything from the Feds over tightening credit, to a rise in unemployment, a local decline in industry, natural disaster, etc. Even though interest rates are still low by historical standards, the huge price tag on even entry-level homes, has led to an extremely low affordability rates. In California, less than one in five potential homebuyers can afford the median priced home. The national mortgage default rate has been climbing steadily over the past few years.

4. Easy Money : As the Feds tighten credit, many borrowers are already over-extended. A large percentage of borrowers have opted for "minimum pmt, interest only and adjustable rate loans. Many of these loans will leave the borrower with no loan pay down and/or negative amortization. Negative amortization occurs when the borrower makes a monthly payment that is below what the payment should be. The difference between the minimum payment and what the payment should be is added to the principal, leaving the borrower owing more than they initially borrowed. To illustrate: assume the loan is for $100,000 @ 6% for 30 years. The monthly payment should be $600. However the borrower opts for the minimum payment option of $400 per month leaving a shortage of $200 per month. At the end of 10 years borrower would owe $124,000, $24,000 more than they initially borrowed. This is just one illustration. If rates rise dramatically, borrowers with low teaser rate adjustable loans will also be in for a very unpleasant surprise. If this happens property values will not be able to be sustained and will decline.

5. The Mortgage Broker : As interest rates rise, mortgage lenders have kept the mortgage interest rates from rising in a parallel sequence. The mortgage industry has been reducing their profit margins to keep the demand for mortgages strong. As the Feds raised rates, mortgage brokers lowered their mark up to remain competitive. Because of this their earnings are declining and as mentioned above they are tightening up their underwriting standards. I would suggest keeping a close eye on the financial reports coming out of the biggest players in the mortgage game, namely Washington Mutual, Countrywide as well as Fannie Mae and Freddie Mac. If you see their fortunes dampen, you can be sure it will be an industry wide problem. When mortgage companies can no longer absorb these rate increases, their charges will increase, thereby dampening affordability and demand for homes.

6. Government Intervention : Last but not least, how the government (at all levels, particularly the State and Federal) reacts to the correction will go a long way in determining how long the downturn will last. Politicians are notorious for overstepping. Will they create another "RTC"? Will they start pressuring the Fed to lower interest rates? This may have the effect of the financiers of US debt moving their money to other alternatives, which will lead to huge tax increases. In turn, tax increases will lead to decreased economic activity and rising unemployment.

The combination and the interplay of the above factors will determine how strong the correction is. Wise investors should keep a close eye on these factors so they will be able to weather and profit from the downturn. Foolish investors will be bitterly disappointed. As the market softens opportunities will abound for the astute real estate investor. 

At the Financial Vortex Conference we will discuss how to take advantage of these opportunities in a safe way. There will not be any rags to rich tales, but solid practical information that beginning and experienced investors will be able to profit from. Topics will include:

* The Three Stages of a Real Estate Correction and How to Profit From Them

*Distress Sale Strategies
*Investing vs. Speculating
*Finding the Money to Fund Your Deals
*Landlording the Right Way
*Creative Financing
*And Much More
Hope to see you there.

David Corsi is a full time investor with 23 years experience. He is the past president of "The Metropolitan Real Estate Investors Association" and co-Hosted a call in radio show "Let`s Talk Real Estate" in the 1990`s. He will be a featured speaker at the Financial Vortex conference coming Dec. 2.

The following article is by my favorite real estate expert, David Corsi. See him at the Vortex next month:

TED BUTLER COMMENTARY
October 31, 2006
A Red Flag?

(This essay was written by silver analyst Theodore Butler, an independent consultant. Investment Rarities does not necessarily endorse these views, which may or may not prove to be correct.)

The good news is that the price of gold and silver has advanced, as expected, due to the washed-out Commitment of Traders (COT) structure. The bad news is that, so far, the advance appears garden-variety in nature, namely, speculative buying and more dealer short selling. While the overall level of dealer short selling in silver is not excessive, the concentrated net short position of the 4 largest traders has grown to levels not seen in six months. Their net short position has grown to 37,421 contracts on the COMEX. Throw in the 5100 contracts held net short on the CBOT by, most likely, the same big 4 traders and the combined net short position is more than 212 million ounces. Talk about concentration.

Clearly, the big shorts are not covering. They don`t cover much when prices decline and they certainly don`t cover at all when silver prices advance. I still think they are trapped, but that makes them more dangerous, not less, and more likely to try and rig sell-offs. Whether they succeed is anyone`s guess. But if they do succeed, no one should be surprised.

I`d much rather write about the long-term situation in silver because that`s what investors should be focused on. But we live in the short term as well and it is the concentrated short position and the ongoing manipulation that determines daily prices. A friend of mine refers to it as "The Curse." The curse is knowing full well where silver is going to end up eventually, but not knowing when or how the big move will start. For now, we must live with the reality of the super-concentrated short position.

But that`s not the only red flag flying in silver. An extraordinary development has occurred at the NYMEX/COMEX. This development is unusual and may be unprecedented. Their Chief Financial Officer/Chief Operating Officer (CFO/COO), Jerome Bailey, has suddenly resigned. Any time a CFO suddenly and unexpectedly resigns, great attention is paid to what caused the resignation, since it may signal a serious problem with the organization. For a CFO to resign just prior to a planned initial public offering is downright shocking. I doubt if anyone reading this has ever witnessed it before. I know I haven`t.

Of course, there are many possible explanations that would not signal a problem within the organization, in spite of the extraordinary timing, and every reasonable effort must be made to discern the truth. Is he ill, was he fired, did he quit, and if he quit, why did he quit? For the answers we rely on public information and facts. When the documented information and facts run out, then we are forced to rely on speculation. First, let`s look at the facts.

Mr. Bailey was recruited and hired by the NYMEX, as CFO/COO. In March 2006. He came with impressive credentials. He was, successively, over the past two decades, a partner at Price Waterhouse, a controller and managing director at Morgan Stanley, the CFO at Salomon Bros, and Salomon, Inc., the CFO at Dow Jones & Co., and the CFO and Director at Marsh, Inc. (Marsh and McLennan). Each of these companies is larger than the NYMEX/COMEX. The terms of his employment contract indicated he was hired in anticipation of the NYMEX`s initial public offering (IPO) of securities. (All this information can be confirmed on www.nymex.com and in the NYMEX`S SEC filings). In my opinion, Mr. Bailey had better credentials that the combined credentials of the entire NYMEX management team.

There can be no question as to the suddenness of Mr. Bailey`s departure. His signature appeared on an SEC S-1 Registration statement on Friday, October 20. Two business days later, on Tuesday October 24, his termination and release agreement were signed and recorded. From a reading of that agreement, it does not appear that Bailey was fired or quit because of illness http://www.nymex.com/media/8KA102706.pdf It appears he pulled the trigger and wanted out in a hurry. The key aspect to the release was a $500,000 extra payment to not speak badly of the NYMEX.

The central question is why did Bailey resign so suddenly? You would think that this is the question regulators and the underwriters would be asking. Whatever explanation you come up with, why couldn`t it wait until after the IPO? The only answer I can come up with is that he left so quickly to eliminate some personal liability that he foresaw. Remember, he was also looking at a very big post-IPO potential payday that could have netted him many millions of dollars. Here`s where the facts end and the speculation must begin.

Please keep in mind that this is my speculation only, and I could be way off base. What follows is purely my personal opinion on a theory that explains this very unusual resignation. I think this is silver related and the timeline seems to fit. I think Bailey was an outsider at the NYMEX and may not have known about the allegations of the silver manipulation. Certainly, I never wrote to him, as I have repeatedly written to other NYMEX officials.

When I wrote the article, "You Make The Call" on September 19, many hundreds of you wrote to the SEC, asking them to insist that the NYMEX respond to my silver manipulation allegations, as befitting a Self Regulatory Organization (SRO). I think the SEC took your concerns seriously (as they indicated in their individual replies) and would have, as a matter of course, asked the NYMEX about your concerns. I believe that as a result Bailey, as CFO/COO, may have learned about these allegations for the first time. Since some seat holders on the NYMEX are extremely likely to be the same traders holding the concentrated short position the possibility for conflict of interest and manipulation would be clear. The NYMEX is a self-regulating organization where the investigators into accusations of manipulation could be the very same traders doing the manipulating. This would be obvious to an honest man. Bailey investigated, may not have liked what he saw, and left to avoid any personal liability.

I think we`ll know soon if my speculation is close to the truth or not. I can only emphasize that anything that promises to expose the silver manipulation can have an explosive effect on price. There is only one thing standing between the current price of silver and a free and much higher price : the concentrated short position. If that concentrated short position did not exist, there would be no manipulation. Period.

A while back, I wrote that the planned IPO of the NYMEX could have a profound impact on the price of silver. I didn`t elaborate then, but I will now. I don`t care if the NYMEX goes public or not. I think it`s a win/win for silver either way. A public company gets much more scrutiny and regulatory oversight than a privately held company. I don`t believe this silver manipulation can survive much more public scrutiny. The NYMEX has chosen to ignore the allegations and hope they go away. I don`t think that`s going to work.

In the lead-up to the IPO, the NYMEX has been forced to reveal facts that I am sure they would have preferred keeping private, like the details of Bailey`s resignation. The revelations will not stop there. As a publicly traded company and an SRO, I believe the allegations of the silver market manipulation will take on a new meaning.

I have come to the conclusion, unfortunately, that the CFTC will continue to ignore the silver manipulation. That dog just won`t hunt. I`m still hopeful that the SEC is up to the task.

The following essay is reprinted with permission from James Cook (www.investmentrarities.com):

Do Tax Cuts Cost the Government Money?

October 23, 2006

Whenever tax cuts are discussed in Washington, the media and most politicians use the phrase, "cost to government."  "How much will this tax cut cost the government?" we are asked, as though some crime is being contemplated when we consider reducing taxes. The American people have every right to fund the federal government at whatever level they deem acceptable, and if they choose-- through their elected representatives-- to reduce that funding level, they are not somehow injuring the government.  If Congresses passes a new law that results in you paying $1000 less in taxes next year, have you taken something from the government that rightfully belongs to it? Or has the government simply taken less from you?

You don`t cost the government money, the government costs you money!

Of course it`s reasonable to demand that politicians cut spending when they cut taxes.  That`s the definition of real fiscal conservatism: government should not take too much from the private economy in taxes, but neither should it spend too much and run up deficits.  That`s why I vote against the wasteful appropriations bills that relentlessly increase federal spending year after year. 

I reject the notion that tax cuts harm the economy. The economy suffers when government takes money from your paycheck that you otherwise would spend, save, or invest. Taxes never create prosperity. Private-sector innovation and productivity are the engines that drive our economy, regardless of what politicians tell us.

Tax reduction is my first priority in Congress.  The reality is that most working Americans lose about half of their incomes to federal, state, and local taxes. "Tax Freedom Day," representing the portion of the year you must work to pay for government at all levels, is roughly June 1^st for most Americans.  Imagine all of your hard work this year between January and the end of May going to the government!

One tax in particular should be eliminated as soon as possible-- the tax on Social Security benefits.  Those benefits were never taxed between the 1930s and 1984.  Treating them as taxable income represents nothing more than a trick to reduce Social Security benefits by stealth.  I supported legislation that successfully repealed a 1993 tax increase on benefits, and my own bill, HR 180, would go further and eliminate all taxes on Social Security. Our seniors paid taxes throughout their working lives to fund the Social Security system, and it is immoral to tax them again on their benefits.

Various other taxes also must be reduced. Capital gains taxes are terribly counterproductive, punishing those who save and invest. Payroll taxes impose a tremendous compliance burden on businesses, especially smaller entrepreneurs who cannot hire an accounting department. Federal gas taxes should be slashed to provide taxpayers relief at the pump. Most importantly, federal spending must be dramatically reduced so that all Americans can go back to working for themselves instead of working to pay their taxes.

The following is reprinted from the website of Congressman Ron Paul (R-Texas) at http://www.house.gov/paul/. It is a public domain document and can be reprinted freely.

http://www.amazon.com/gp/product/0764599038/qid=1138517977/sr=1-1/ref=sr_1_1/104-9137451-8175124?s=books&v=glance&n=283155

A new e-commerce web portal www.SuperMoneyLinks.com was developed by the great professionals at www.NexWEB.com. They are a top-notch team that I have joined forces with to bring Mladjenovic content to the web.

For those of you that need excellent point and click Internet services, please contact them directly through their website at www.NexWEB.com.
Tell them Paul sent ya!

---

Thank you for reading this issue of the Prosperity Alert. Feel free to pass this along to others (unchanged, of course) or encourage them to get their own free subscription at www.SuperMoneyLinks.com. The next issue will be in your email inbox sooner than you think.

Regards,

Paul Mladjenovic
Email: paul@mladjenovic.com
Tel: 201-585-0239