The Federal Reserve has raised interest rates for the 12th time in a row. Rates are the highest level they’ve been since late 1999. The Feds are trying to apply the brakes on the situation with our economy as inflation gets more worrisome. So, even though you may not be feeling it in your own wallet, the economy is growing at a fast clip right now. So, the Feds are going to continue to push up interest rates. Home equity lines of credit will be at 7 percent, instead of 4 like last year. For people with questionable credit, rates will be in the 9 percent range. It’s a great time to be a saver, though. There are wide gaps between the lowest interest rates and the highest ones at banks. So you can’t just be a creature of habit and put the money where you’ve always had it If you’re not Internet oriented, you can find fantastic rates from smaller banks in the Sports and Business sections of newspapers. The best rate comes from emigrantbank.com, which is offering 4 percent on savings accounts right now. The worst rates are coming from the big monster mega banks. If you have home equity line debt, though, pay it off as quickly as you can.
Bankrate.com recently listed the cheapest and most expensive private colleges out there. The gap between the two is amazing. With private colleges, the tuition difference is a 7-to-1 ratio. Clark thought the most expensive college was either Boston College or Boston University. But actually the most expensive college is Sarah Lawrence. The tuition alone is $32,000 a year. The second most expensive school is Kenyon College in Ohio, followed by Trinity College in Hartford, Conn., and George Washington University in D.C. At the other end, rates are $4,600 a year to about $10,000 year. But the interesting part is that there are several public colleges that are more expensive than the cheapest private schools. So, private schools are not always going to be out of your range.
Have you heard of the Web site, “Gottadeal.com”? It’s one of the many sites that lists the sales retailers are having on Black Friday, the Friday after Thanksgiving. Traditionally, it’s the biggest shopping day of the year, and getting the deals is a huge coo for the Web sites. Gottadeal.com now has deals listed for about a half a dozen retailers, including WalMart, Costco and others. But, more and more, the week between Christmas and New Year’s is getting bigger for shopping because of gift cards. So, a leak of deals is a huge problem for retailers. The retailers try to guard their information because once it gets out the other retailers can undercut them. The WalMart leak is probably the biggest because the company is going to have great deals. They include a computer with built-in wireless access for $398 and tons of items will cost less than $5. In order to get the deals, you’ll have to be at the stores very early in the morning. The good news is that the information just feeds on itself because each company will try to one-up the next. Just don’t get caught up in the frenzy and buy something you don’t need.
Today is a big day in the world of taxes. The voters of Colorado have decided to reform TABOR – The Taxpayer Bill of Rights. Clark has been a big fan of this act for about the past 10 years because it dealt with restrictions on government, especially state government. When it was passed, the law imposed strict limits on government spending and growth based on inflation. It shrunk the share of government in the state of Colorado, which was a great thing. But the restrictions became too tight and the citizens of Colorado decided to increase taxes on themselves by about $700 million a year. So, there will still be strict rules, but it won’t be as restrictive. Clark thinks the idea was great in practice. He agrees that we need to limit the strength of government and its ability to grow, and he thinks more states need some kind of enforceable limits. In other news, President Bush’s tax panel has submitted its proposal for changes to the country’s tax code. It would change the way we’re taxed in that it’s a simpler code with just a few tax brackets. Most people would pay 15 percent on income. Some would pay as much as 30 or 33 percent. The plan also reduces the mortgage interest deduction. But people will be taxed less, so it kind of evens out. Several groups are going to get hit hard, though. Single folks, those over 65 years old and those living in areas with inflated housing prices are among them. Clark would be happier if we went to a completely different system all together, so we’ll keep you posted on what happens.
Clark remembers when making a long distance call in college cost him $3.55 for the first three minutes. A stamp was about 6 or 8 cents at the time. Today, most long distance calling is free as part of cell phone rate plans and Internet calling. So, long distance calling has no economic value anymore and people communicate electronically in so many different ways. So, the news that stamp prices are going up again really doesn’t matter to anyone. You may have not even heard about the increase to 39 cents. Paying bills is a totally different thing today, as electronic bill pay grows. It used to be a huge deal when the cost of stamps went up. But come Jan. 1, 2006, a 2-cent jump is not going to affect many people. If it’s still affecting you, maybe you should jump into the 21st century.
