Tuesday, October 19, 2010 Edition #581

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Today’s Highlights:
1st Flash: WE OWE HOW MUCH???   Past issues of GCFlash:
October 12, 2010 Edition #580
October 5, 2010 Edition #579
September 28, 2010 Edition #578
September 21, 2010 Edition #577

Looking for articles from a past issue of GCFlash not listed above? Find them in our Knowledge Base!

On The World Wide Web

Track the U.S. national debt in real time. Watch the world debt levels and a selected state here.

Find the actual public debt on a specific day or date range from January 4, 1993 to the present at Treasurydirect.gov. From there, click on historical debt outstanding for fiscal years dating back to 1791.

Looking for something dog related? One site compiles everything canine on the web so you can find supplies, gifts, breeders, rescue organizations and much more with a click. Find them here.

Tip of the Week

Seems as if most every product today has an extended warranty available. Should you invest? Ask yourself a few questions first. If the product breaks, will you want to get it repaired? Technology changes so quickly that often an upgrade to a new version is a better choice.

Will the repair cost more than the extended warranty? Ask the salesman for the cost of a typical repair and decide which is the better option. What are the chances that the product will break while the warranty is still in effect? Answering these questions will help you decide whether the warranty is a good investment or if your money is better saved for other purposes.


"He who is not courageous enough to take risks will accomplish nothing in life." - Muhammad Ali

Today in History

1873 - Yale, Princeton, Columbia and Rutgers universities draft the first code of football rules.

Flash Fact

Henry Ford was Charles Lindbergh's first passenger in the Spirit of St. Louis.

Have a comment about something you read in GCFlash? Suggestions for future articles? Drop us an email!
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Our Current Rates:

For a listing of our current deposit and loan rates, visit www.gcfbank.com/rates.aspx.

1st Flash

The Treasury Department reported today that $3 Trillion has been added to our country's national debt in the past two years. Numbers that large are hard for ordinary people to digest.

National debt is defined as direct liabilities of the U.S. Government. Our public debt consists of two major concepts. Debt held by the public includes U.S. Treasury securities held by institutions other than our government. Gross debt includes intra-governmental obligations such as the Social Security Trust Fund and Medicare that our government borrowed from itself.

Debt held by the public is the most important concept as it measures the cumulative amount outstanding that the government has borrowed to finance deficits.

The U.S. has had public debt since its beginning. The American Revolutionary War was costly to a fledgling nation. The first reported value dates back to January 1, 1791 when our national debt was $75,463,476.52.

It grew and shrank until President Andrew Jackson's term in 1835 when it went to zero. But it grew quickly soon after to reach $65 million by 1860.

Once again, war proved costly as the Civil War ballooned our debt to $2.7 billion by 1864. After fluctuating the remainder of the century, it grew steadily to about $22 billion after World War I.

The trend continued through World War II and the introduction of social programs by Presidents Roosevelt and Truman. Our nation has encountered a steady stream of events that must be pursued, despite the cost. Including recovering from the September 11th terrorist attacks. All contribute to record levels of debt.

If you run a household, you understand the concept of debt. Should your expenses exceed your income in any particular month, you need to borrow money to make ends meet. You'll pull out a credit card to pay for groceries or gas with the understanding you will pay your bill the following month.

But the next month finds your credit card bill added to the pile of obligations that you couldn't meet the month before. You can only squeeze out enough for a partial payment. Now the interest starts to build. Your car needs a major repair or illness strikes and your financial picture got ugly quite quickly. Soon you can only pay the interest on that debt, leaving the balance to grow.

But a consumer credit card has a limit. Your charging privileges end until you can pay the balance down. Our federal government has no debt limit.

Legally, it does have a cap on how deep our debt can go. Yet once reached, Congress can approve a new ceiling.

Like your home budget, the more debt you are paying off, the less you can stash as savings. In the case of our country, this means less money to reinvest in our economy or to refurbish a crumbling infrastructure.

When Social Security was solvent, the government tapped their account to pay for other federal programs. Those funds cannot be repaid as intended. As aging baby boomers qualify for benefits, the money will have to come from somewhere.

The same with Medicare. Those same baby boomers paid into these systems since they started their working years with the expectation these benefits would be theirs at the proper time. These benefits must be honored, with our debt increasing in the process.

Throughout U.S. history, there has always been a budget deficit. The next generation has always paid for what the previous generation spent.

But today's young workers already know this system won't be available for them. So the wise ones are taking their future into their own hands and planning now for their retirement needs. We can't thrust our burdens onto their shoulders as well.

Budget deficits occur when more money is being spent than earned. There are only two ways they can be fixed. You can either bring in more money; i.e., raise taxes, or cut spending.

No matter how high you raise taxes, we cannot eliminate this deficit. We can't even come close to closing the gap.

Spending cuts are never popular. Politicians will discuss funding cuts for some of the most important programs. One might wonder if it's merely to make raising taxes more palatable.

Yet wasteful spending is abundant. Certainly steps can be taken to eliminate costs without hurting services the needy depend on.

You can make a difference. The mid-term elections are upon us. Voting is a responsibility to be taken seriously. Learn about the candidates, don't fall for propaganda in an opponent's negative campaign. Elect officials who best represent your views, those with the skills to serve the greater good of the people.

One step at a time, we can recover. The debt will likely be with us always. But if we can stop the spiral and get it under control, we've made great progress.

2nd Flash

We haven't even costumed the kids for trick-or-treating, do we really need to think about our holiday plans now?

The answer is a resounding yes. Air fares are expected to rise compared to last year, and flight schedules are getting trimmed. The sooner you book your tickets, the better. Or you just may end up disappointing grandma.

Try to remain flexible with your itinerary. Online travel sites offer the option to check fares within a date range. You might be surprised by how much more you'll pay to travel on a Sunday rather than a Tuesday or Wednesday.

You'll find the lowest fares and most available seats if you can fly on the holiday itself. Is your family willing to have turkey dinner on Friday instead of Thursday?

Check alternate airports. The savings are significant if you can fly into Midway rather than O'Hare when you're visiting Chicago.

The flight you're on might continue to another destination once you've reached yours, and with it a lower fare. I was booking a flight to visit family in Cleveland and checked nearby airports. I found a flight into Pittsburgh for $50 less, but I had to connect through Cleveland. The identical flight I was considering at the higher price. My seat went empty on the Cleveland-Pittsburgh leg of the trip.

Baggage fees will add to the cost of your flight. And the Transportation Security Administration (TSA) frowns on wrapped packages in luggage. They will likely unwrap the gifts to confirm their contents. Save yourself money, time and trouble by shipping your packages in advance.

You are permitted one small carry-on bag along with a personal item such as a laptop, briefcase, small backpack, purse or camera case. Undeveloped film and cameras with film belong in your carry-on bag. They can be damaged by the screening equipment for checked baggage.

Label your laptop computer with contact information in case you get separated from it.

Do NOT place jewelry, cash, laptop computers, electronics or fragile items in checked baggage. Think carefully about the personal items you travel with, as the screeners will have to examine the contents of your bag.

Liquids, aerosols and gels are subject to the 3-1-1 rule. You may carry your liquids in volumes of 3.4 ounce bottles or less packed in one clear, plastic zip-top bag per traveler. They should be screened separate from your carry-on baggage. Larger quantities must be packed in your checked luggage.

Medications, baby formula and food, and breast milk are permitted in reasonable quantities above the three-ounce limit. They don't have to be packed in the zip-top bag but you do have to present them for inspection at the checkpoint.

Beginning November 1st, new information will be required when you book travel. You must provide the airline with your full name, gender and date of birth within 72 hours prior to departure or risk being denied boarding. Many airlines have already been requesting this information. This gives TSA officials time to check their no-fly list. And expected to avoid confusion with someone whose name is similar to yours that appears on their list.

Expect delays. Your published flight times are longer than the flight actually takes so you have some leeway. Airlines do this to boost their on-time performance rating.

Air travel can be stressful. Know what to expect and try to go with the flow. It's all worth it when you can sit down to holiday dinner with your loved ones.

Today’s Market Rates
Tuesday, October 19, 2010
Dow Jones Industrial Average
(Up 550.57 or 5.28% since 12/31/09)
10,978.62 (-1.48%)
S&P 500
(Up 50.80 or 4.56% since 12/31/09)
1,165.90 (-1.59%)
(Up 167.80 or 7.39% since 12/31/09)
2,436.95 (-1.76%)
10 Year Treasury Bond Yield 2.48%  
British Sterling 1.5707  
Euro 1.3734  
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