The Motley Fool extends its heartfelt condolences to the families and friends of the seven astronauts lost on the space shuttle Columbia.
In the last email sent to Earth from the shuttle, Laurel Clark describes their extraordinary perspective. We offer an excerpt in memoriam.
I have seen some incredible sights: lightning spreading over the Pacific, the Aurora Australis lighting up the entire visible horizon with the cityglow of Australia below, the crescent moon setting over the limb of the Earth, the vast plains of Africa and the dunes on Cape Horn, rivers breaking through tall mountain passes, the scars of humanity, the continuous line of life extending from North America, through Central America and into South America, a crescent moon setting over the limb of our blue planet.... Whenever I do get to look out, it is glorious. Even the stars have a special brightness. -- Friday, Jan. 31, 2003
In today's Motley Fool Take:
- Goodbye, IRAs?
- Quote of Note
- Inside the New Budget
- Shameless Plug: Motley Fool Credit Center
- Vivendi's Assets for Sale
- Discussion Board of the Day: Video & PC Games
- Quick Takes: Sara Lee, Wendy's,Cosi,LendingTree, more
- And Finally...
Such are the quandaries investors face when trying to save for the future. And these are exactly the quandaries the Bush administration is trying to eradicate with its proposed overhaul of tax-favored savings accounts. Get a load of some of these ideas:
Roth and traditional IRAs will be replaced by a single Retirement Savings Account. The RSA will be Roth-like in that contributions are not tax-deductible, but earnings grow tax-free. Also, the contribution limit will be raised from the current $3,000 to $7,500. Gone will be any age or income restrictions, and the age at which penalty-free withdrawals can be made is moved up to 58 from 59 1/2.
401(k)s, 403(b)s, governmental 457s, and SIMPLEs will all become known as Employer Retirement Savings Accounts. They will all generally follow the same rules as current 401(k) plans, though some of the rules will be simplified.
- A new Lifetime Savings Account will be introduced, which -- like the RSA -- will start with a contribution limit of $7,500, earnings will grow tax-free, and there are no age or income restrictions. However, the money in an LSA can be used for any expense, at any time: for college tuition, nursing-home costs, vacation airfare, or Motley Fool products (which the administration believes should be in every American household).
Higher contribution limits and simpler rules -- that's good stuff. Of course, there are criticisms, mostly along the lines of this being another tax break for the rich, since lower-income workers can't max out current accounts, let alone take advantage of higher contribution limits.
That may be true. With the nation's median income for a four-person family at $62,228, according to the U.S. Census Bureau, meeting the current 401(k) limit ($12,000) and IRA limit ($3,000) would require 24% of gross income. That's a heckuva stretch for most families. So the higher contribution limits won't be a factor for most people.
But on the whole, there's much to like in the proposal. A savings account offering tax-free growth, which can be used for anything by anyone, sounds good to us. And simplified retirement accounts aren't bad either. Keep in mind that this is just a proposal and a long way from becoming law. So don't let this prevent you from continuing to fund your current savings accounts.
"Budget: An orderly system of living beyond your means." -- Anonymous
Amid distractions from the weekend's space shuttle tragedy and a looming war with Iraq, President Bush unveiled his 2004 budget proposal this morning.
Here's a quick summary:
The $2.32 trillion spending plan projects revenue of $1.92 trillion, leaving a deficit of over $300 billion. The total deficit would reach $1.08 trillion over the next five years.
The president proposes a $670 billion economic stimulus in the form of tax cuts, including the elimination of the double taxation of stock dividends. Altogether, the president's new tax cuts would add up to $1.3 trillion over the next decade, on top of a $1.35 trillion tax reduction already passed in 2001.
The defense budget would increase by 4.2%, or $15.3 billion, to $379.9 billion. That represents half of the $30 billion in new money the president seeks for the operation of all federal agencies, not including Social Security or Medicare.
The budget for NASA would increase by $500 million to $15.47 billion. The space shuttle program would receive a 24% increase to $3.97 billion. These numbers were finalized before Saturday's tragedy.
- Education spending would increase $2.8 billion to $53.1 billion.
The verdict on the budget proposal varies, depending on political views and tolerance for budget deficits. The plan is drawing predictable opposition from Democrats, such as Sen. Kent Conrad of North Dakota: "He's passing the buck to our children. It's stunning how much debt he's going to add."
"Compared to the overall federal budget and the $10.5 trillion national economy, our budget gap is small by historical standards," the president counters.
Expect the proposal to undergo intense debate in the months to come as it wends its way through Congress.
Credit can be your best friend or your worst enemy. And you know what they say... Don't turn your back on your enemies. Friends may come and go, but enemies accumulate. So it's time to address that big elephant in the closet -- your credit. We've got your back! Visit our new Motley Fool Credit Center, and learn how to make credit work for you.
If the entertainment industry held a garage sale, you'd find a colorful collection of sellers looking to clean house by haggling with bargain-hunting collectors.
It's ironic. With record-setting box-office returns and the popularity of DVDs propping up the industry's operating dynamics, you'd expect gold in the silver screen.
Not quite. Weekend reports indicate Vivendi Universal
Vivendi -- or even Davis -- could balk. Davis earned his first batch of billions in the oil fields, so who knows if he's serious or simply drilling away for sport. But one thing's for sure: Vivendi needs to find asset buyers. Calling off the proposed asset sale might scare away the same investors that have seen the company's stock nearly double after it bottomed out six months ago.
If Vivendi decides to shake its moneymakers in smaller amounts, rumor has it Microsoft
Either way, the company might want to hurry things along. If AOL Time Warner
Are Microsoft and Electronic Arts really going to make a move for Vivendi's video game business? Aren't there other cash-rich developers worth pursuing first? Which assets would you sell if you were Vivendi? What's in a game name, anyway? All this and more -- in the Video & PC Games discussion board. Only on Fool.com.
You know what happens when you serve up some Sara Lee
I see you, but you don't look so good. Shares of health-care supplies specialist ICU Medical
Take heart, McDonald's
There's this real cool dessert dish at hip coffee house Cosi (Nadsaq: COSI). It's essentially a s'mores kit, complete with a fire-lit hibachi to roll your own blend of chocolate, marshmallow, and graham cracker. You can actually order one online. If the fire dies down, try to bring it back by throwing in some Cosi stock certificates. Yes, the stock got hit hard today after the company announced an executive shakeup. While it now projects to become cash flow positive earlier than originally expected, the stock has been halved since last year's IPO.
If money were to grow on trees, let's hope that it would have enough business sense to lend it out at a favorable rate. LendingTree
Today on Fool.com:
- For updated stories throughout the day, bookmark our ever-changing News section.
- We know what's best for our net worth -- so why don't we do it? Robert Brokamp has a few theories, and he partly blames the Bucs.
- Scott Schedler says eliminating the taxation of dividends will help restore confidence in our markets.
- Rick Munarriz explains why being short in the market right now can still leave your portfolio standing tall.
- Barbie dolls up Mattel's Q4: The toy maker spreads good tidings, thanks to Barbie and Elmo.
- Quattrone has left the building: CSFB's star investment banker is asked to take a hike.
- In Fool's School, don't squash this "Spider."
Bob Bobala, Robert Brokamp, Jeff Fischer, Tom Jacobs, LouAnn Lofton, Bill Mann, Selena Maranjian, Rex Moore, Rick Munarriz, Matt Richey, Jackie Ross, Reggie Santiago, Dayana Yochim