ID Theft and the IRS

I am, as a general rule, an identity theft skeptic.  Of course, I know it is a real problem, I just think the smoke to fire ratio is very high. The fear, stress, and peculiar behavior that ID theft causes in consumers is out of all proportion to the actual danger.

Part of the reason the fear outstrips the danger is aUSPS Stamp widespread misunderstanding about who is the usual victim of identity theft. It is generally not the person whose identity is stolen, but the financial institution that gets defrauded in part two of the operation.

And the fact that it is generally large and sophisticated outfits that are the victims leads to the other reason the fear is overdone. ID theft is just not that easy to pull off. It takes a fair amount of effort and cleverness to get a credit card in somebody else’s name, and then the reward is merely that you can charge things for a short period, possibly lasting only hours, before the card company catches on and shuts you down. That is a tough way to make a living.

Or so I thought. Turns out there is one very large financial institution that you can cheat with only the minimum of ID thieving effort. It is called the Internal Revenue Service.

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A Frugal Friday Fourth

Fireworks Adam Berman It is July already here at BMA World Headquarters, and we all know what that means. Seasonal posts about winter and Christmas.

There was Ten Ways to Keep Energy Costs Down in Winter at My Personal Finance Journey. And one of the few blogs with a comma in its title, Call Me What You Want, Even Cheap, shared a story about saving money buying Christmas gifts for relatives at a dollar store. That went well until one of the cousins complained. The post does not say what she got, but it was apparently either a “cute toiletry gift basket” or socks. We guess there is no making some people happy.

Of course, buying very inexpensive gifts is a half-measure. As Donna Freedman tells us at MSN Money in Summer’s almost here: Think Christmas, “A no-gift holiday really is an option.”

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Does Exercise Make You Rich?

Time to add to the BMA collection of academic studies on what makes people rich. Previous findings include that watching TV makes you poor, being smart does not help, and financial literacy classes reduce financial literacy.Weightlifter

Today’s entry is exercise. An economics professor at Cleveland State University has discovered that regular exercise will increase your pay. As the SmartMoney blog that brought this important finding to my attention put it, Want a 9% Raise? Hit the Gym.

Just to be clear, Professor Kosteas does not merely present a correlation between regularly working out and making more money. He argues cause and effect, that “Regular physical activity has been linked to improved mental function, psychological wellbeing and energy levels, all of which can result in increased productivity and translating into higher earnings.” (I could not find the final paper on-line for free. The quote is from a working draft.)

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Unsafe America

mcdonaldsfriesfront1 Last Friday in June. Time to clean out the queue of news stories.

Sleeping at the Airport

The TSA has fired eight of its screeners at Newark Airport “after they were captured by surveillance cameras sleeping or violating other standards.”

I have never thought that TSA screeners were the sharpest knives in the drawer, but this makes me wonder. Did they not know that their workplace was under video surveillance? You would think they would be familiar with airport security measures. Or perhaps they assumed that their colleague monitoring the video would be asleep too.

In what is apparently a separate incident, the Newark Star-Ledger

reports the TSA also is looking into photographs of screening supervisors who appear to be sleeping in front of monitors used for detecting explosives and other threats.

Two of the supervisors say they were not working at the time the photos were taken.


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The EuroCrisis: An American View

I know many of you have been asking yourselves, what does Frank think of all this crisis stuff going on in Europe?Train_wreck_at_Montparnasse_1895_2 Is he worried about it? Should I be?

The trouble in Europe has been going on for rather a while now, arguably since the financial crisis began in 2008, although it took a while for everybody to really notice. So quite a lot has already been written and said about it. If you have not been paying close attention, then 1) good for you and 2) maybe my comments will help fill you in.

It is really a pair of twin interrelated crises on the very slow burn in Europe. There is a banking crisis. And there is a sovereign debt crisis.

The European bank problems are similar to the ones we had on this side of the Atlantic. Indeed, in as much as European banks bought surprisingly large amounts of American mortgage backed securities, it is the exact same problem. But European banks, particularly Spanish and Irish ones, also lent heavily into their very own hometown real estate bubbles.

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