Christmas Countdown

Its countdown time, only 7-days left until Christmas. I hope you have finished your Christmas shopping. If you haven’t finished your shopping list yet, be prepared to face long lines, crowded stores and rude shoppers.

We went out yesterday after church to have our very first family picture taken. We were even greeted with some good news; the pictures will be back in time for Christmas. What a surprise. We have always intended on getting our pictures taken but the thought of getting all dressed up and actually doing it was something that just never seemed to happen.

Yesterday, we were getting ready to watch our son perform his first Christmas program at our local church. He was all dressed up in suit coat and tie, looking every bit the part of the “businessman” he was playing in the program. It provided the perfect excuse.

The kids did a terrific job and we were able to get every moment on videotape. I can’t wait to sit down and watch his performance again and again. What a wonderful early Christmas gift.

Speaking of Christmas gifts. In my several shopping trips, I’ve been able to find some terrific deals this year. Mervyn’s has much of their inventory on sale at 50% off and more. I picked up several plush spa robes as gifts, they were marked “70%, when you take an additional 40% off at checkout.” I couldn’t believe my luck. The price for each robe $14.98.

Not only do I get a great deal of pleasure thinking of giving such a warm luxurious present to the people I love, but I saved more money than I ever thought possible in the process. I only wish I could have saved as much on all the pictures we ordered. We ended up spending much more than I planned but how can you put a price on such a lasting gift?

My entire family still lives in Michigan, so gift giving for them gets to be a real challenge each year. We normally end up spending almost on shipping costs as we do on the gifts themselves. So, this year, I tried to do make smart decisions.

I had the bright idea of buying gift cards for my grown children and the grandchildren. Let’s just say it didn’t work out quite as I had planned, so I abandoned that idea. [Read about my experience.]

Instead, I’ve done much of my Christmas shopping online with Amazon. Amazon offers a delightful selection of merchandise and with you spend at least $25, shipping is free on many items. I’ve found it a terrific way to save on shipping costs and get the items that my family really wants.

However, if you want an item to be delivered by Christmas, time is running out. Order made at this late date, will likely not arrive before December 25, 2006. Though I will say, they have surprised me in the past. One year a package I ordered from Amazon was actually delivered on Christmas Day. What a shock that was.

If you haven’t finished your shopping list, don’t be afraid to check out some of the better stores in your area. Not only will you find some wonderful deals to be had, but also you will often find better quality merchandise for the same price or less, than you will find at discount stores like Walmart, Target and K-mart.

The big bonus is that the better stores aren’t nearly as crowded, allowing you to get in and out with your purchases in much less time. I found that Mervyn’s had many of the same items as our local Walmart, for the exact same price.

I love it when I can get a good deal and I don’t have to go to Walmart to do it. I equate Walmart with low prices, low quality merchandise and even lower customer service standards but I’ll save all that for another article.

From my family to yours, we wish you all a very Merry Christmas and best wishes a marvelous New Year.

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Professors Find Preschool Benefits Grossly Exaggerated

Errors in Rand’s cost-benefit analysis caused severe over-estimation of preschool benefits

A Rand Corporation study that claims universal preschool will deliver $2.62 in benefits for every dollar spent by California taxpayers has been thoroughly discredited by two San Jose State University economics professors who show the Rand preschool study “cherry-picked”data, based its claims on ” unbelievable assumptions that bias the results,” and omitted numerous costs and other factors that significantly lower the alleged benefits of universal preschool.

The review of the Rand report, published by the Reason Foundation, uses Rand’s own data and methodology and finds that California would actually lose 25 to 30 cents for every dollar spent on universal preschool when just a few of the Rand report’s most glaring mistakes are corrected. And the Reason study concludes those losses would be even greater if many of the proposed preschool program’s costs, wrongly excluded from Rand’s calculations, were included in the analysis.

“On the surface the Rand study looks like a credible, thoroughly research document,” said Chris Cardiff, who teaches economics at San Jose State University and is co-author of the analysis of Rand’s universal preschool study. “But upon review we found the Rand study fails to pass even the basic benchmarks of what can be considered a reasonable economic analysis.”

“Nearly every time there is a choice on how to calculate the benefits of preschool, Rand chooses the rosiest – and most unlikely – scenario,” stated Edward Stringham, Ph.D., assistant professor of economics at San Jose State and co-author of the review. “When it comes to the costs of universal preschool, Rand completely ignores some costs and dramatically underestimates others. Frankly, if one of my students turned in Rand’s cost-benefit analysis on preschool it would get an ‘F.'”

Reason’s examination of the Rand report discovers that Rand offers no real evidence showing how or why upper- and middle-income children who already attend preschool would benefit simply by moving from their current private preschools to government-run preschools under the universal preschool program.

The Rand study actually cites evidence to the contrary, showing that middle- and upper-income kids get no long-term gain from preschool participation. And yet, despite this evidence, when conducting its cost-benefit analysis Rand curiously, and wrongly, assumes the opposite – projecting that middle- and upper-income students would in fact somehow benefit from California’s proposed universal preschool program.

The Reason study shows that by using all of Rand’s calculations and assumptions, ignoring how overly optimistic many are, and simply eliminating upper- and middle-class children from Rand’s societal benefits forecast, the alleged benefits of universal preschool plummet from $2.62 for every dollar spent to $1.95 for every dollar spent.

Likewise, the Rand study claims that low-income students who already attend government-run preschools will suddenly receive an extraordinary boost in the quality of their education when they are in the same government-run preschools under the universal preschool plan, presumably because the teachers would be required to have bachelor’s degrees.

However, the Reason Foundation study finds that if we take a much more realistic approach and assume that government-run preschools under the universal preschool program would produce results similar to those of today’s government-run preschools, the supposed benefits nose-dive even further.

When the benefits to low-income children who already attend government-run preschools are sensibly reduced while using the rest of Rand’s analysis, the benefits fall to 82 cents for every dollar invested – meaning Californian taxpayers actually lose 18 cents on every dollar they invest in universal preschool.

The benefits plunge even more when the San Jose State professors remove Rand’s “fudged” numbers from the cost-benefit projections. At one point, Rand acknowledges some kids would go on to earn more money and pay more taxes even if they never attended preschool. Thus, in a credible cost-benefit analysis, 25 percent of the earnings and taxes paid are not due to preschool. However, after specifically noting this fact, Rand concludes that some mysterious unquantified benefits should cancel out this recommended 25 percent reduction. And so, Rand actually throws an extra 25 percent worth of unquantified benefits into its calculations.

If this “fudged” 25 percent is removed, the benefits of universal preschool – using RAND’s own approach – would fall to 71 cents for every dollar invested in preschool – a loss of 29 cents on every dollar for California taxpayers.

The Reason study finds several other major problems and faulty assumptions in the Rand report as well. The Rand study:

  • Unreliably speculates about universal preschool benefits based on very small-scale studies;
  • Ignores strong evidence from major studies that bring their conclusions into doubt;
  • Underestimates the costs of creating a whole new state preschool bureaucracy;
  • Significantly underestimates the economic consequences of increasing taxes in California;
  • Fails to consider the existing K-12 teacher shortage;
  • Fails to consider the impact a new statewide preschool program would have on teacher salaries;
  • And ignores many intangible or difficult to measure costs related to universal preschool.

“It turns out the emperor has no clothes,” said Lisa Snell, director of education at Reason Foundation and the review’s project director. “The oft-cited Rand study doesn’t stand up to basic scrutiny and universal preschool can’t deliver on the overly optimistic promises that Rand and others have made. Instead of spending billions each year and naively hoping universal preschool will deliver a miracle, we need to fix our state’s broken educational system.”

Full Report Online

The full study, An Assessment of Rand Corporation’s Analysis and Proposals for California  is a compilation of Reason’s universal preschool resources, including op-eds published by The Wall Street Journal, San Francisco Chronicle, and others.

About Reason

Reason Foundation is a nonprofit think tank dedicated to advancing free minds and free markets. Reason produces respected public policy research on a variety of issues and publishes the critically acclaimed monthly magazine, Reason. For more information, please visit


Edward Stringham, Ph.D., San Jose State University, (408) 924-5419
Chris Cardiff, San Jose State University, (408) 924-1369
Lisa Snell, Director of Education, Reason Foundation, (951) 218-1171
Chris Mitchell, Media Relations, Reason Foundation, (310) 367-6109

U.S. Tax Returns, Identity Theft and H&R Block

by: Shawn K. Hall and Annette M. Hall
Updated: April 1, 2011

What you don’t know could hurt you

You simply can’t be too careful these days, so you do your best to protect your personal data.

  • You purchased a crosscut shredder and never put anything with your name, address, phone number or social security number in the trash until it’s been through chewy.
  • You update your computer software regularly.
  • Regularly run virus and spyware protection software on your computer.
  • You don’t sign the back of your credit cards but instead you write “See ID.”
  • You have a credit report ran at least once a year as recommended by credit experts.

So, you’re safe right?

Despite your best efforts to protect your family members from identity theft, the entire situation could be well out of your hands and the situation is sure to get worse before it gets better.

55 Million Americans at Risk for ID Theft

According to a USA Today report made last week, last year was the worst ever for computer security breaches. At least 130 security breaches put more than 55 million Americans at risk for ID theft last year.

The Arizona Daily Star reports: “Big companies suffered significant data losses last month that could have a big impact on individuals. Last week, the time-share unit of Marriott broke the news to 206,000 employees and customers that key personal data, such as Social Security numbers and credit card numbers, went missing after backup computer tapes disappeared from an Orlando office.”

These stories are just the tip of the iceberg. In the past couple of years the situation has spiraled out of control. Only a handful of states even have mandatory notification laws requiring companies who have suffered a lost of data to notify their customers. This means that if your local dentists office has their computer stolen, with all of your medical and personal records on it, you may or may not be told of the breach.

According a story in The Journal News: In March 2005, ChoicePoint, a Georgia-based information broker, revealed that the personal data of hundreds of thousands of Americans in all 50 states had been compromised. The revelation came only because a California law required customer notification of data theft.

We can expect the situation to continue to worsen due not only to computer theft and dishonest employee’s but also, due to the increased amount of personal information being outsourced to foreign countries like India.

Your Personal Tax Return

According to Kansas City Business Journal – H&R Block has about 25 percent of its work force in Kansas City and about 1,000 employees in India. Block claims that its work force in India is better educated than its work force in the United States. Block’s India operation scores better than its equivalent U.S. operations on measures of efficiency and customer satisfaction, Ernst said, and the company’s workers in India do their jobs for about one-fifth the amount its U.S. workers get paid.

In another USA Today article published in February of 2004, we learn “tax experts say Indian chartered accountants – the subcontinent’s version of certified public accountants (CPAs) – will prepare 150,000 to 200,000 returns this year (2004), up from about 20,000 in 2003.”

Folks, when you have someone prepare your tax return, you are putting a great deal of faith in that individual or company. They will have access to not only your income and expenses but your address, social security number, phone number and even your children’s names and date of birth.

Speaking Social Security Numbers, the following letter went out last week from H&R Block, Kansas headquarters to select clients. Apparently, someone made a huge mistake. So far this blunder has somehow been kept out of the news. The company is claiming there is nothing to worry about but… well I’ll let you be the judge.

Dear Customer,
Recently we mailed you a free copy of our TaxCut software. We believe that this complimentary software will meet your 2006 tax preparation needs, based on our prior experience with you as an H&R Block client. We hope that you will try TaxCut and find it to be a great solution for filing your next tax return.

However, since we sent you this CD, we have become aware of a mail production situation that has affected a small percentage of recipients, including you. Due to human error in developing the mailing list, the digits of your social security number (SSN) were used as part of your mailing label’s source code, a string of more than 40 numbers and characters. Fortunately, these digits were embedded in the middle of the string, and they were not formatted in any manner that would identify them as an SSN.

Nevertheless, we sincerely apologize for this inadvertent error, which is completely inconsistent with out strict policies to protect our clients’ privacy. Our internal policies limit the use of client SSNs for purposes other than tax preparation. Furthermore, our internal procedures require that mailing source codes are formulated in a manner that excludes use of any sensitive or confidential information. Please know that we have conducted a thorough internal review of this matter, and are taking actions to ensure this does not re-occur.

Again, please understand that the digits of your SSN were embedded in the middle of a lengthy source code, and they were not formatted in a manner that identifies them as an SSN. As a result, we believe that exposure of your SSN digits was limited to you alone, since you are the only person who would recognize their significance. Nonetheless, we suggest that you destroy the wrapper and mailing label of the free TaxCut CD we sent you. If you would like more information about this incident, please visit, a special Website that contains additional details and an e-mail link for contacting us with your questions.

On behalf of more than 100,000 associates of H&R Block, allow me to apologize for this unfortunate situation. Through 50 tax seasons, H&R Block has earned a reputation as a valued, trustworthy ally to our clients, and we sincerely hope that you will find the free TaxCut CD and our information packed Website to be helpful tools for the 2006 tax filing season.


Tom Allanson
Senior Vice President & General Manager
H&R Block Digital Tax Solutions
4400 Main Street Kansas City, MO 64111

I wonder if anyone is going to inform Mr. Allanson that this “lengthy” source code is only 40 digits, and an SSN is nine digits. All it would take is one person to figure out where their own SSN was placed within this “lengthy” string and then they can abuse the data for every other string they see (perhaps that is why many of the disks were never received?) Coincidence? I think not.

I also wonder if Mr. Allanson is aware that Social Security Numbers meet certain numerical pattern methods that would facilitate extrapolating the SSN even if the attacker did not know where the number began within this “lengthy” string.

But I guess I expect too much from the guy selected to write the corporate spin.

It’s a moot point.

Of course it’s bad press to be caught exposing this information about your customers to anyone who wants to look at your mail. It’s bad form to have this information available in plain sight. That’s a given. And we should be outraged. But in the long run, this is small potatoes from a company that is known to offshore this same information to locations in India where the information is collected and processed by foreigners with no relationship with our government. They can’t even be punished if they choose to collect and abuse the information for themselves.

That’s a horrible thought, isn’t it? All of your business, residential, major expenses and income details being sent to someone who is paid far less than what a 16 year old in the US would make flipping burgers. What is tying these people to the ethical standards we hold our own citizens to? Oh, don’t forget that the institutions “training” these staff have repeatedly been called for assisting or enabling students to cheat their way through college exams. Sure, that’s ethical.

But it’s not like they’d actually exploit or sell this information, is it? Well, actually, yes. It is. If a call center worker in India can collect and sell details on a thousand bank accounts, where the information would be far more limited than what a tax consulting agency would provide, no lack of potential for abuse exists.

That’s okay. You can excuse yourself from the whole situation by just not using H&R Block, TaxCut and other services that offshore your data, right? Not exactly.

The problem is grossly exacerbated by the fact that US Government-related organizations, like the RNC, have elected to offshore their data as well, including everything from donations to affiliation. And the government (as you can see with the Truth in Taxation hearings) doesn’t believe it needs to answer to We The People. That makes it even harder to enforce data collection and sharing laws imposed on corporations like H&R Block.

I guess it still boils down to the same simple solution from generations ago. Our nations founders believed that the further away from you the authority was placed, the less it could provide any local value. If you’re willing to let anyone – H&R Block, TaxCut, the RNC, or even Uncle Sam, collect information about you, our finances or your habits, you are giving them the opportunity to exploit you. And they will.