Current Events in February 2013

After posting a decline last month, the Conference Board's Consumer Confidence Index rebounded in February and now stands at 69.6 -- up from 1.2 from in January. The Present Situation Index increased to 63.3 from 56.2. The Expectations Index improved to 73.8 from 59.9 last month.

“Consumer Confidence rebounded in February as the shock effect caused by the fiscal cliff uncertainty and payroll tax cuts appears to have abated.” said Lynn Franco, director of economic indicators at The Conference Board. “Consumers’ assessment of current business and labor market conditions is more positive than last month. Looking ahead, consumers are cautiously optimistic about the outlook for business and labor market conditions. Income expectations, which had turned rather negative last month, have improved modestly.”

Present day improvement

Consumers’ assessment of present day conditions improved in February. Those claiming business conditions are “good” rose to 18.1 percent from 16.1 percent, while those stating business conditions are “bad” decreased to 27.8 percent from 28.4 percent.

Consumers’ appraisal of the labor market was mixed. Those saying jobs are “plentiful” increased to 10.5 percent from 8.5 percent, while those claiming jobs are “hard to get” edged up to 37.0 percent from 36.6 percent.

There was more optimism about the short-term outlook this month. Those expecting business conditions to improve over the next six months increased to 18.9 percent from 15.6 percent, while those expecting business conditions to worsen declined to 16.5 percent from 20.4 percent.

Jobs & income

Consumers’ outlook for the labor market was more positive. Those anticipating more jobs in the months ahead improved to 16.7 percent from 14.4 percent, while those expecting fewer jobs decreased to 21.5 percent from 26.7 percent.

The proportion of consumers expecting their incomes to increase rose to 15.7 percent from 13.5 percent, while those anticipating a decrease fell to 19.6 percent from 23.3 percent.

The monthly Consumer Confidence Survey, based on a probability-design random sample, is conducted for The Conference Board by Nielsen, a global provider of information and analytics around what consumers buy and watch. The cutoff date for the preliminary results was February 14.

New home sales got off to a roaring start for 2013 as prices wrapped up a strong 2012.

According to a joint report from the U.S. Census Bureau and the Department of Housing and Urban Development, sales of new single-family houses shot up 15.6 percent in January to a seasonally adjusted annual rate of 437,000. That rate is 28.9 percent above the same period a year ago.

Regional sales

The advances was broad-based, with every region of the country posting gains.

The West led the way, with sales up 45.3 percent. The Northeast posted a gain of 27.6 percent, followed by the Midwest with an advance of 11.1 percent and the South edging up 3.2 percent

The median sales price of new houses sold in January rose to $226,400 from $221,700 a year earlier. The average sales price was $286,300, compared with $265,700 in January 2012.

The seasonally adjusted estimate of new houses for sale at the end of January was 150,000 – representing a supply of 4.1 months at the current sales rate.

A strong 2012 for prices

A leading measure of U.S. home prices ended last year with strong gains.

The S&P/Case-Shiller Home Price national composite posted an increase of 7.3 percent for 2012. The 10- and 20-City Composites reported annual returns of 5.9 percent and 6.8 percent, respectively. Month-over-month, both the 10- and 20-City Composites moved into positive territory in December with gains of 0.2 percent more than reversing November’s losses.

In addition to the three composites, nineteen of the 20 MSAs posted positive year-over-year growth – only New York fell.

“Home prices ended 2012 with solid gains,” said David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices. “Housing and residential construction led the economy in the 2012 fourth quarter. In December’s report all three headline composites and 19 of the 20 cities gained over their levels of a year ago. Month-over-month, nine cities and both Composites posted positive monthly gains. Seasonally adjusted, there were no monthly declines across all 20 cities."

What is probably your biggest investment is worth a little more these days

The Federal Housing Finance Agency (FHFA) reports house prices rose 1.4 percent from the third quarter to the fourth quarter of 2012. The agency's seasonally adjusted purchase-only house price index HPI is calculated using home sales price information from Fannie Mae and Freddie Mac mortgages.

Seasonally adjusted house prices rose 5.5 percent from the fourth quarter of 2011 to the fourth quarter of 2012 and the seasonally adjusted monthly index for December was up 0.6 percent from November.

A strong quarter

“The fourth quarter was another strong one for house prices, as it was the third consecutive quarter where U.S. price growth exceeded one percent,” said FHFA Principal Economist Andrew Leventis. “While a significant number of homes remained in the foreclosure pipeline, the actual number of homes available for sale was very low and fell over the course of the quarter.”

While the national, purchase-only house price index rose 5.5 percent from the fourth quarter of 2011 to the fourth quarter of 2012, prices of other goods and services rose 1.7 percent over the same period. Accordingly, the inflation-adjusted price of homes rose approximately 3.7 percent over the latest year.

The FHFA report also found:

• The seasonally adjusted purchase-only HPI rose in the fourth quarter in 38 states and the District of Columbia.
• Of the nine census divisions, the Pacific division experienced the strongest increase in the latest quarter, posting a 4.2 percent price increase. House prices were weakest in the East North Central division, where prices remained unchanged from the prior quarter.
• As measured with purchase-only indexes for the 25 most populated metropolitan areas in the U.S., fourth quarter price increases were greatest in the Phoenix-Mesa-Glendale, AZ, Metropolitan Statistical Area (MSA). That area saw prices increase by 6.8 percent between the third and fourth quarters. Prices were weakest in the Edison-New Brunswick, NJ, metropolitan division, where they fell 0.8 percent over that period.
• The monthly seasonally adjusted purchase-only index for the U.S. has increased for 11 consecutive months.
• FHFA’s new “distress-free” house price index suggests that price gains in the latest quarter may be partially attributed to decreases in the share of distressed sales in the latest quarter. For 9 of the 12 metropolitan areas covered by the new set of indexes, the distress-free measures -- which remove the direct effect of short sales and sales of bank-owned properties -- showed more modest price gains than were evident in the traditional purchase-only indexes.

Hercules Tire & Rubber Company (Hercules Tire) is recalling Hercules ALL TRAC A/T 10-ply Load Range E tires, sizes:

• LT215/85R16 115/112S, DOT Serial Numbers JEHMECL5008-4010;
• LT235/85R16 120/116S, DOT Serial Numbers JEKMECL4708-4010;
• LT245/75R16 120/116S DOT Serial Numbers JEJKECL4608-4010;
• LT265/75R16 123/120S, DOT Serial Numbers JENKECL4808-4010;
• LT265/70R17 121/118S, DOT Serial Numbers JENJFCL5108-4010;
• LT245/75R17 121/118S, DOT Serial Numbers JELKFCL5008-4010; and
• LT225/75R16 115/112S, DOT Serial Numbers JEJKECL5108-4010.

These tires can experience in-service belt and tread separations. Should a separation occur, the driver could lose control of the vehicle without warning, which could increase the risk of a vehicle crash.

Hercules Tire will notify owners and replace the affected tires free of charge, including mounting and balancing. The recall is expected to begin during February 2013.

Owners may contact Hercules Tire at 1-888-965-5795 or by email at alltracresponse@HerculesTire.com for more information.

There will soon be less of a chance that a small child will die or be seriously injured in a play yard.

Beginning this Thursday (Feb. 28), manufacturers and importers of infant and toddler play yards are required to test their play yards to ensure that they meet new federal safety standards.

Play yards are framed enclosures with a floor and mesh or fabric side panels. Most can be folded for storage or travel.

New standards

Play yards that meet the new safety standard must have:

• Side rails that do not form a sharp V when the product is folded. This prevents a child from strangling in the side rail.
• Stronger corner brackets to prevent sharp-edged cracks and to prevent a side-rail collapse.
• Sturdier mattress attachments to the play yard floor to prevent children from getting trapped or hurt.

The new play yard standard is one of many safety standards that the Consumer Product Safety Commission (CPSC) has passed as part of the Danny Keysar Child Product Safety Notification Act, or “Danny’s Law.”

Danny Keysar was killed in Chicago in 1998 when a previously recalled play yard in which he was napping collapsed, suffocating him. This new play yard standard was completed in honor of Danny and his family.

Various product safety standards

In addition to the play yard safety standard, CPSC has issued mandatory safety standards for cribs, children’s bed rails, baby bath seats, baby walkers, infant swings and toddler beds.

CPSC staff is currently working on safety standards for bedside sleepers, hand-held infant carriers, bassinets, and bassinet attachments to play yards and will propose rules this year for strollers, soft infant carriers and infant slings.

If you use a play yard, keep it bare when you put your baby in it. Each year, CPSC receives reports of infant suffocation deaths. Some key causes of these deaths are the placement of pillows and thick quilts in a baby’s sleeping space and/or overcrowding in the space.

More information on how to put your baby to sleep safely can be found here.

Echoes of the Newtown Sandy Hook school tragedy are continuing to reverberate through the political atmosphere as politicians seek to shift some of the blame to violent video games, but scientists and even some high-ranking law-enforcement officials don't see the link. 

President Obama has called on the U.S. Centers for Disease Control and Prevention (CDC) to determine whether there's a link between violent video games and real-life violence.

In Connecticut, state Rep. Debralee Hovey, whose district includes the Newtown area, isn't waiting for the answer. She has introduced a bill that would impose a "10% sin tax" on violent video games.

But on CBS' Face the Nation yesterday, a former FBI profiler said she and her colleagues don't see the games as a cause of shootings and other violent crimes, although conceding that they may sometimes be use as a sort of planning tool for carrying out attacks. 

"We don't see these as the cause of violence," Mary Ellen O'Toole said. "We see them as sources of fueling ideation that's already there."

Junk science

Appearing on the panel with O'Toole was Christopher J. Ferguson, an associate professor at Texas A&M University, who cautioned that national panics over violent incidents "can create junk science on video games."

Coincidentally, a new report published by Ferguson in the American Psychological Association’s flagship journal American Psychologist discusses the history of video game violence research, how video game violence research became politicized and dogmatic and the risks for this research in the future. 

Stating that video game violence research has always been inconsistent and often limited by significant flaws, Ferguson's report charges that moral panics over mass homicides and historical patterns of culture war drove politicians, activists and some scholars to make extreme statements about the “harmfulness” of violent games that could not be supported by the actual data. 

Although written before the tragic Sandy Hook shooting, the report highlights the risks that calls for research following Sandy Hook may become politicized, possibly compromising the scientific process. 

"The risks moving forward are that these politicized calls for research may create a new wave of junk science that will only further damage the credibility of the field," Ferguson said.

NSF gets involved

It was just a few weeks ago that a Virginia congressman released a report by a National Science Foundation advisory committee that named violent video games as one of three major risk factors linked to mass shootings. The other two were mental illness and easy access to guns.

Rep. Frank Wolf (R-Va.), who had asked for the report and whose committee controls funding for scientific agencies, used the report to bludgeon President Obama for blaming gun violence on easy access to guns in his State of the Union Address.

"How can he in good conscience ... not acknowledge the fact that each one of the shooters in those events was mentally disturbed?  How could he not acknowledge the role that violent media played in some of their lives?" Wolf asked.

In a ConsumerAffairs guest column, Ferguson responded that the NSF report was "not credible." 

"It was a shame to see a credible group, the National Science Foundation (NSF), find its name attached to a report commissioned by a politician with a clear agenda that almost surgically avoided mentioning any research that conflicted with a highly ideological and alarmist view of media effects," Ferguson said.

He said the report "grossly misrepresents the field of video game violence."

Columbine set the stage  

In his American Psychologist article, Ferguson traces much of the anti-video game fever to the Columbine shootings. 

"In the political environment following the 1999 Columbine massacre some scholars made more and more extreme claims about violent media and games, and ultimately came to control policy statements made by the American Psychological Association and American Academy of Pediatrics," he said. 

"The result were policy statements that were filled with errors and omissions, and which continue to mislead the general public."

Ferguson's study calls for professional organizations and politicians to be more cautious and balanced in their approach to the topic in the future. 

So let's say you're one of those people who values privacy. You don't like being tracked around the Web. Maybe you don't like to buy things online because you think it helps marketers build a profile of you.

Well, see how you like this then. Facebook's latest bright idea is to let brands target ads to you based on what you've bought in stores, according to insiders quoted in Advertising Age.

So if this idea becomes reality and if you buy a lot of Diet Coke or order Nike running shoes frequently, you're liable to start seeing ads for Coke, Nike and related products when you're on Facebook.

How could anyone know all that about you? Well, you've heard of Big Data? Among other things, this term covers the massive amount of data that's constantly being collected and collated about individual consumers.

If you belong to a loyalty program at your local supermarket, for example, Big Data knows your shopping habits better than you do. And it's a relatively simple step to link that data up with your Facebook profile so that brands can keep a bead on you whenever you're logged in.

The process goes beyond tracking your favorite soft drink, though. Way beyond. Let's say you've started buying Pampers at your local Safeway recently.

Ah ha! A new parent, Big Data notes. This opens you up to all kinds of ads for baby care products and provides a pretty accurate timeline that tells marketers when your child hits age milestones so that ads can segue to products for toddlers instead of infants, and so on.

Slick, eh?

Of course not everyone thinks this is a good idea. Consumers generally say they don't like being profiled and don't like their web activities being logged. That alone may be enough to give pause to some brands, which  would prefer not to annoy consumers unnecessarily.

On the other hand, most marketers are pretty pragmatic and the truth is that very few consumers are going to take the trouble to find out which company is engaged in what ad-targeting practices and take their business elsewhere as a result.

There could also be some legal issues and possible run-ins with federal consumer protection agencies but for now, it's an idea that's likely to get serious attention over in the marketing department.

Big squishy cars -- you know, the kind Detroit used to make -- were frequently derided as living rooms on wheels. But that was then. Now, General Motors wants to make its cars and trucks more like smartphones on wheels.

GM says it will embed 4G LTE mobile broadband in most of its 2015  Chevrolet, Buick, GMC and Cadillac. AT&T will be supplying the bandwidth in the United States and Canada. No word yet on how this will work in other countries.

GM says data speeds will be up to 10 times faster than 3G and will be capable of supporting simultaneous voice and data connections, so the driver can be yakking on the phone while passengers watch TV in the back or catch up on the latest lottery numbers or ball scores.

Of course, this is being presented as a great convenience and safety accomplishment. You'll be able to get updated weather, learn about traffic congestion and road construction and so forth. 

On the other hand, talking on the phone, texting and fiddling with apps are already seen as major safety hazards.   A recent University of Alabama at Birmingham study found that more than a third (35%) of college students use mobile phone applications while driving.

"The participants seemed to understand that using mobile apps while driving is dangerous, and some have even experienced motor vehicle crashes while using mobile apps, but they continue to do it," said UAB student Lauren McCartney, who conducted the survey.

"The technology is evolving so rapidly that science hasn't caught up to looking at the effects that mobile app usage can have behind the wheel of a car," said McCartney. "But something needs to be done because in psychological terms, Internet use involves substantial cognitive and visual distraction that exceeds talking or texting, making it much more dangerous."

Many other studies have found that, regardless of whether cell phones and devices were handheld or hands-free, humans don't multitask well enough to drive and fiddle with their gadgets.

University of Utah psychologists found in 2010 that there is just a small group of people who have the extraordinary ability to multitask: Unlike 97.5 percent of those studied, they can drive safely while chatting on the phone.

These individuals -- described by the researchers as "supertaskers" - make up just 2.5 percent of the population. They are so-named for their ability to do two things at once successfully. In this case, they can talk on a cell phone while operating a driving simulator without noticeable impairment.

The study, conducted by psychologists Jason Watson and David Strayer, is to appear later this year in the journal Psychonomic Bulletin and Review .

OnStar portfolio

Could be, but there seems little chance carmakers and technology companies will retreat from their campaign to turn cars into something resembling a home entertainment center.

In GM's case, it says its plans build on OnStar’s existing portfolio of built-in connected services, first introduced in GM vehicles in 1996.

The built-in 4G LTE structure is specifically designed for in-vehicle use as it is integrated into the vehicle’s electrical system and includes an external antenna to maximize coverage and connectivity. Customers will not be required to have a smartphone to use connected services, GM said. 

“In addition to allowing consumers to bring in and connect to personal mobile devices, the vehicle will also act as its own mobile device, enabling embedded vehicle capabilities,” said Mary Chan, president, Global Connected Consumer, General Motors.  “Turning this vision into a reality starts with enabling fast, reliable and responsive connectivity within the vehicle.  Through this built-in 4G LTE connection we have the opportunity to reinvent the mobile experience inside a vehicle.” 

“While our 4G LTE network will provide fast, reliable mobile broadband for GM’s connected vehicles, we’re also looking forward to working directly with GM researchers and engineers as well as the developer community to invent new in-vehicle applications that will take full advantage of our powerful network,” said Ralph de la Vega, president and CEO, AT&T Mobility.

The National Highway Traffic Safety Administration says it will investigate problems with stalling and surging engines in nearly 725,000 Ford Escape and Mercury Mariner SUVs and Ford Fusion and Mercury Milan sedans from the 2009 through 2011 model years.

The most commonly-cited problem is aptly called the "limp home mode." It's the condition in which the car suddenly drops to 20 mph and about 900 rpms.

The function is built into the engine control system. It's supposed to be triggered only by a serious engine problem and is meant to allow the driver time to maneuver to a safe place before stopping.

ConsumerAffairs has been hearing about this problem too. Randy of Jacksonville, Fla., posted a complaint in January about his 2010 Ford Escape Limited. 

"On January 23, 2013, the engine shut down on the highway while going 65 mph. Was is in the middle lane but was able to nurse it to the shoulder," he said. "Turned it off and restarted. Ran fine for another 20 minutes and the engine shut down again. Restarted and made it to the house. Don't tell me that there is nothing wrong Ford!"

Katherine of Ellwood City, Pa., had a similar experience in her Ford Escape.

"I was driving on the highway about 65 mph when suddenly it lost acceleration and went to 20 mph. I was on a bridge at the time with no shoulder and coasted to the end of the bridge to pull over. I could see the cars behind me fearing I would get hit," she said. "When the tow truck arrived he checked under the hood and started the car back up with no problem. I was able to get home. I am very worried now after reading hundreds of incidents of this same occurrence! This is unsafe and I am very upset."

NHTSA said it has recorded 1,500 complaints about the problem, with three crashes and one injury so far.

Besides stalling, NHTSA siad the affected vehicles may also surge unexpectedly as the rpms increase to prevent stalling during limp mode.

An earlier throttle problem in the Ford Escape has been fixed, Ford said. It is not thought to be related to the stalling problem.

Drug overdose deaths increased for the 11th consecutive year in 2010, according to an analysis from the Centers for Disease Control and Prevention.

The research letter, “Pharmaceutical Overdose Deaths, United States, 2010,” published in the Journal of the American Medical Association (JAMA), shows that 38,329 people died from a drug overdose in the United States in 2010, compared with 37,004 deaths in 2009. This continues the steady rise in overdose deaths seen over the past 11 years, starting with 16,849 deaths in 1999.

Overdose deaths involving opioid analgesics -- things like oxycodone, hydrocodone and methadone -- have shown a similar increase. Starting with 4,030 deaths in 1999, the number of deaths increased to 15,597 in 2009 and 16,651 in 2010.

In 2010, nearly 60 percent of the drug overdose deaths (22,134) involved pharmaceutical drugs. Opioid analgesics were involved in about three of every four pharmaceutical overdose deaths (16,651), confirming the predominant role opioid analgesics play in drug overdose deaths.

CDC researchers analyzed data from CDC’s National Center for Health Statistics 2010 multiple cause-of-death file, which is based on death certificates.

Mental health related

The researchers also found that drugs often prescribed for mental health conditions were involved in a significant number of pharmaceutical overdose deaths. Benzodiazepines (anti-anxiety drugs) were involved in nearly 30 percent (6,497) of these deaths; antidepressants in 18 percent (3,889), and antipsychotic drugs in 6 percent (1,351). Deaths involving more than one drug or drug class are counted multiple times and therefore are not mutually exclusive.

“Patients with mental health or substance use disorders are at increased risk for nonmedical use and overdose from prescription painkillers as well as being prescribed high doses of these drugs,” said CDC Director Tom Frieden, M.D., M.P.H. “Appropriate screening, identification, and clinical management by health care providers are essential parts of both behavioral health and chronic pain management.”

Additional steps are being taken at the national, state and local levels, as well as by non-governmental organizations, to help prevent overdoses from prescription drugs.

Federal government action

In particular, the federal government is:

• Tracking prescription drug overdose trends to better understand the epidemic.
• Encouraging the development of abuse-deterrent opioid formulations and products that treat abuse and overdose.
• Educating health care providers and the public about prescription drug abuse and overdose.
• Requiring that manufacturers of extended-release and long-acting opioids make educational programs available to prescribers about the risks and benefits of opioid therapy, choosing patients appropriately, managing and monitoring patients, and counseling patients on the safe use of these drugs.
• Using opioid labeling as a tool to inform prescribers and patients about the approved uses of these medications.
• Developing, evaluating and promoting programs and policies shown to prevent prescription drug abuse and overdose, while making sure patients have access to safe, effective pain treatment.

State government action

Promising steps that many states are taking include:

• Starting or improving prescription drug monitoring programs, which are electronic databases that track all prescriptions for opioids in the state.
• Using prescription drug monitoring programs, public insurance programs, and workers’ compensation data to identify improper prescribing of opioids.
• Setting up programs for public insurance programs, workers’ compensation programs, and state-run health plans that identify and address improper patient use of opioids.
• Passing, enforcing and evaluating pill mill, doctor shopping and other state laws to reduce prescription opioid abuse.
• Encouraging state licensing boards to take action against inappropriate prescribing.
• Increasing access to substance abuse treatment.

More information about prescription drug overdoses in the United States is available here.  

Chrysler is recalling model year 2013 Chrysler 200 and Dodge Avenger vehicles manufactured from October 30, 2012, through November 2, 2012.

These vehicles may have a gas tank that has a broken control valve in the fuel tank assembly, which may lead to an engine stall or fuel leakage. An engine stall while driving could contribute to a vehicle crash. Fuel leakage in the presence of an ignition source may result in a fire.

Chrysler will notify owners, and dealers will inspect the fuel tank assembly and replace any affected control valves, free of charge. The recall is expected to begin during March 2013.

Owners may contact Chrysler at 1-800-247-9753.

Do you qualify for either of two college education tax credits or any of several other education-related tax benefits? Now might be a good time to check it out.

In general, the American opportunity tax credit, lifetime learning credit and tuition and fees deduction are available to taxpayers who pay qualifying expenses for an eligible student. Eligible students include the primary taxpayer, the taxpayer’s spouse or a dependent of the taxpayer.

Though a taxpayer often qualifies for more than one of these benefits, he or she can only claim one of them for a particular student in a particular year. The benefits are available to all taxpayers -- both those who itemize their deductions on Schedule A and those who claim a standard deduction. The credits are claimed on Form 8863 and the tuition and fees deduction is claimed on Form 8917.

Tax credit extension

The American Taxpayer Relief Act, enacted Jan. 2, 2013, extended the American opportunity tax credit for another five years until the end of 2017. The new law also retroactively extended the tuition and fees deduction, which had expired at the end of 2011, through 2013. The lifetime learning credit did not need to be extended because it was already a permanent part of the tax code.

For those eligible -- including most undergraduate students -- the American opportunity tax credit will yield the greatest tax savings. Alternatively, the lifetime learning credit should be considered by part-time students and those attending graduate school. For others, especially those who don’t qualify for either credit, the tuition and fees deduction may be the right choice.

All three benefits are available for students enrolled in an eligible college, university or vocational school, including both nonprofit and for-profit institutions. None of them can be claimed by a nonresident alien or married person filing a separate return. In most cases, dependents cannot claim these education benefits.

Normally, a student will receive a Form 1098-T from their institution by the end of January of the following year. This form will show information about tuition paid or billed along with other information. However, amounts shown on this form may differ from amounts taxpayers are eligible to claim for these tax benefits. Taxpayers should see the instructions to Forms 8863 and 8917 and Publication 970 for details on properly figuring allowable tax benefits.

American opportunity tax credit

Many of those eligible for the American opportunity tax credit qualify for the maximum annual credit of $2,500 per student. Here are some key features of the credit:

• The credit targets the first four years of post-secondary education, and a student must be enrolled at least half time. This means that expenses paid for a student who, as of the beginning of the tax year, has already completed the first four years of college do not qualify. Any student with a felony drug conviction also does not qualify.
• Tuition, required enrollment fees, books and other required course materials generally qualify. Other expenses, such as room and board, do not.
• The credit equals 100 percent of the first $2,000 spent and 25 percent of the next $2,000. That means the full $2,500 credit may be available to a taxpayer who pays $4,000 or more in qualified expenses for an eligible student.
• The full credit can only be claimed by taxpayers whose modified adjusted gross income (MAGI) is $80,000 or less. For married couples filing a joint return, the limit is $160,000. The credit is phased out for taxpayers with incomes above these levels. No credit can be claimed by joint filers whose MAGI is $180,000 or more and singles, heads of household and some widows and widowers whose MAGI is $90,000 or more.
• Forty percent of the American opportunity tax credit is refundable. This means that even people who owe no tax can get an annual payment of up to $1,000 for each eligible student. Other education-related credits and deductions do not provide a benefit to people who owe no tax.

Lifetime learning credit

The lifetime learning credit of up to $2,000 per tax return is available for both graduate and undergraduate students. Unlike the American opportunity tax credit, the limit on the lifetime learning credit applies to each tax return, rather than to each student. Though the half-time student requirement does not apply, the course of study must be either part of a post-secondary degree program or taken by the student to maintain or improve job skills. Other features of the credit include:

• Tuition and fees required for enrollment or attendance qualify as do other fees required for the course. Additional expenses do not.
• The credit equals 20 percent of the amount spent on eligible expenses across all students on the return. That means the full $2,000 credit is only available to a taxpayer who pays $10,000 or more in qualifying tuition and fees and has sufficient tax liability.
• Income limits are lower than under the American opportunity tax credit. For 2012, the full credit can be claimed by taxpayers whose MAGI is $52,000 or less. For married couples filing a joint return, the limit is $104,000. The credit is phased out for taxpayers with incomes above these levels. No credit can be claimed by joint filers whose MAGI is $124,000 or more and singles, heads of household and some widows and widowers whose MAGI is $62,000 or more.

Tuition and fees deduction

Like the lifetime learning credit, the tuition and fees deduction is available for all levels of post-secondary education, and the cost of one or more courses can qualify. The annual deduction limit is $4,000 for joint filers whose MAGI is $130,000 or less and other taxpayers whose MAGI is $65,000 or less. The deduction limit drops to $2,000 for couples whose MAGI exceeds $130,000 but is no more than $160,000, and other taxpayers whose MAGI exceeds $65,000 but is no more than $80,000.

Eligible parents and students can get the benefit of these provisions during the year by having less tax taken out of their paychecks. They can do this by filling out a new Form W-4, claiming additional withholding allowances, and giving it to their employer.

Other benefits

There are a variety of other education-related tax benefits that can help many taxpayers. They include:

• Scholarship and fellowship grants -- generally tax-free if used to pay for tuition, required enrollment fees, books and other course materials, but taxable if used for room, board, research, travel or other expenses.
• Student loan interest deduction of up to $2,500 per year.
• Savings bonds used to pay for college -- though income limits apply, interest is usually tax-free if bonds were purchased after 1989 by a taxpayer who, at time of purchase, was at least 24 years old.
• Qualified tuition programs, also called 529 plans, used by many families to prepay or save for a child’s college education.

Taxpayers with qualifying children who are students up to age 24 may be able to claim a dependent exemption and the earned income tax credit.

The general comparison table in Publication 970 can be a useful guide to taxpayers in determining eligibility for these benefits. Details can also be found in the Tax Benefits for Education Information Center.

Consumers are grumbling about record high gasoline prices for this time of year as prices at the pump have escalated for the third winter in a row.

This year's high prices are attributed to a variety of factors, ranging from ever-present worries about Middle East supply disruptions, market speculation and refinery maintenance.

While the higher prices are causing some pain for most consumers, it might come as a surprise to learn that not everyone thinks high gasoline prices are a bad thing. And it's not just people who don't own a car.

Sure thing

Let's start with the obvious – hedge fund traders. These days, the market sets the price of energy and traders analyze lots of data when placing a bet. While it is far from clear that these traders are manipulating the price – though many people think they are – it is clear they hope to make a lot of money from rising oil prices.

Think of it this way: once they take a long position in the crude oil futures market, they lose money if the price goes down. So naturally, they want the price to go up. A lot of money is riding on it.

After oil prices escalated for two straight Januaries, it was not unreasonable to believe prices could rise again this year. As money flows into the futures market for crude oil and gasoline, it has the same effect as when Wall Street is convinced that a hot stock is going to take off. It becomes a self-fulfilling prophecy as money chasing a finite commodity has the effect of bidding up the price.

So, who else isn't upset by rising gasoline prices? What about government officials?

Policymakers

True, you will never find a politician anywhere who will say they think high gasoline prices are a good thing. But four years ago future Energy Secretary Steven Chu came pretty close.

In late 2008, as the Obama Administration was preparing to take office, Energy Secretary-designate Chu candidly told the Wall Street Journal that "we have to figure out how to boost the price of gasoline to the levels in Europe" to encourage Americans to drive less and take mass transit more.

Since then Chu has walked back that statement. As recently as a March 2012 Congressional hearing he refused to say he is in favor of higher prices.

"I'm not trying to boost the price of gasoline," Chu told the committee. "Quite the opposite. I'm trying, as a scientist, to diversify the use of gasoline."

Regardless of Chu's views then or now, some other scientists do, in fact, believe it's time for consumers to get used to paying higher prices at the pump. Shanjun Li, an expert in energy consumer behavior and energy economics at Cornell, says there's just too much competition for oil.

Get used to it

“Gasoline prices at this level will be more and more common due to underlying market determinants, namely growing oil demand from emerging economies and stagnant production capacity,” Li said. “In other words, this is something that the consumer will have to get used to.”

Perhaps, but it is worth noting that no country's economy is setting the world on fire at the moment. In fact, the industrialized nations are doing well to keep their heads above water. Even China's economy has sputtered lately. One shudders to think how high crude oil and gasoline prices would be if the global economy were in the midst of a robust recovery.

But scientists like Li believe rising U.S. fuel prices, while painful to consumers, are environmentally beneficial in the long run.

“If we want to be serious about dealing with negative consequences associated with gasoline consumption such as pollution, high gasoline prices will be an important signal or leverage to induce consumer behavioral changes such as using more fuel-efficient vehicles or public transportation,” he said.

How to make gas prices go up

In February 2012 The Atlantic reported that environmentalists see high gas prices as a “helpful step” toward the development of alternative energy. The piece, which noted the government could push prices up by restricting future drilling, restricting imports and adding more regulations, drew some enthusiastic comments from readers.

“I am glad somebody wrote this,” wrote one poster identified as Josef_2. “Yes, higher prices are the natural outcome of where we are headed and are probably the only effective mechanism to change behavior at the consumer level, both in commuting and choosing which cars to buy - good! It would be better if we had a dollar a gallon gas tax.”

Consumers wondering why no one “does something” about high gasoline prices should consider this: There are a lot of people who may think nothing should be done.

Every year 12 million U.S. consumers take out a short-term payday loan. Most are faced with a financial emergency and plan to repay the money quickly. Most, however, quickly discover they can't.

"I fell on hard times and decided to take out a small payday loan," Tareeka, of Jackson, Miss., wrote in a ConsumerAffairs post. "The company loaned me $600.00. I already made a payment of $486.00 so far and still owe $812 and only borrowed $600. This is paying more then double back."

Tareeka's story is far from unusual. A new report from The Pew Charitable Trusts found the average payday loan requires a repayment of more than $400 two weeks later. The average borrower, the report says, can only afford to pay $50.

The question never asked

If borrowers stopped to think, they might see the trap. If they are short of money now -- requiring them to borrow -- how are they going to be able to pay the money back, plus fees, in just two weeks?

But when people are in desperate straits, they often don't think ahead. When two weeks go by and they are unable to repay the loan, they have no choice but to borrow more money, starting the cycle all over again.

"Payday loans are marketed as an appealing short-term option, but that does not reflect reality," said Nick Bourke, Pew's expert on small-dollar loans. "Paying them off in just two weeks is unaffordable for most borrowers, who become indebted long-term. The loans initially provide relief, but they become a hardship.

Few can pay on time

Pew researchers conducted a nationwide telephone survey of payday loan borrowers to compile their findings. They learned that only 14 percent of borrowers say they can afford to repay an average payday loan out of their monthly budgets. That means 86 percent have to take out a new loan two weeks later, paying an additional fee. The fee itself might not sound like much, but repeated over and over every two weeks, it can add up to a lot. Viewed as an annual percentage rate (APR), it's typically around 400% APR.

Many people who take out payday loans do so to avoid asking family and friends, or using other resources, to meet their emergency expense. The report found that ultimately they have to turn to these very same options to pay off the loans.

Forty-one percent need an outside cash infusion to eliminate payday loan debt– including getting help from friends or family, selling or pawning personal possessions, taking out another type of loan, or using a tax refund.

22,000 locations

Since its inception in the 1990s, the payday lending industry has established over 22,000 locations which originate an estimated $27 billion in annual loan volume, according to the Center for Responsible Lending (CLR), a consumer group that monitors U.S. lending practices. It maintains that repeated payday loans result in $3.5 billion in fees each year.

In recent years CLR has called attention to the fact that a few major banks have begun making payday loans. These banks, the group says, are making short-term loans with triple-digit interest rates, essentially duplicating the storefront payday businesses that routinely trap lower-income borrowers in long-term harmful debt.

A recent survey by the Federal Deposit Insurance Corporation (FDIC) shows that most banks offering small loans tend to give borrowers 90 days or more to repay, with an annualized interest rate of 36% or less.

Banks get into the act

By contrast, banks pushing payday loans charge annual interest rates in the triple digits. For a typical 10-day loan costing $10 for each $100 borrowed, the effective APR is 365%.

This type of lending by non-depository payday lenders -- meaning businesses that aren't banks -- is prohibited or significantly restricted in 19 states. In some cases, CRL says these big banks are undermining state laws by making payday loans even where they have been banned.

Payday loans remain a problem for low-income consumers, perhaps because there are almost no other credit options for payday loan customers. They often turn to payday loans because they can't get a credit card or bank loan.

Don't  be unbanked

What's the solution? Rather than imagining that government will ride to the rescue and crack down on payday lenders, low-income consumers need to explore their options ahead of time. Or, the borrow a slogan from the Boy Scouts, they need to be prepared.

Many low-income consumers don't have bank accounts. They may be paid in cash or they may simply take their paycheck to a local retailer to cash it. This is what is called being "unbanked" and the problem with it is that the consumer does not build a relationship with a financial organization that can provide credit on reasonable terms.

One reason for this is that commercial banks typically shun the working poor. A ConsumerAffairs reporter recently witnessed a telling incident at a Bank of America branch in Northern Virginia. A man dressed like a restaurant kitchen worker approached a teller and asked to cash his paycheck.   

"Sir, you come in every week and cash your paycheck," the teller snapped as a manager sauntered over. The consumer protested that he had a checking account at the bank.

"Yes, but you're not using it as a checking account. You just come in here and cash your paycheck each week," the manager interjected.

Words were exchanged and the affair ended with the bank closing the man's account and sending him back into the street with his uncashed paycheck.

Perhaps the best solution open to the kitchen worker and others like him is to find a local credit union -- a non-profit organization that offers checking, savings and loan services, often on better terms than banks.

At a credit union, just like a bank, the kitchen worker could arrange for direct deposit of his check and get a checking account and debit card that he could use for his regular expenses. 

Even though he might have to pay a few dollars a month, he would be building a relationship with the credit union that would at least give him a chance of getting a loan on reasonable terms when he needed one.

The Credit Union Lookup site will help you find credit unions in your area. Some credit unions are tightly restricted to certain groups -- such as employees of the local school district. But many others are more liberal in their membership requirements. As always, it pays to shop around.  

It seems in 2013 technology and health has become as common a pair as, say, e-commerce and social networking or mobile devices and online programming. As this partnership continues to grow, both health professionals and patients aren’t only excited about the life-saving possibilities, but many are also looking to see what other forms of medical technology will reach consumers in the years to come.

Certainly the marriage between technology and medicine isn’t a new one, since the two are the oldest of acquaintances, but what happens to be different compared to previous years is that a lot of the medical advancements have been marketed to the everyday consumer, as opposed to only being marketed to physicians, and a perfect example of this is the growing use of health apps that are used by millions of people every day.  

Like the Free Heart Rate Calculator for example, that’s compatible with iPhones, the iPad and Androids, and allows users to measure their heart rate while exercising, which can help determine one’s level of cardiac fitness.

The creators of the app say that while a person is jogging, exercising or doing any other physical activity, they can simply touch the screen of their device each time their heart beats, and they’ll be able to get an instant reading of their heart right there and then.

The screen of the app also has a colored meter that tells you how good or bad your heart rate is while exercising and whether your heart rate is that of an athlete, whether it’s considered excellent, good, average or whether your heart is being worked too hard.

Of course the Free Heart Rate Calculator isn’t supposed to take the place of you seeing your primary physician or a cardiologist, but it’s supposed to keep you in-the-know about your heart health and also get you in the habit of checking your heart rate to see if your numbers are where they're supposed to be.

EyeXam

Then there’s the EyeXam app that has multiple features, all imed at  keeping your peepers functioning properly.

On the app, users can conduct self-tests to determine if they have a condition like astigmatism or if they have a problem with color perception.

Users can also do a visual acuity tests to see if they have 20/20 vision or not.

People can also search for eye doctors in their area, read patient reviews of those eye doctors and even schedule appointments in real time. You can also check to see if your personal insurance will be accepted by an eye doctor and get electronic reminders to get eye tests, re-check your prescription or order contact lenses.

All in all, the EyeXam app is supposed to be your one-stop shop for everything related to eye care and also help remind you to see your eye doctor in the first place.

iTriage

Another cool health app is iTriage, which was created by two ER doctors so people can quickly determine what a pain or a sudden ailment may be.

So if you’re feeling sharp stomach pains and your body is developing a cold sweat, you can plug those symptoms into a search field and not only find out what may be causing the symptoms, but the app will also point you to the nearest place for treatment.

And depending on what the app diagnoses, it will let you know whether you need to go to the emergency room, an urgent care facility, a retail clinic, pharmacy, mental health clinic, imaging center, substance abuse clinic, or a community health center, and the app will even tell you what the average wait times in these places are.

Skimble

And for workout enthusiasts there’s Skimble, an app that almost serves as a personal exercise assistant where users can keep track of all of their workout routines -- whether it’s counting reps, documenting the amount of miles  jogged or keeping track of the amount of weight you bench-pressed.

The app also has a social media component where users can join other folks who use the app to share stories, discuss progress and encourage each other.

Basically, Skimble serves as an electronic reference guide so users can gauge how much or how little there workouts have changed over a course of time and people can also compare their results.

Users can also compete with other Skimble users to see who’s dropping the most weight, running the most miles or getting in the most physical activity overall, which can easily serve as a positive motivator.

See, sometimes technology can get in the way of good health by creating apps and gadgets that cause one to have a sedentary lifestyle, but more times than not, technology is truly the consumer's ally and will allow health professionals to know more about a particular condition and how to treat it. 

Furthermore, today’s technology is being marketed and sold to the everyday consumer, which is different from earlier years, when the news of medical advancements stayed confined to doctors, inventors and scientists.

Fortunately, we’re now living in a time when a person can simply download a piece of technology that can be potentially lifesaving, while also allowing consumers to have a little more control and knowledge about their personal health, which is always a wonderful thing.

From Friendster to MySpace, from Facebook to Twitter — when social networking sites popped on to the scene most people believed it would allow them to become, well, more social.

And although we were using our keyboards to communicate with each other and quickly got used to the idea of having virtual conversations, many of us believed those virtual conversations would eventually continue offline and our Facebook friends would potentially become our actual friends.

In short, many of us thought social networking would somehow impact our social lives in the real world or at least give them a slight boost.

And for some that was the case. 

Social networking actually did allow people to connect with old friends, establish new ones and take those relationships offline, but for the majority of us, social media has only caused more isolation and allowed many to be content with communicating solely through their computers instead of going to visit someone or having a day out with them.

1 billion users

Recently, Facebook announced it has over 1 billion active users, and if you consider the other millions of people using other social media pages like Twitter and Google Plus, it’s safe to say interacting with people through modern technology is an accepted form of communication.

In fact for many people, virtual communication is actually preferred because it's faster, more immediate and allows you to feel connected to a circle of people without ever having to leave your home, but now researchers are finding this growing amount of isolation through social media can actually become a health detriment.

According to researchers at Brigham Young University, having a low amount of physical social interaction could be as harmful to your health as smoking cigarettes or over-indulging in alcohol. More specifically, researchers said being an extreme homebody and cutting yourself off from your buddies has the same health risks as smoking 15 cigarettes a day.

“The modern way of life in industrialized countries is greatly reducing the quantity and quality of social relationships,” said the study authors.

"Many people in these countries no longer live in extended families or even near each other. Instead, they often live on the other side of the country or even across the world from their relatives. The idea that a lack of social relationships is a risk factor for death is still not widely recognized by health organizations and the public.”

Health effects

In their research, scientists looked at 148 different studies to gauge how often people interacted with others and how that interaction or lack of it affected their health throughout their lives.

The results showed those who were continually social and interacted with people away from their computers and mobile devices, were able to extend their lives considerably.

“People with stronger social relationships had a 50 percent increased likelihood of survival than those with weaker social relationships,” said the authors.

They also said that not being social and locking yourself indoors should be  discussed among the other established contributors to dying prematurely.

But how does one use social media less and get outside and connect with their actual friends more?

Many would say the first step is to dramatically lessen your Facebook, Twitter or Google Plus use, since the longer and more frequently these sites are used, the harder it will be to break away from them and go back to the traditional forms of communication.

No exit

But as many people can tell you, namely some of our readers, deactivating your Facebook account isn’t as easy as one might think.

“I have been trying to deactivate my account several times in the past month,” wrote Patricia of Minnetonka, Minn. in a ConsumerAffairs posting.

“When I get to the end to deactivate Facebook, it requires me to put the password in and every time I did, Facebook says that it’s the wrong password. So of course I carefully retype my password again and again, still it’s the wrong password. That is just wrong that Facebook can do that.”

Mona of Eunice, La. also had problems trying to close her Facebook account, and after she thought it was closed, she found out it was still being used.

“I closed my Facebook account in February,” she wrote. “Now I’m hearing that there’s a fake Facebook page using my info trying to scam people. Facebook is doing nothing. This is a serious matter. Someone is using my personal info and Facebook seems to think this is no big deal.”

But what is a big deal, say researchers, is the fact that using social media too much also leads to other problems like weight gain and even having a proper amount of self-control.

Body mass

According to research published in the Journal of Consumer Research, those who used their Facebook pages to stay in touch with close friends, had a higher body mass index than those people who didn’t.

And those same people who lacked the self-control to stay off Facebook also lacked self-control when it came to purchasing things, most likely online, and they also had more debt.

In the Brigham Young University study, which is now published in the recent edition of Plos Medicine, researchers said health professionals should really speak more about the connection between physical interaction and good health and the topic should be discussed just as much as smoking, lack of exercise and obesity.

“Physicians, health professionals, educators and the media should now acknowledge that social relationships influence the health outcomes of adults and should take social relationships as seriously as other risk factors that affect mortality,” said the Brigham Young researchers.