If you are like me, you probably put off filing your 2009 taxes. But with the deductions and credits that apply to buying a home and making energy efficient improvements, if you are a homeowner, you will want to get started now, rather than later, to make sure you receive all the tax breaks you have coming in 2010.
It’s important to note that a tax credit is generally more valuable than an equivalent tax deduction because a tax credit reduces the tax dollar-for-dollar, while a deduction only removes a percentage of the tax that is owed. For instance, if you can itemize energy-related purchases on your tax form, it will reduce the amount of tax you owe.
Hopefully my top 10 tax deductions and credits will help.
1. Energy Credits: President Obama’s American Recovery and Reinvestment Act reinstated federal tax credits for homeowners who make certain energy-efficient improvements like new doors, new windows, furnaces, heat pumps, hot water heaters, air conditioners, and more. The credit is up to 30% of the cost of installing such energy savers, up to a maximum credit of $1,500.
A larger credit is available for more ambitious projects especially ones where you generate your own power. For more information on which products qualify for credits, visit here.
2. First-Time Home Buyer credit: A home bought in 2009 may qualify for either an $8,000 or $6,500 credit. To qualify for the $8,000 credit you must not have owned a home for three years prior to buying a new house. The credit is up to 10% of the purchase price or up to a maximum credit of $8,000. For purchases after Nov. 6, 2009, no credit is allowed for homes that cost more than $800,000.
To qualify for the $6,500 credit, you must have lived in the same primary residence for five consecutive years over an eight-year period leading up to the purchase of a new home. The credit is 10% of the purchase price, up to $6,500.
3. Home-office deduction: The costs related to operating your primary workplace from your home are tax deductible. These costs include depreciation, utilities, and insurance for the portion of the home used for meeting with customers or for the primary place of business.
4. Points: Points paid to obtain a mortgage for the home are generally fully deductible, but not if you paid them as part of refinancing: in that case, you must deduct the points over the life of the loan.
5. Moving Expenses: If you moved for a new job that is 50 miles or more away than your old job was from your old home, you can deduct the expenses related to the cost of moving your family and household goods.
6. Rehab Credit: If your home is a designated landmark, you can claim a 20% tax credit for the renovations made within a two year period.
7. Rental Income: If the home was rented for 14 or fewer days when there was a major event in taking place in your town, like the Olympics, the income, regardless of the amount collected, is tax free.
8. Mortgage Interest credit: If you received a mortgage credit certificate from a governmental agency, you can claim a tax credit of up to $2,000.
9. Real Estate Taxes: You can deduct state and local real estate taxes paid during the year on any number of homes.
10. Roth IRA Payouts: The rules allow IRA Roth contributions to be withdrawn at any time without penalty, so this is a great tool to help save for a first home if you are a would-be home buyer. You can withdraw all the money deposited each year tax- and penalty-free. And, if the account is five years or older, you can withdraw the earnings tax-, and penalty-free too if you use them to help buy a first home.
Please note, there are more credits and deductions than the ones listed. To make sure you have not overlooked anything, or for help answering specific questions or any concerns about filing your taxes, I highly recommend working with a Certified Public Accountant. The money invested on an accountant will pay you back, either in the form of money saved from taking the appropriate credit or deduction, or by avoiding a penalty for incorrectly filing your return.
One would assume that energy lending is suffering. Lenders are not only lending less, but actually reducing average balances on credit cards, home equity loans, and lines of credit. In fact, the contrary is true – energy lending seems to be growing by leaps and bounds. Many people ask me why I believe energy finance is poised for explosive growth.
Here are my five reasons for this growth:
As credit is so difficult to obtain for any kind of project, the federal government is extremely focused on creating new loan programs, like energy finance, that expand credit in all sectors.
The credit crunch is forcing many in the energy efficiency community to reach out to new types of partners to create these loan programs. In the past, the efficiency community concentrated on developing partnerships with very large commercial banks for easier replication and escalation. The problem is that pilots require experimentation, a willingness to develop new processes and procedures, and, often, an assumption of added risk – elements that do not easily mesh with these large banks’ established lending platforms, especially for lending products, such as residential mortgages, that highly value routinization, efficiency, and standardization. The credit crunch has meant that smaller, mission-driven institutions, which are eager to pioneer new types of loan structures and quite adept at pulling in philanthropic partners to leverage public dollars, such as our colleagues in Portland, are now courted more routinely as partners.
An increasing number of states are legislatively mandating that utilities create on-bill financing mechanisms. As a result, utilities are being thrust into the finance business. Consequently, they are now more eager to develop partnerships, explore leveraging models, use their expertise in measurement and verification of savings, and, with contractor oversight, to develop effective energy lending programs.
The severe economic downturn, budgetary shortfalls at all levels of government, and growing discontent with government (and elected officials), puts a premium on programs that promote job growth, are revenue neutral, and are open to a wide swath of the electorate. Energy financing programs are among the few policy options that offer all of these elements.
The extreme run up in energy prices in 2007 and 2008 has altered perspectives on where future energy prices are headed. Most people now believe that energy prices will rise over time and that escalation will greatly outpace overall inflation. Indeed, rising costs for energy, like death and taxes, is now seen as one of the few certainties in life.
All of these reasons have thrust energy finance into the national spotlight and to much higher prominence in the financial services industry, especially if the Department of Energy is successful in its efforts to create a new secondary market for loans tied to residential energy efficiency improvements. Naysayers look out: energy finance is poised for growth.
Stephanie McHenry, president of ShoreBank’s Cleveland Banking region, recently spoke at the Cleveland City Club on community banks and the instrumental role they can play in leading an inclusive economic recovery. You may not know that since beginning work in Cleveland in 1994, ShoreBank has invested more than $300 million in Greater Cleveland neighborhoods for developing sustainable, residential and commercial properties and growing small businesses. Now is your change to learn more about Stephanie and our work in Cleveland.
An active board member, Stephanie serves on local governing bodies, including those of the Cleveland State University, and ideastream® (public radio and television). And in 2007 she was named one of Crain’s “Women of Note” and received a YWCA “Woman of Achievement” award in 2008.
Enjoy listening to her City Club presentation “Banking to Change the World: Creating Jobs and Empowering Communities” here. What are your thoughts on her presentation?
Times are tough all over. This month’s Atlantic Monthly magazine carries a thought provoking and thoroughly dispiriting article by Don Peck called, “How a New Jobless Era Will Transform America.” Peck quotes Kathryn Edin, who teaches public policy at Harvard, describing her recent research in South Philadelphia. “These white working-class communities—once strong, vibrant, proud communities, often organized around big industries—they’re just in terrible straits. The social fabric is just shredding. There’s little engagement in religious life, and the old civic organizations that people used to belong to are fading. Drugs have ravaged these communities, along with divorce, alcoholism, violence.” That’s an ugly picture, but the worst is yet to come. “I hang around these neighborhoods in South Philadelphia, and I think, ‘This is beginning to look like the black inner-city neighborhoods we’ve been studying for the past 20 years.’”
Edin’s comments unintentionally point out that many people have long-ago written off mostly-minority neighborhoods. Except, of course, the people who live in those neighborhoods. Despite the tremendous stresses of lost jobs, tumbling home values, and growing neglect from the larger community, the residents of the minority neighborhoods ShoreBank serves continue to care deeply.
The reason is that people in our communities can put down roots. Unlike in wealthy suburban areas, several generations can afford to live in the same neighborhood. There are few “For Sale” signs because homes are often passed on to the next generation, other relatives, or friends. There is a vibrancy and cohesion that ShoreBank recognized from the beginning and continues to value, and indeed, to rely on.
But, all the economic data—national, state, and local—lead inexorably to the same conclusion: the downturn has hit minorities much harder than white Americans. For blacks as a whole, this is not a recession, but a full-scale depression. As a general rule of thumb, the numbers show that, however bad things are for whites, they are twice as bad for blacks. However good things are for whites, they are half as good for blacks. The ramifications of racism live on.
“Do you know what I think? That main street is making a comeback back,” said my small-town Kansas-raised Dad – and he wasn’t referring to the economy. Triplepundit.com’s recent article Buy Local. Grow a Sustainable Economyagrees with my dad (and apparently many others). It states that “Evidence is growing that ‘going green’ is a community-centric economic mega trend that is creating revenue growth for businesses and meaningful local economic development.” But, is there room to buy local in our lives?
“Local” technically means “existing in or belonging to the area where you live, or to the area that you are talking about.” That includes corporate chains, which can provide more convenient, lower-cost familiar brands than local small business equivalents can. But to me, buying “local” means that the point of purchase is within three miles of my home and, if given the option, one considers or selects a small business over a corporate one. For many, that might be easier said than done for the following reasons:
It’s more expensive to shop locally. It might not cost as much as you might think. It costs approximately $150 per person per month to purchase the groceries listed on the government’s Thrifty Food Plan. A Digital Journal studysuggested that that same person would spend an extra $10.32 to eat locally. And don’t forget the transportation costs you can forego by staying within a three mile radius. You might even be able to leave your car at home and self-power your way there.
But my local store doesn’t carry (insert brand name). According to Susan Witt, Executive Director of the E.F. Schumacher Society, if consumers turn online or to a chain store for a certain product, it can actually help local businesses better identify and innovatively fill gaps in the market place. Remember, many new companies begans as small local businesses.
Big corporations already contribute a lot to my community. Great! But there is room for more. A case study by Civic Economics on Austin, Texas found “local merchants generate substantially greater economic impact than chain retailers.” The study revealed that if someone was to spend $100 at a chain, only $13 would be funneled back into the economy. However, if one spent $100 at a local business, about $45 would go back to fuel the economy. That is not to say we should depend solely on local businesses but rather that if we make room for small businesses, they might be able to better fuel our communities’ growth than a large store might.
There are only corporate chains in my neighborhood. Keep an eye out for and try a new small business if it opens in your neighborhood. You might be pleasantly surprised by what you find.
There really is no good reason to not try to buy local. ShoreBank is committed to developing small businesses in our communities. What are you doing to make room for local businesses?
Although landlords are ultimately responsible for a building’s energy efficiency, there are a number of steps which environmentally-friendly renters, some of whom pay their own utility bills, can take to reduce energy costs and consumption. So I am going to share with you some of the easy and convenient steps that we share with our ShoreBank customers and encourage building owners to pass along to their tenants.
*P.S. Many of the tips also apply to anyone owning or inhabiting a home, apartment, or condo.
1. Turn off unused lights and computers and replace incandescent light bulbs with compact fluorescent bulbs (CFLs).
2. Caulk and weather-strip windows and outside doors. For older windows, place a sheet of plastic over them and use two-way tape to affix it. The greatest source of heat loss in a home comes from the windows.
3. Remember to use the storm windows which help insulate the home and keep heat inside it.
4. Keep your drapes open in the winter to let sunlight naturally warm the room and home. And in the summer, keep them closed to prevent the place from getting too warm.
5. For each degree lower or higher you set the thermostat, you will save potentially two to 10 percent on heating or cooling costs. In the winter, keep the temperature set at 68 degrees during the day and 55 in the evening. Wearing a sweater or layered clothing will make the temperature more tolerable, especially on days when the bill arrives in the mail.
6. Clean the coils on the back of the refrigerators which contribute to about 15 percent of the total monthly electrical bill. This can help persuade your landlord to finally get around to replacing the old one with an ENERGY STAR model.
7. Get an electric blanket. Besides the joy and comfort that comes from getting into a bed at night with warm sheets, it is less expensive than heating your bedroom.
8. Move your furniture away from the exterior walls to create space between you and the cold walls. This will make space for the air to move around, making the air warmer.
9. Keep your radiator and heating vents clean from dust. Dust and dirt prevents heat from flowing into the rooms where you need it. It’s “no fun” to clean, but being cold and paying more for it can be even more painful.
10. Select ENERGY STAR appliances and products, and check efficiency ratings prior to purchasing.
Whether you own or rent, energy efficiency is everyone’s concern. Please share this information with friends, family and / or your landlord. It might even help some renters get a faster response to a lingering maintenance issue when the building owner understands how it will reduce their monthly costs while adding comfort and value to the property.
In fact many of the improvements are eligible for tax deductions and may help lower income taxes. With the April tax deadline fast approaching, I will explore the tax benefits of buying a home and incorporating energy saving improvements in your 2009 tax return in my next blog entry.
Energy finance is clearly a hot topic if a panel on the subject at the Midwest Energy Efficiency Alliance annual conference has an overflow crowd. In years past, the topic might have garnered a couple of dozen of attendees and not the capacity crowd seen last month.
Panelists who were representing a wide array of energy efficiency financing models – from Property Assessed Clean Energy programs (PACE), to on-bill financing options, to governmentally supported private and public financing efforts – illuminated similarities among the programs. These similarities offer the following important lessons for financing programs targeting the residential sector:
1. No model fits all areas. Because no one financing option is perfectly suited for all geographies, incomes, and housing types, a variety models is needed. For instance, although the PACE model is likely to prove quite helpful for many localities, this model may not be feasible for a municipality with elevated levels of foreclosure or a very low tax base, or for one teetering on bankruptcy. Likewise, an on-bill financing program that relies solely upon a utility’s coffers to fund the loans may have too small a capital base to cover a meaningful portion of the units in the utility’s territory. This problem is particularly acute for dense urban areas, such as Chicago, where the capital need is conservatively estimated to be in the billions.
2. Tie the financing to the property or meter. If utility savings are the source of repayment of the loan, the financing should be tied to the property or meter. Otherwise, depending upon the timing of the sale or move, the savings could fall well short of what is needed for repayment, leaving the homeowner or renter to fund the difference. However, equally important, if the financing remains in place after the initial owner or tenant leaves, the improvements should be limited to ones that are not easily removed, such as air-sealing, insulation, HVAC systems, and windows, which will continue to generate savings well after the original owner departs.
3. New sources of liquidity are entering the field. Development Finance Organizations (DFOs), in particular, could represent an important new source of liquidity for energy finance programs. DFOs are public finance entities capable of issuing bonds to support public purpose projects. A development finance entity, for instance, could potentially issue bonds to provide the capital for an on-bill financing program, thereby lessening the need for the utility to find the funds internally or to have to borrow them directly.
As the number of energy finance pilots grows and diversity of program types multiplies, there is an acute need for dialogue among the practitioners about lessons learned, limitations for other locales, and opportunities for collaboration. I applaud the Midwest Energy Efficiency Alliance for beginning this critical conversation.
The American Recovery and Reinvestment Act may have great potential for economic boosting, but we cannot depend upon it to drive new jobs. The federal government website www.recovery.gov provides detailed information on how the $787 billion of American Recovery and Reinvestment Act funds are being distributed. As of January 22, the government has paid out $268.8 billion in the form of tax benefits ($92.8 billion), contracts, grants, and loans ($73.2 billion), and entitlements ($102.8 billion). Data on the recipients of stimulus funds is broken down by sub-units as small as zip codes.
ShoreBank’s oldest location is in the heart of the South Shore neighborhood in zip code 60649, where unemployment is more than 20% and home values have declined by more than 40% in one year. A total of just one contract and one grant have been awarded in this zip code. The contract was for $1,800 to H L Jackson Consulting Company to review grant applications. The grant was for $200,000 to an organization called Featherfist to provide services to the homeless. That $200,000 is part of a larger $34 million grant to the City of Chicago which in turn created just 60 jobs, although none at Featherfist.
Based on aggregate data from recipients, 599,108 American workers were being paid by stimulus funds in the fourth quarter of 2009. This seems like a pathetically small number, with more than 15 million Americans unemployed. But it merely underlines what should be obvious: government does not have the capacity to be the primary job creator. Government primes the pump, but the private sector does the work.
Recent reports on Gross Domestic Product growth and strengthening activity in manufacturing are the real signs of progress. GDP surged 5.7% in the fourth quarter, fueled by gains in business spending on software and equipment. Manufacturing activity in January expanded for the sixth consecutive month and manufacturing industry employment is projected to increase in the months ahead. Employment is already growing in fields as diverse as textiles, petroleum & coal products, and transportation equipment. Hopefully, it won’t be too long until job growth returns to 60649 and beyond.
Am I the only one who finds it odd that my friend’s condo door doesn’t have a peephole? I do not want to have to look out a side window to identify the solicitor at my door. But, isn’t that exactly how giving through social media feels? Now, don’t get me wrong, I think it is great that the internet has revolutionized and accelerated online giving. The Red Cross has thus far raised over $21 million in $10 text donations for Haiti (and I hope there is more to come!); all nonprofits raised $4 million in the entirety of 2009. But, a reported 4,000 scam sites, disguised as nonprofit relief organizations, arose to take a cut of online donations to Hurricane Katrina. Social media makes it easy to give and hard to identity fakes. With Americans having already donated $150 million online (out of the total $300 million) to Haiti, I don’t want to see this giving trend mitigated by fear of cons. Here are a few social media reminders that will help.
Always check for ID. BBB Wise Giving provides a few tips on verifying online nonprofits. First, look for ID verification, such as a verified badge on Twitter. Second, find out if the nonprofit relief organization has an on-the-ground presence in the impacted areas. Third, find out if the nonprofit relief organization is providing direct aid. Fourth, rely on expert opinions. And, finally, when in doubt, go with the one you know or just give offline.
Beware of geeks bearing gifts. Just because you have been invited to use a Facebook application or have received a link from a friend doesn’t mean you have to open it! More than once I have received an email from a friend that warns not to click any link from previous emails because of its malicious intent. If something looks odd, it is better to get confirmation from your friend that she is the sender rather than to just open the link.
Limit your social networks. Would you invite your 5,000 Facebook friends to a house party? Most likely you would not. The greater your social network, the greater the likelihood that one of your friends or an evil doppelganger could send you a malicious link that could scrape critical logins and passwords or infect your computer with a nasty virus. Know who your friends are and keep them limited to 600.
Lengthen abbreviations. Bit.ly and Tiny URL are fantastic ways to shorten URLs to fit character limitations. But they are also creative solutions to mask malevolent web addresses. Protect yourself by installing an add-on that will display the full URL. When clicking on links, longer is better than shorter.
As we continue to maximize the profoundly good impact that social media creates, to paraphrase the film Home Alone, our social media profiles are our homes, we have to protect them so we can continue to make them safe havens for giving.
Guest Contributor: Stephen Jacob, AVP, Credit Analysis
Haiti is not some far away place to me. Both my parents are from Haiti and I have family members that still live there. I try to go to Haiti every 2 to 3 years and last visited in 2007 to volunteer with a local organization called Concerned Haitian Americans of Illinois (CHAI). I have seen a mix of improving and deteriorating conditions in the country over the past 10 years, but this recent crisis is a wake up call.
Much of the devastation in Haiti was largely unavoidable. Even if the buildings had been constructed better, it is unlikely any well made structures could survive a 7.0 earthquake[1]. Nonetheless, lax building code enforcement and poor construction quality has exacerbated the problem. For example, in 2008 there was a school collapse in Port-au-Prince that had nothing to do with the earthquake. However, some of the lack of communications and access to roads to help disaster victims can be attributed to a very poor and deteriorating infrastructure. The rush to make sure that those in need get emergency medical attention, clean water, and food, should compel us to think about making sustainable improvements to not only prevent future crises but also to create new economic opportunities that improves the quality of life for Haitians.
Immediately after the disaster there will be an opportunity to rebuild – to begin anew—creating the infrastructure designed to sustain a modern country. In recent months, there have been initiatives to reduce the time it takes to incorporate a business. According to the World Bank, it requires 13 procedures, takes 195 days, and costs 227.93% GNI per capita to start a business in Haiti – this is almost unheard of. Across the border in the Dominican Republic, it requires only 8 procedures, takes 19 days, and costs 17.3% GNI per capita to start a business. Along each of the World Bank’s indices of access to business credit and protection of investors, Haiti is in the bottom of the rankings[2]. Haiti is one of the most difficult countries in the world to do business with—this needs to change if there’s ever to be any hope for catalyzing the development that can begin to transform the country and improve peoples’ lives.
In addition, the average Haitian, no different than most, needs to be gainfully employed in order to provide for his or her family and businesses need either debt or savings to get off the ground. But with the unemployment rate hovering around 50% for the last two decades, gainful employment will require greater foreign direct investment and a growing economy. A long-term solution requires investment in both the country’s physical infrastructure (e.g., roads, ports, and telecommunications) and its social infrastructure (e.g., improved school system, reform of a standing army or national police force, and protection of property rights). Without this investment and the ability to provide access to credit, Haiti will continue to be mired in poverty.
Many friends and colleagues have been asking me how to help. In the near term, money is the best thing to send because Haiti is a logistical nightmare, (especially today). And, if you donate, please do your homework to ensure your donation goes to a reputable organization who will put your fiscal aid to good use in Haiti. I am donating to the Concerned Haitian Americans of Illinois, but I am listing a few other very worthwhile organizations for you to consider making a contribution.
[1] To put things in perspective, the 1989 San Francisco earthquake measured 6.9 on the Richter Scale.
[2] The complete report is available at http://www.doingbusiness.org/Documents/CountryProfiles/HTI.pdf
If you are like me, you probably put off filing your 2009 taxes. But with the deductions and credits that apply to buying a home and making energy efficient improvements, if you are a homeowner, you will want to get started now, rather than later, to make sure you receive all the tax breaks you have coming in 2010.
It’s important to note that a tax credit is generally more valuable than an equivalent tax deduction because a tax credit reduces the tax dollar-for-dollar, while a deduction only removes a percentage of the tax that is owed. For instance, if you can itemize energy-related purchases on your tax form, it will reduce the amount of tax you owe.
One would assume that energy lending is suffering. Lenders are not only lending less, but actually reducing average balances on credit cards, home equity loans, and lines of credit. In fact, the contrary is true – energy lending seems to be growing by leaps and bounds. Many people ask me why I believe energy finance is poised for explosive growth.
An increasing number of states are legislatively mandating that utilities create on-bill financing mechanisms. As a result, utilities are being thrust into the finance business. Consequently, they are now more eager to develop partnerships, explore leveraging models, use their expertise in measurement and verification of savings, and, with contractor oversight, to develop effective energy lending programs.
Times are tough all over. This month’s Atlantic Monthly magazine carries a thought provoking and thoroughly dispiriting article by Don Peck called, “How a New Jobless Era Will Transform America.” Peck quotes Kathryn Edin, who teaches public policy at Harvard, describing her recent research in South Philadelphia. “These white working-class communities—once strong, vibrant, proud communities, often organized around big industries—they’re just in terrible straits. The social fabric is just shredding. There’s little engagement in religious life, and the old civic organizations that people used to belong to are fading. Drugs have ravaged these communities, along with divorce, alcoholism, violence.” That’s an ugly picture, but the worst is yet to come. “I hang around these neighborhoods in South Philadelphia, and I think, ‘This is beginning to look like the black inner-city neighborhoods we’ve been studying for the past 20 years.’”
Edin’s comments unintentionally point out that many people have long-ago written off mostly-minority neighborhoods. Except, of course, the people who live in those neighborhoods. Despite the tremendous stresses of lost jobs, tumbling home values, and growing neglect from the larger community, the residents of the minority neighborhoods ShoreBank serves continue to care deeply.
“Do you know what I think? That main street is making a comeback back,” said my small-town Kansas-raised Dad – and he wasn’t referring to the economy. Triplepundit.com’s recent article 
But my local store doesn’t carry (insert brand name). According to Susan Witt, Executive Director of the E.F. Schumacher Society, if consumers turn online or to a chain store for a certain product, it can actually help local businesses better identify and innovatively fill gaps in the market place. Remember, many new companies begans as small local businesses.
5. For each degree lower or higher you set the thermostat, you will save potentially two to 10 percent on heating or cooling costs. In the winter, keep the temperature set at 68 degrees during the day and 55 in the evening. Wearing a sweater or layered clothing will make the temperature more tolerable, especially on days when the bill arrives in the mail.
3. 
Based on aggregate data from recipients, 599,108 American workers were being paid by stimulus funds in the fourth quarter of 2009. This seems like a pathetically small number, with more than 15 million Americans unemployed. But it merely underlines what should be obvious: government does not have the capacity to be the primary job creator. Government primes the pump, but the private sector does the work.
Beware of geeks bearing gifts. Just because you have been invited to use a Facebook application or have received a link from a friend doesn’t mean you have to open it! More than once I have received an email from a friend that warns not to click any link from previous emails because of its malicious intent. If something looks odd, it is better to get confirmation from your friend that she is the sender rather than to just open the link.
Haiti is not some far away place to me. Both my parents are from Haiti and I have family members that still live there. I try to go to Haiti every 2 to 3 years and last visited in 2007 to volunteer with a local organization called Concerned Haitian Americans of Illinois (CHAI). I have seen a mix of improving and deteriorating conditions in the country over the past 10 years, but this recent crisis is a wake up call.
In addition, the average Haitian, no different than most, needs to be gainfully employed in order to provide for his or her family and businesses need either debt or savings to get off the ground. But with the unemployment rate hovering around 50% for the last two decades, gainful employment will require greater foreign direct investment and a growing economy. A long-term solution requires investment in both the country’s physical infrastructure (e.g., roads, ports, and telecommunications) and its social infrastructure (e.g., improved school system, reform of a standing army or national police force, and protection of property rights). Without this investment and the ability to provide access to credit, Haiti will continue to be mired in poverty.