Showing posts with label entitlements. Show all posts
Showing posts with label entitlements. Show all posts

Tuesday, November 13, 2012

Quote of the Day

"I may be heartless for saying that it is morally repugnant to require the healthy and fit to pay for the sick, lame or lazy (to be honest I really don't mind paying for the sick and the lame, but the lazy really get my goat)."
-American Mercenary

The rest of the post is as thoughtful and valid as everything else AM writes so check it out.

I couldn't have said it better myself. Personally I don't mind helping out folks with serious medical problems who are no longer able to hold down a job with the understanding that if circumstances put me in that place I will in turn be helped. The way to do this currently via social security disability insurance (vs the retirement side) and whatnot isn't how I would prefer (large coop style disability pools maybe?) but that is relatively minor in the grand scheme of things. Also I do not mind folks are trying to work but can't or having a really bad month getting some stop gap help though I do prefer it to come from families, churches, food banks and various other various non government entities. 

On the other hand as with AM being forced to pay for reasonably able bodied (most jobs these days do not require the ability to do 18th century farm labor or be an infantryman) who simply choose not to work really bothers me for a lot of reasons. It is a terrible combination of theft and social engineering. Also more importantly people respond to incentives. Fear of being broke then eventually hungry as well as probably homeless is a heck of a motivator to get and keep a job, run a small business or whatever. It has worked to keep most people generally on the right path for a very long time. By subsidizing laziness and lack of the most basic sort of motivation we make this behavior less painful than it would otherwise be and thus naturally more of it occurs. By (arguably) trying to look out for people we are in fact making their lives worse.

Well those are my thoughts on that. 

Friday, April 13, 2012

Friday Night Ramblings and Tab Clearing

I always knew that liberal dudes were weaker and generally less masculine but now there is scientific proof.

Apparantly CNBN did a hit piece of the venerable Remington 870. Hat tip to The Firearms Blog for the find. Maybe they could have been even more unamerican by bashing apple pie and cold beer.
Now for my take. I will even set aside the fact that the so called experts who testify about how pretty much every firearm is unsafe FOR MONEY and are trying to sell some new safety thing they invented.

The thing is that shotgun safeties, to the best of my knowledge are not so much safeties as trigger stoppers. To the best of my knowledge there isn't a shotgun out there that has a safety which blocks the sort of accidental impact based discharge that happened to the unfortunate fellow mentioned in the story. Sort of like many open bolt machine guns if you give them a good whack they will probably go off.

There is a simple and time tested way to handle this mechanical weakness. KEEP THE CHAMBER EMPTY UNLESS YOU ARE ACTIVELY USING THE GUN! For a shotgun this means that when you are done using it take the round out of the cylinder and stick it back into the tube or buttstock carrier.
I own a Remington 870 Express. With both short and long barrels it is a really versatile weapon equally capable of defending ones home or all manner of hunting and sporting. I have trusted it with my life in the past as a primary home defense weapon and would not hesitate to do so again in the future. As to my thoughts on reliability and usefullness the Remington 870 I won't sell the one I have and at some point will get another one.

I was at the store the other day picking up a couple things on my way home from work. The folks in front of me bought some stuff using WIC. Nothing really new about that. Overseas food costs are pretty high so they calculate eligibility differently and a lot more folks get it. I bought my few items and walked out to the parking lot. The folks who bought the stuff with WIC in front of me got into a car that was maybe a year old. Nothing crazy, I think it was a Ford Focus or something like that. I got into my 10 year old SUV with some minor cosmetic damage and drove home. Honestly it sort of made me angry. Why should I be subsidizing them? If they don't make very much money maybe they should be doing things like not buying new cars so they can afford food for their kids. I got to thinking. Given the state of our nation I don't really look down on folks who figure out how to work the system a bit in their favor. A few years back I did look down on them for being moochers. These days I sort of look at it that if you can get a little bit back it isn't a bad thing.
Ironically this year we qualify for welfare Earned Income Credit. A nuance of combat deployments is that since our pay is not taxed. Thus as far as my taxes are concerned it does not count. Since I deployed in February and was gone for a year our taxable income was pretty tiny for last year. Thus we get welfare Earned Income Credit. I wouldn't have thought of it but a pretty sharp contractor (ironically also a contrarian investor and survivalist) said I should look into it. This is something I had some real internal conflict about. It is pretty crazy that we qualify because my income fell into a different column on the stupid little piece of paper that is the W2. I make a decent living and we aren't in any sort of need. However me deciding to be a good guy and turning away free money is not going to fix the national deficit. We are putting the money into our house fund. I kind of look at it as a partial refund of all that money I put into SS and medicare
The man who committed 10 felonies in 9 hours was pretty impressive. Some folks are just bad and if this sort of thing happens when everything is normal toss in a power outage or a hurricane or a riot and well, it ain't pretty.

Well it is just about a done deal that Mitt Romney is going to be the Republican presidential candidate. I am almost entirely ambivalent about this. Got to purchase some more mags between now and November.
Heineken is pretty good and Jimmy Fallon probably has the best late night TV show these days.

That is all.

Thursday, February 17, 2011

Entitlements and Gender Roles; Alternate Title How To Upset Every Reader In A Single Post

This morning I was able to watch the news while doing some cardio which is something I enjoy now and then. The topic of entitlements was big this morning on the news. It has become abundantly clear to me that, even in this typically open and rational venue entitlements are a topic on which a rational conversation cannot be had.

We are at or past the point where it is becoming abundantly clear to any rational person that the numbers do not work. Unfortunately we are long past the point where there are easy, gradual and relatively painless options to make them work. The window in which there are viable options with only moderately painful and economically damaging outcomes is probably closing fast. I fear that by the time we are willing to make genuine moves to deal with this problem things will be at the point where there are few, if any (likely just choosing who gets the shortest end) choices left. You would be well advised to think about how this could play out and prepare for what you see coming.

Patrice over at Rural Revolution has been talking about gender roles for awhile. It is my observation that pretty much everyone wants to pick and choose among different traits to get some sort of a hybrid that suits their desires. The normal life part of this is just finding a mate that suits us and figuring out a division of labor that suits both parties. However sometimes the hypocrisy is so problematic or blatant that it is worth talking about. It pretty much goes without saying that feminists think they should be able to do whatever they want but men should act in certain ceremonal ways. For example I would wager a hundred dollars that if I was in a car driving down the highway with four feminists on a cold stormy night and a tire blew out it's this guy that would change it. Furthermore if my feminist buddies and I got to our destination, went to sleep and woke up at 3am to a wierd loud noise in the living room I bet it would be me going to investigate. Now it is time to take a crack at us guys.

Many men want to have our cake and eat it too. We live a lifestyle (wives do of course have a role in this too) that requires most women to work full time outside of the home but still expect them to be homemakers. Somehow they are supposed to keep the house clean and tidy as well as cooking dinner and numerous other tasks. We wonder why the house is a bit messy, dinner is some pre packaged junk and kids are poorly behaved. The answer is that instead of taking care of that stuff, cooking a good meal and raising kids they are at work and kids are in daycare 50 hours a week.

If there is anybody I haven't upset just know your state smells bad and the local sports team is a bunch of whimps.

Have a good day

Monday, January 31, 2011

RE: Retirement Fun-for Boomers and Beyond

Mayberry said:

Ryan, Yep, the division/diversion campaigns have worked very well. You are still in bed with the system, therefore you lash out at those who've done nothing more than start to collect on that which they paid into their entire career. Your diatribe is best directed at the criminals who 1) created the Ponzi scheme to begin with, and 2) stole from the "trust fund" for decades, and 3) made promises to pay ever increasing "benefits" from that fund, knowing full well there was not enough money to cover those promises. For no other reason than selfish political gain...

But those truths seem to be lost on the right wing crowd, who have no problem forking billions into illegal wars of imperial aggression, while screaming for SS beneficiaries to have their funds cut.

SS is not "welfare". It WAS a retirement program, which, by the way, was (is) FORCED upon us working stiffs by nanny.gov, and has been aborted beyond it's original intent by criminal politicians. Do I like it? No. Do I want it? No. But I've been forced to pay into it for 20 years now, and like all the others who've paid, I damn sure expect to get back what I've put in, with INTEREST.

Will it be my sole retirement income? No. Hell, I doubt I'll ever be able to retire. But do I want to see my 80 year old Grandmother's SS go away? Hell NO! That, and a small pension from my Grandpa is all she's got.

Now to address you on your Dave Ramsey high horse: MAYBE if SS was not extracted from our pay by the barrel of a gun, folks could have planned better for their retirement. But they suck a hell of a big chunk of cash from our pay, reducing our ability to plan and save for ourselves. So maybe you want to rethink your "welfare" position. Maybe you want to open your eyes and SEE that the government WANTS people dependent on them. It's a self preservation thing you know. Most people, yourself included, refuse to recognize that little fact. Chew on that for a while...

TOR here:

Mayberry, You've got it twisted. Maybe I wasn't as clear as I could have been anyway moving on.

First and most importantly I am not looking at what I want to happen but what I see happening. The combination of impossible numbers/ demographics and changing political power situations will make drastic changes unavoidable. I know old ladies who rely on SS to live also and don't think it would be desirable in any way to change the income they depend on.

If I was the King of America (a hypothetical situation where I had wide sweeping powers to fix entitlements and such) here is what I would do. I would sit down with a bunch of economists and actuaries and such. We would figure out how much money is needed to pay for those collecting or about to collect SS benefits. The unfunded obligation would have to come from somewhere, really a whole bunch of places. Foreign aid, agricultural subsidies, and defense (foreign wars, bases and cushy defense contracts) are likely candidates.

As for figuring where exactly to draw the line for who would get SS benefits that is a toughy. We would have to look at what we could actually afford and balance that with an individuals ability to adjust their retirement plans (ie a 55 year old doesn't have a lot of time while a 30 year old does). I would like to say we could offer some sort of benefit to those in their early to mid 40's but imagine the numbers will actually support SS benefits for those in their  late 40's or even early 50's. Maybe some sort of individual retirement fund type thing with some money could be done for people who we can't fund SS for but will be seriously affected by this move.
 
As for if entitlements are welfare. I tend to classify entitlements as welfare because, despite forced contributions, the money that comes in (even if you factor out the money pulled into the general fund) doesn't equal the money going out. I don't think anyone can actually believe the money they pay into medicare covers the free market cost of insuring them through the most expensive years of their life. SSI paying widows and children vastly beyond what a wage earner may have made, let alone contributed is IMO welfare. Social Security minus SSI is a bit more  complicated. We would have to do some research and look at all kinds of tables, charts, etc. However lets say we had all that stuff and were sitting around in a nice quiet bar. I would wager the next round of drinks that some people, most likely low income ones who just made the required number of quarters, receive a payout that is dispurportionately generous when compared to what others receive. Maybe welfare is a poor word because it has a lot of stigma attached to it. Anyway lets focus less on one word and more on the big picture.
 
As for blame. There is so much to go around that most everybody can take a nice big bite. I blame the politicians who created the stupid program as well as the people who voted them in. Most of the folks meaningfully involved in that stuff are long dead. I don't blame individuals collecting Social Security because they are just doing what normal reasonable people would do. That would be like blaming a bank teller because a bunch of CEO's got the bank into mortgage backed security madness.

I am young enough that I've been paying in my whole working life knowing I will never get benefits. Seriously lighting a bunch of 20's on fire every payday would be way more entertaining. I could light a cigar with a hundred dollar bill somewhat regularly which would be kinda cool too.

I know you would like to receive benefits that reflect what you have put in. However lets be realistic here. As a guy in his 30's do you actually see that happening?

I agree that our government likes people being dependent on it. However the government is simply not going to be able to make it work. Right now the subject is essentially toxic. Expecting politicians to commit job security suicide is just not realistic. Sooner or later a radical change in entitlement benefits is inevitable.

Lastly I want to talk about why I wrote the original post. I am sure somewhere in the last few years you have heard the phrase "stress test". Basically a stress test is, at least in theory, a way to see how a corporation, bank or person would do in different scenarios. I wrote this to be thought provoking and to lead people to do their own personal stress tests on what I see as plausible scenarios. If it was a bit gloomy that is meant to be a warning. Sort of how you would warn your buddy if the 300 pound gorilla sitting at the bar slamming shots started angrilly glaring at them. My intent was not so much to talk about the ethics of entitlements or even entitlements in general but to provoke some thought and get folks to consider how these events would affect them.

Sunday, January 30, 2011

Retirement Fun for Boomers and Beyond

I should note that I do not have a crystal ball or a product to sell which will magically fix all the problems I am about to discuss. I am also not an accountant or a financial advisor or anything like that so nothing I say should be seen in that light. By all means read what I say and think about it. If you decide it might have some merit then consider it in your plans. However don't just mindlessly put a lot of money into this or that because I (or anyone else) talk about it if you do that you are a fool and deserve all the bad things that could happen. Be an adult and make your own decisions because you will have to live with them.

With the slew of municipalities being broke and having insolvent retirement funds, corporations dumping pensions whenever they get any excuse and a whole bunch of states broke I would be concerned if a pension was going to fund my retirement. Heck even the federal government isn't doing so great. Consider what would happen if you pension was radically reduced or even defaulted entirely.

Also if you haven't noticed the USA has a real problem with welfare social security and medicare. Like the level of problem Charlie Sheen has with vodka and cocaine. Social security was started by commie FDR with benefits at 65 when people on average died at 62. Also there were lots of workers to pay for it. The numbers don't work and are rapidly getting worse. Too many people are retiring and not enough are working to pay for them.

I imagine a lot of small things will be done to try and bend the exponential curve of welfare entitlement costs.The are to collect full benefits will likely go up, well off people will be charged on more of their income (I think it's 100k right now), and some sort of a means test will likely appear. I believe all of this will only succeed in kicking the can down the road a few years.

Also more significantly generations X and Y realize we are never going to collect meaningfull social security. As boomer politicians screw us with higher rates of theft contribution we will get pissed. Pretty quickly we will get into an age demographic that votes at a far higher percentage and are a significant force there is going to be a reconning. I am not sure how we will screw you the boomers but I bet we will. Best case is that they are going to be paid in inflated dollars. On a more gloomy side it could be significantly inflated dollars. Worst case for them the welfare social security checks will stop entirely.

My point here is that you should plan for retirement without counting on a pension OR social security. If you can collect either of them then go for it. However personally I would want to be able to support myself without either and just have them as icing on the cake.

In an even darker scenario the dollar and subsequently paper investments denominated in the dollar could take a nasty hit. Maybe it could be a slow slide or a fast crash, I don't know. In any case the have money in investments and live off interest/ dividends plan would fail in this scenario. To be honest this is relatively unlikely (slow slide to a currency among many versus world reserve currency and a moderate loss in purchasing power is more likely) but it would be a bad one. Most retirees would be devastated. The truly rich would generally be fine (somehow they always are) but middle and upper middle class folks would mostly be destroyed.

What can be done for those who are worried about this relatively unlikely (the extreme version anyway) scenario? The first thing that comes to mind is to have your basic financial house in order. For those close to retirement age having very minimal or no consumer debt and having your primary residence paid off is so huge. I watch a lot of those financial shows and the amount of people who are trying to retire with car loans and very little equity in their home (let alone having it paid off) baffles me. If you are debt free and retire then something happens so you face a drop in income at least this way you can shred your expenses. It would suck but as long as you can pay property taxes, fuel and food you will be OK if not happy. However if your pension fund fails/ the stock market and subsequently your investments collapse and you have all sort of stupid consumer debt and a high mortgage payment it will get ugly fast.

My next thought also flows well with what is likely reality for most boomers. The reality is that many of them saved like they have a cushy defined benefits retirement plan when in fact they have a 401k. Too many of them continued to upsize their home and used home equity like an ATM instead of paying off their home. Fundamentally a lot of people are approaching retirement age and just can't afford to retire, at least in the way the Greatest Generation did. Some will be able to retire and live modestly (versus lots of travel and recreation) while others will need to keep working in some capacity or another.

The advantage is that earned income (vs from dividend's, stocks, interest, etc) is pretty flexible. You can, at least in theory, renegotiate the deal for future services to reflect a changing economic situation. That could mean getting paid to reflect the real value of currency, in a stable currency, PM or barter. Hard to do that with your pension or retirement account. If something this ugly happened a lot of people would be headed back to the workforce in a seriously damaged economy. The way to get ahead of the game would be by working in some capacity already. Maybe you could work part time, consult or just have a couple clients. Even a modest income could (in addition to making todays retirement economics more comfortable) be the difference between making it and not.

Where you choose to put your money is important also. I am not against precious metals for an alternate currency/ store of value but have concerns about them for retirement. The reason is that they do not benefit from interest, dividends, etc. Every silver dollar or gold eagle you spend is coming strait out of your principle.

The reason that truly rich (maybe wealthy is a better word) people do not get wiped out is that they own businesses and real estate that produce income for them. If currency values change radically a solid business will continue to earn some money. People will continue to rent apartments, homes and commercial space.

Things that produce income are good things to buy. A lot of the downsides of real estate (and to a lesser degree businesses) are minimized if you pay cash. I would rather have some money in the bank and the market and a modest rental house or twelve in decent areas earning me income than a bunch of money in the market.

I don't know what is going to happen so I hesitate to suggest putting all your eggs in any basket. If your finances are in order, you earn a bit of income and have at least some of your money in tangible things that produce income odds are you can weather whatever comes.

Thoughts?

Saturday, January 1, 2011

Unconventional Family Housing

Different cultures and periods have dictated cultural norms that vary widely in terms of who lives with each other, when and for how long. For the sake of this discussion I am going to consider conventional housing being one or two adults that are married or otherwise together living with the minor (or close to minor) children of that couple. The other norm is adults that are friends or acquaintances (or just random's) living together to share expenses.

There have always been some exceptions to this relative cultural norm of contemporary post WWII America. In particular many immigrant groups and Hispanics have tended to stay together much longer and adult children living with parents. Three generation households are common if not the norm for these groups. Also among Americans young 'adult' children maybe living with their parents for awhile and older adults who need some assistance living with family have been consistent themes. The latter for economic subsidization and the former for help with everyday stuff. Toss in random fairly short term life circumstances like job losses, breakups/divorce, relocation, leaving the military, etc and you have captured most of the reasons people have traditionally chosen to reside with family. Sort of like there have always been a certain percentage of home foreclosures there have always been some unconventional family housing. Also like home foreclosures unconventional family housing is (I don't have statistics but I sure think) on the rise.

The Great Recession is proving to be particularly hard on young adults. Even the best laid plans for getting meaningful skills on the non college path takes time and generally starts with low wages. These days kids just starting out are often the first to get fired AND they are far less likely than in the past to get the kinds of jobs that allow for upward movement. You would have to be blind to not see a lot of young adults graduating from college and moving home because they can't find a professional job; or even a job that will pay rent and let them live independently.

These coupled with an increase in the overall rate of unemployment have put unconventional family housing on the rise, at least in my circle of friends and family. Some observations from successful and rocky situations are why I am writing this today.

Here are some considerations for unconventional family housing. It is important to remember that much more than a generic roommate situation there are social factors in play and it is a different dynamic. I think the biggest and most important thing is coming up with a detailed and specific written agreement prior to beginning living together or immediately after moving in. I just don't think this can be overstated as it will, if well thought out, prevent so many issues. Obviously in a case where one person is subsidizing the other (free or reduced rent, etc) the one doing the paying has a lot more say. I will refer to the two parties as supporting and benefiting for convenience. There are many different variables and factors in play and it matters less what is agreed upon than that there is an agreement. Here are some considerations.

-Do you even want to live with family? I've known family who have instead helped someone out financially. Also I know folks who have couch surfed or been the 5th guy in a 3 bedroom paying $50 a month to sleep on the floor (guy 4 had the couch). My advice is that if it is going to really be an uncomfortable situation to avoid it if at all possible.

- For approximately how long do you plan for it to last? Somebody staying for a couple weeks or a month until whatever happens is very different than a plan that could last months or years. This is important because how long it is anticipated to last really affects the amount of planning that should be done. On the short end a two minute conversation can work and on the long end some forethought and a series of detailed discussions could be wise. (More on this later.)

-Under what scenario are you willing to enter into this sort of arrangement? Are you willing to help the supporting party while they are in school or doing an apprenticeship or internship? Are you willing to support them until they earn enough to support their self? What about if they make an OK living but choose to spend their money on other things? What if they are between jobs? What if they are are in a low paying dead end job? What if they are waffling, sleeping late and partying a lot. I would strongly suggest thinking about this and talking about it with your partner BEFORE it comes up because odds are it will come up. My only advice on this is don't be afraid to lay down ground rules. If you are OK with someone living with you while they are in school, trying to find a job, saving for a down payment on a home or whatever then say so.

-Social arrangements are the next big sticking point. This is probably the most noticeable difference between living with family and a generic roomie arrangement. Broadly speaking it would benefit the supporting party to realize that everyone involved is an adult and it would be good for the benefiting party to remember they don't just have a roomie. This is particularly important if someone is single and actively dating. While a random person in a bathrobe drinking coffee in the kitchen when a family member is over makes for a great scene in a sitcom it would not be so funny in real life. Well it might be funny in someone elses life but not your life. If house guests are cool or not is a very personal discussion but you should have it early instead of late.

Also family generally want to have a lot more vision on each others whereabouts than roommates do. When I used to have roommates I worried about what it would seem like if something happened to them. They could be gone for a week or two and unless bills were due or something I wouldn't call them. I had a vision of a cop asking where they were and me being like "I think I saw him last Tuesday" and it not going well. At the various times I have been home as an adult; what we have done is that if we are going to be gone overnight we let the other person know where we will be. Just a phone call saying "I'm staying at Bob/Tom/Sally's place" was sufficient though I did try to call before 9pm. If the folks went somewhere they told me where also. Coming up with a workable plan for social arrangements isn't hard provided that you show some forethought and have an honest if slightly unpleasant conversation before things start coming up.

-Financial and household arrangements are next on the list. Just figure out who is going to pay for what. For the supporting party be advised that there will inevitably be some cost, if just utilities and a bit of food and not to get into this anything you can't afford comfortably. My observation is that in this area it isn't so much big picture stuff but little things that create problems. We aren't talking about hundreds of dollars in rent so much as who ate the last pepperidge farm chocolate chunk cookie and didn't buy more. The supporting party generally knows that the benefiting party needs help and they are willing to provide it. Also I think that if you have figured things out to the point where everyone knows who is supposed to replace the chocolate chunk cookies the big things like rent and utilities have long been covered.

I have two more thoughts on finances. First is if the supporting party has any sort of financial expectations for the supporting party they should make then clear. It might be paying off debt or saving to be independent, etc just lay it out in advance. The second thought is that (I'm not a lawyer so this is not legal advice and consider yourself disclaimed.) in a lot of places paying rent entitles a person legally to certain rights a house guest does not have. If things get bad that could turn out to be a real pain. Maybe there is a way they could help out with groceries or something and still be a house guest. If that is a concern (or you are looking at a real long term situation) then it might be worth talking to a lawyer.

In terms of household arrangements. Figure out space and if possible clear up some storage for stuff that exceeds said space. Spell out very clearly (not just 'help around the house') what you would like the benefiting party to do towards the total household workload.

- Lastly I think it is worth being clear on what circumstances and or time frame is going to bring an end to the cohabitation. This sort of ties in with the scenario under which the supporting party is willing to enter into this sort of thing. For example you might be cool with a full time student but aren't so cool with a student taking a class or two at a time with no real direction. At some point (and many articles have been written by people experiencing this) helping can definitely become enabling. Case in point I recently saw a guy I know who graduated with a BA two years ago and has been at home unemployed since. We all know a kid who graduated high school and just sort of hung out partying, sleeping a lot and playing video games until eventually the rents lay down the law. To risk being redundant it doesn't matter so much what the conditions here are but they should be well thought out, specific enough to be meaningful and understood by all parties involved.

Beyond the Great Recession I see this sort of unconventional family housing becoming more and more common. The numbers and demographics make it an easy call. Kids today on the non college option have serious problems. They used to get a low paying job then as they learn and gain some skills wages improve over time.  To be blunt this model is not working so effectively any more. It takes longer for most to move to a wage where they can live independently and some aren't moving there at all. When GM paid anybody the equivalent of $17.50 an hour and grocery stores paid living wages it was easy to get a job then an apartment and pretty quickly be middle class. Now the kinds of jobs many of these kids get make $9 with no benefits and little room for upward movement. Those who get into union, trade and tech jobs will likely fare the best.

Don't worry the college option (this reminds me of the game Life) isn't much better. When many folks take a bump down the ladder and there is high unemployment then hiring a person with a few years experience, or someone you had to let go when things were rough, over a kid just out of college is a no brainer. This plus student debt hitting record levels (somewhere over 20k on averagea terrible time to be young.

Don't worry the baby boomers some issues also. Many of the boomers are in serious trouble when it comes to retirement because they haven't saved a darn thing or in any case nowhere near enough. They saved like they have a cushy defined benefits retirement plan and social security is totally secure. As you may note they generally do not have a defined benefits retirement plan and getting social security (with decent purchasing power) is a long bet. To make matters worse instead of buying a modest home, paying it off and staying there like the Greatest Generation did they traded (while moving some distance or in the same area) their homes up several times and often tapped any equity which had been somehow accidentally created. The amount of people who are looking at retirement who do not have their primary residence paid off surprises me. On a whole lot of these retirements the math just doesn't work. In the economy we have now with older workers being expensive to employ, expensive to insure and absent from work more often they are likely to get laid off sooner instead of later. In any case it would be optimistic to assume they will be able to have full employment for as long as they want. Also along the surprising theme some boomers seem to be in la la land in terms of how long their money will last. They must be figuring on 20% annual growth in their money or something. These folks think they will be able to at least maintain their lifestyle forever when in reality they might be able to live a very basic subsistence existence.

Of course not all 20 and 30 somethings are boomeranging back home and plenty of 55-65 year olds did plan adequately for retirement. My point is that between those two groups the amount of people in a situation where unconventional family housing is necessary or desirable is going to dramatically rise. Best of all this scenario is if the economy keeps going more or less without significant changes. If the great recession gets worse and turns into the late 70's- early 80's or America's lost decade or even worse then all bets are off.

Along those same lines a TEOTWAWKI or significant security change could lead to a non economic motivation for this sort of thing. Even if you make a fine living or saved well for retirement it is pretty darn hard for a couple or a normal family with a couple teenagers to have decent 24/7 security; let alone have decent security and get anything done. Extended families and or friends would be well advised to gather at the best location they have available. I think it is worth putting some planning and forethought into this unconventional housing situation also. This however is a whole other series of posts for another day.

 Anyway I have been writing this off and on all day and it is way longer than my average post so I am not going to bother to carefully read it twice for small grammar and convention issues. Anyway I hope you enjoy it and maybe even get something out of it.

Goodnight and good luck

Monday, June 7, 2010

Rapidly Becoming Apathetic

I was filling out one of those online things and it asked what my political preference was. Not sure why but I gave it more consideration than necessary. I realized that things are kind of sucky and I just don't care. Seriously I don't see any of them making things better. The R's and D's have both had a shot recently and just done a bang up job. I am not sure our system will leave anybody willing to deal with our issues (mainly massive unfunded entitlements) because to do so would be political suicide. Getting any politician to do that is unlikely, let alone a majority.

I bet some folks on one side are getting a good chuckle at folks on the other who thought the cozy government + business relationship would change. They both take money from the same big corporations that like pet legislature as well as capitalism on the way up and socialism on the way down.

Some folks think maybe the Libertarians will save us but I am not so sure. It is pretty easy to be noble when nobody is offering you anything. It is equally easy to offer outside of the box solutions when you aren't responsible for anything and can just Monday morning quarterback it. Also as far as I know the Libertarians have never gotten anybody elected to anything more than (if even that?) county dog catcher. Even if they got ANYBODY elected to a meaningful position I don't think that would change anything. I love Dr. No (Ron Paul) as much as anybody could but aside from voting no on everything and proposing bills that doesn't every go anywhere what has he done?

Seriously on the national or likely even state level I am not so sure I see anything good coming. On the local level more grass roots stuff involving real people has some promise but I move around a lot now so don't really care about that.

I make predictions of what is coming here or there, no need to rehash.  I think I've given up caring until something worth caring about starts to happen. I am not holding my breath.

Monday, March 22, 2010

Focusing on my own Comings and Goings

Last night I started some pineapple dehydrating. For the last batch I bought a whole fresh pineapple but this time I got a couple cans of pineapple rings. The rings have the benefit of being a lot cheaper because unless you live in the tropics pineapples are expensive. These turned out to be really good. Decreasing the dehydrating time slightly helped but also it was easier to get uniform slices to dry the same. Did I mention these are really good.

I didn't work today. Sleeping in was nice and had a leisurely morning. Took Wifey to work and then headed back home. I have been watching the news but only halfway paying attention. Mainly I have been cooking. I made a big old crock pot full of chili. In about an hour when the beans are all the way done it should be pretty darn tasty.
Chili is best with corn bread. We have used the recipe on the bag of corn meal a couple times and found it grainy and not particularly great. I mentioned looking for a good recipe on Facebook and MIL sent me a link to this post by The Pioneer Woman. I got to cooking this stuff up and it looks pretty darn good.
This whole health care debacle has been in the back of my head all day long. However life is just too short to get all whipped up about something I can't do anything about it anyway. I am going to have some chili and cornbread now. After dinner I will have a drink and do some reading. All things considered it hasn't been a bad day here.

Monday, March 8, 2010

Thinking About Entitlements

I have been thinking about entitlements for the last couple of days. I've written about them before but well, I'm thinking about them and blogs are somewhat redundant. I went back through my posts on these matters and the first of my relatively recent ones sums up my core views nicely. I think that picture is accurate, for at least a decade.

I was watching Tom Brokaw on some news type show. He made a very interesting point. My generation are going to screw older people. Those under 40 (and doubly so under 30) realize social security is a Ponzi scheme. More importantly (older folks aren't stupid, they know it's a Ponzi scheme too) we realize we are at the point in the pyramid where enough new contributors can't be found so it falls apart. Right now we aren't an important demographic for anything but beer, clothing and electronics sales, we are largely ignored in politics. However when 20 and 30 somethings become 30 and 40 somethings we get pretty important pretty fast. I think the likelihood of us adjusting social security benefits to fix a dysfunctional budget are pretty high. Look at what big corporations and nations do when they are broke, they cut the pensioners because aside from ill will by that group it is a darn easy thing to get rid of. Maybe we will screw you guys, at best we will pay you in highly inflated dollars.

In any case I think retirees and those approaching that age need to think about a stance based more on making the program viable and something my generation can have some trust in than getting their 2.5% this year. Also if I was anywhere close to retirement I would do some looking at where I would be without these entitlements.

When it comes to medicare. This is a bit more complicated because the benefits are far less clearly defined and the costs are booming. More people are going to start drawing SS but more people will start drawing medicare and each of them will cost more. We can figure the cost of SS for a given retiree is X plus a couple points a year. Medicare doesn't work that way. First I think we need to make it so retirees with access to other medical care must use it first, not visa versa as it is now. I had two grandparents, both of whom retired with good reasonably priced medical insurance for life. Instead of that insurance paying for their medical needs our government paid. In what world does that make any sense? Also some sort of a means test would make sense to me. Someone who is worth 3 mill in total assets (just to toss out a number) can realistically afford to buy their own insurance.

Also as unpleasant as it sounds we need to really talk about end of life care. I am not a socialist and I do not want to control peoples medical care. I believe people should be free to spend as much money as possible to prolong their life or their quality of life. If Warren Buffet thinks taking a bath in a tub full of diamonds then throwing them away every day will cure cancer then good luck. However I do think an articulate discussion needs to be had about how much money I AM GOING TO BE FORCED TO PAY to keep a 75 year old morbidly obese man with stage 4 cancer who just had a massive stroke hanging on to life for the next week. We spend an obscene percentage of the total cost of health care at the very end of peoples lives and it needs to be looked at. Back to Social Security to close.

To be honest I think it is going to get ugly. Maybe the whole thing will collapse and we will go all hyperinflation. More realistically things will just be bad and we will pay seniors with highly inflated dollars. Maybe my generation will radically change benefits and just shove the old folks under the bus. I see several potential outcomes, all of them bad. It is more a question of how bad and for whom than if it will be bad.

Upon reflection I just can't see the Ron Paul way out working. The first reason is that if there is an example of our government massively slashing expenses in order to pay for an already existing benefit I can't think of it. Secondly I think we are just talking about too many people getting too much money to meet those obligations without a massive dedicated tax. Third I think the "stop gap" concept fails to really recognize how long it would take. I think that in order to not screw over/ honor the contract with seniors we are going to have to pay most of them a high percentage of what they had been promised for the rest of their lives.  I do not have an actuary table for the population we are talking about handy but this plan would have us coming up with a whole lot of money for at least a couple (more likely 3.5-4) decades. We aren't talking about sending these folks 4 more checks and calling it good.

There are just too many retirees getting too much money from the government to be able to have my garnished waged go into my own privatized account (or just stay in my pocket?) and Granny to keep getting checks. I just don't think the math works out.

 In closing, buy silver and ammo. Not that silver and ammo have anything to do with the above, just that I wanted to close on some good advice which everybody can agree upon.

Thursday, July 2, 2009

Wednesday, January 14, 2009

Entitlements Part 3- Ron Pauls Solution

As mentioned previously I read The Revolution: A Manifesto this weekend. One of the many topics touched on in the book was entitlements. I am not going to directly quote or even paraphrase Dr. Paul's words on entitlements. The route I am going to take is to briefly summarize what I understand to be his thoughts on entitlements as stated in The Revolution.

It is not surprising that Dr. Paul is against entitlements because they are not specifically authorized in the Constitution. It is also not surprising that he is opposed to them because they are unfunded and are part of the reason we have a huge deficit.

Much more interestingly Dr. Paul has a plan to get us out of this mess. He believes that when the nation started forcibly taking peoples money to fund social security and medicare they entered into a contract. This means that just cutting things off immediately is not an option. People who have learned to be reliant on these programs will not be thrown out into the street.

This is where plans start to get combined with a real big picture view. Ron Paul wants to bring American troops home from 130 (ish) countries and end our enormous military presence oversees. He also wants to get rid of foreign aid. Money saved from ending these expensive commitments would be used to provide a stop gap measure that provides services to the most vulnerable and in need.

Thoughts?....Flame on I guess.

Monday, January 12, 2009

Quote of the day

"Fuck that shit. It is not my responsibility to pay for someone else's health care."
-The Other Mike's thoughts on Medicare. Before flaming him read his whole comment.

Friday, January 9, 2009

Entitlements Part 1.5- Social Security

This brought up enough discussion that some things deserve to be addressed in a venue more public then the comments section. I will address as much as I can in no particular order. Here it goes.

First of all I did not mean anything seriously bad to the older folks who read the blog or your peer group. I poked some fun but it is just that, fun. I take a few friendly shots at just about everyone given the right setting. I am enough of am asshole that if I wanted to say something really mean I would.

As for the concept of raising the withholding I am for it but the max in terms of payout should also be adjusted in some way. Tweaking the max amount people contribute could be worth looking into. That being said it almost surely will not be a permanent solution. I don't think anything but a change of the status quo is realistically going to lead to a permanent solution.

As it has been said what I mentioned doing would almost surely not be a permanent solution to SS solvency issues. We pretty much did that stuff before and it bought some time but wasn't a permanent solution. We seem to complain about how the things we are willing to stomach can't fix things but we will not accept more radical solutions to the problem at hand.

The most interesting idea that came out of the comments was what happened in Chile with their SS plan in the 1970's. If you are as familiar with that as I was three hours ago then read this. I think that is sort of idea is probably the best chance of making our system viable but I still have the same big question/ concern I had about going to a privatized system before reading that article.

How did Chile deal with the ponzi structure of pay as you go plans? The money needs to keep coming in or those drawing benefits will be shit out of luck. For a system to be privatized my money needs to be going into my account. If my money is going into some sort of a privatized/ funded system either I would also be paying for a generation of retirees or they would be up a creek without a paddle. The government could pay the retired generation (ha ha ha ha ha this is such a funny joke) with money they save from somewhere else (an even funnier joke). Maybe to skip the trouble and expense of printing checks they could do it all direct deposit.

I don't think I will talk about this anymore. Maybe the answer is that we are all screwed.

Entitlements Part 1- Social Security

Yesterday I talked about simple solutions to Americas problems. Hermit shrewdly noted that my ideas were fine and good but did not address the complicated issue of entitlements. Entitlements are such a bit part of our nations financial problems that they can not be left as they are. At the same time there is a reason entitlements are referred to as the third rail of politics. If you life on a farm in Idaho and have never left it that would be the middle rail which is electrified and gives the trains power. To put it simply, if a politician touches it they are dead.

Today I will talk about Social Security. I talked about SS in the past when in a fairly heartless and extreme mood. This time I am taking a more thoughtful and realistic approach. Maybe the ideas I have will not completely solve the problem but they surely would not make it worse. Unfortunately nothing worthwhile in life is free.

I think the best course of action is to look at our SS problems from both sides. Simply put we need to figure out how to make SS take in more money and give out less. We are not trying to make a profit as a business would but if the incoming money doesn't equal the outgoing money the system will not work long term.

As for getting SS to take more money in I can only see one answer. The amount of money deducted from most of our paychecks is going to have to be increased. If anyone has another idea for the program to bring more money in I would be very interested in hearing it. This increase would need to be enough to be useful but not so much that young people flee wholesale to the underground economy or rioting. Maybe some wackos start burning down old folks homes to lower the SS burden.

The best way to sell this to my generation is to convince us that this will make SS solvent. Knowing I will actually get some of the money I put into SS back later on will make me a little bit less pissed off.

When it comes to money going out that is probably more touchy. It would take a whole lot for young people to start rioting over increases in their SS garnishment (I refuse to call it a contribution since it is forcibly taken from us). People old enough to be collecting SS are much more politically active and they have lots of time on their hands. They have the time to do more to support or hurt political candidates then any other group. If I was a politician I would rather have a leaked tape of me kicking a puppy to death then piss off the AARP. That was half a joke. If the old folks saw their checks go down 10 dollars a month they would call their Congressmen 5 times a day and their Senators several times each. They would write letters to the editor and raise all sorts of hell. We might even see the slowest most lethargic riots ever. The good news is that the riots would be over by 4:00 so they could get the senior special at their favorite restaurant and be home for Wheel of Fortune. Also note that those who are within sight of retirement are also a key voting block. They are young enough that some of them could actually do some damage in a riot. On a tangent if (though very unlikely) radical changes in SS payouts are going to happen I am going to go get a few gallons of Whiskey and a few gallons of Vodka because rumor is liquor stores in the deep south might start getting burned down.

I can see a couple ways to decrease the amount of money we give out for Social Security. We could make people wait another year or two to receive benefits. We could decrease the dollar amount of payouts. We could set a maximum income and asset level at which people are not eligible to drawing SS. I suggest that we do all three of these things.

Selling any sort of reduction in benefits to seniors would be tricky. If convinced the SS system is fundamentally flawed and doomed to immanent failure getting 15% less each month might sound reasonable when the alternative is getting nothing or serious inflation. These folks are old enough to know what high inflation does because they have seen it in the past.

IMHO the darkest and most likely scenario is to do neither of these things and just print more money. The old folks will keep getting checks for the same dollar amount but it will be worth less, like always there will be a significant difference between real inflation and official inflation which their COLA is based upon. Serious inflation would of course hit those on fixed incomes the hardest. This is the worst scenario because it would hurt EVERYONE hard not just those relying on SS.

Of course not letting congress raid SS funds ever for any reason would probably help also.

I think the best conclusion is that we all grin and bear it a little instead of completely screwing the young or the old.

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