Halloween & Elections!

We buy candy every year to hand out to trick-or-treaters who come to our door.  We’re happy to do it.  It is interesting to see the costumes, or in some cases the lack of them.  This year I saw a couple of Jokers, and thought of the Motley Fool.  But if you’ve been following me for any length of time, you know there’s something else coming.  And you’re right.  You can tell quite a bit about the character of the kids who come to your door.  When they say, “Trick or treat”, and I say, “Pick one”, many of them do exactly that, and I’m impressed.  Then there was one young girl who asked, “how many?”  I responded with my standard, “Pick one.”  And she did.  A very polite young girl.  Those that know me well are waiting for this one.  “Trick or treat”, they said.  I said “Pick one.”  I think they were trying to pick one, and got two.  One fell on the ground, and they picked it up, and put it in their bag.  I had no problem with that.  Now here’s what you’ve been waiting for.  Her brother grabbed as much as he could fit in his hand.  I had to say, “Whoa there, JUST one.”

You didn’t think I was done with my story did you?  Good!  Because I have a lesson we all need to learn from this experience.  You would never be the person who takes more than somebody is willing to share, but if you aren’t then both of your neighbors are.  How can I make that statement?  Well, look at it this way, at least one out of every two people in this country are receiving more generosity from their government than they are paying for.  In fact a significant number of your neighbors (because you’d never do it) are not paying any income tax at all.  They’re like the kid thrilled with getting candy for free, who looks at the full basket of candy I have, and instead of taking one, takes as many as they can grab with their hand.  Maybe you’re tempted to say what’s wrong with that?  What happens if during the course of the evening I run out because the first ten kids take handfuls?  What do I do when the next 20 kids come to my house?  Are they going to be “mad” at the first 10 kids?  Maybe, but my guess is they’re going to be “mad” at me because I didn’t buy enough candy.  What if I can’t afford more candy?  What then?  Will they know that?

This pretty much defines the life of a small business owner, or any business owner for that matter.  People want businesses to give away their product without making a profit, because profit is “bad”.  Or having a profit is seen as being greedy.  News flash, if business owners are not able to make a profit, there’s no incentive for them to be in business.  They won’t be able to afford any candy to give away to the kids for Halloween.  Citizens are more than willing to push the taxes on those “wealthy business owners” and their businesses, asking them to “pay their fair share.”  If only it was their fair share, but in reality business owners and successful people are being asked to pay more than their fair share.

I’m pushing back, and asking everyone to pay their fair share, including the poor.  If you think your fair share is too much, elect people to represent you who promise to reduce the size and scope of all layers of government.  If they are not able to get the job done, don’t elect them again.  You see, term limits are a bad idea.  They force us to get rid of people who are getting the job done, in the name of stopping those who are not getting the job done.  The thing is, there are already term limits.  We just have to have the resolve to enforce them.  Every office has a length of term, otherwise we wouldn’t keep on having elections.

For once, ignore your party affiliation, and think about what electing the individual means.  If they’ve held office for any length of time, have they helped the country?  Or have they helped their own political career?  Have they been self-serving, or have they truly taken on the tough challenges and solved them?  I’d say there are 16 trillion reasons to say they have not tackled the toughest challenge!  It is time to elect people who are serious about resolving our debt problem.  The way you can tell they are serious, is if they are willing to curb government’s voracious appetite for spending more than tax revenues support.  In order for me to not run out of candy, I need each child to take just one piece.  In order for our government to not run out of money, we need to make sure our government isn’t doing more than it needs to do.  We need to make sure we aren’t trying to take advantage of our government, because when we do we are really stealing from our neighbors, or from the kids who come later.  That’s the real greed.  The businessman’s profit allows him to keep meeting the needs of society.  The businesswoman’s profit allows her to build up reserves for a rainy day.  And if our government operated this way, and instead of a 16 trillion dollar debt, we had a 16 trillion dollar surplus, then President Obama can talk about making any investment he wants to make to get our economy going again.  But honestly, he wouldn’t have to because we wouldn’t be in this problem in the first place.  And there wouldn’t be a person in their right mind who would want a two term limit on somebody who was able to turn a 16 trillion debt into a 16 trillion dollar surplus.  Unfortunately, President Obama took a 10 trillion dollar debt and turned it into a 16 trillion dollar debt.  That’s the wrong direction.

Well, Trick or Treating has come to an end here, so I’ll wrap this up.  Let me know what you think!

 

I Have a Dream

Watch this, then read my comments.

If you are like me, then that was a very worthwhile 20 minutes or so– and that’s not just because I’m an Apple fan.

It got me to thinking about my own personal “Why”, and my own personal dream.  In the days ahead, I intend to watch this video clip a few more times.

Did anyone else catch my other favorite company featured as a failure?  TiVo, is the standard I judge every DVR against, yet they were, and are not profitable.  I think I know why, but they never asked me!  Nor did they ask Simon Sinek.  It is really sad that such a great product hasn’t produced financial results for the company, when their product is every much as good as Apple products.  Apple’s stock trajectory was from about $20 at TiVo’s IPO to $349+ today.  TiVo’s trajectory was from just shy of (no doubt reverse split adjusted) $60 to less than $10 today.

As you can see, it is far more important that Why drives How then What.

Stop Spending, Start Saving!

Unless you choose to put your head in the sand, it should be clear that we have created a problem of immense proportions.  Many of us, as individuals are in debt beyond what we can bear.  And, as if that wasn’t bad enough, we are in debt as a country beyond human comprehension.  Many, who see this problem compound it by trumpetting this debt as foreign debt.  While large chunks of it are, United States citizens either directly or through various mutual and other funds own a huge amount of that debt.  So I will acknowledge that is isn’t all foreign, or as big a problem with foreign influence as some will attempt to scare people with.

Let me be emphatically clear, however; that there are natural laws in place which no government on earth, powerful as it may be, can forever circumvent.

That natural law is that the borrower is servant to the lender.  Our Federal Government seems to forget that.  Oh, I know, we’ve eliminated slavery and forced labor here in the United States.  We’re the “land of the free, and home of the brave” after all.  Really?  No, not really!  Not until the United States owes less than it could pay off if it decided to do so, would it truly be free.  Until then, the United States is servant to its lenders.  And we, as citizens of this country, are not truly free either.  Our rugged individualism is eroding, and we are accepting dependence, if not outright reliance, on a growing, wasteful and inefficient government.

If you think that we can continue on this course without consequence, then you have not considered reality.  Do you think it isn’t possible to have a revolution in this country?  That we are too civilized?  Do you really think that the United States can afford another foreign war?  Or, a war within?  Where does war fit into this equation, you may ask?  Well, if China is not paid on the debt they own, would you put it past them to attack us?  Their military strength is growing.  Their population alone dwarfs the United States, so they could afford stunning human casualties.  To those who say our Federal Government would never default on it’s debt, may I remind you that the Federal Government forced the debt holders of General Motors to accept pennies on the dollar for their loans.  Is it any wonder that people and investors are hesitant to loan money, when the government seems willing to step in and force immense losses?  What’s to prevent our government from saying $14 trillion dollars of debt is really only $14 million dollars of debt, causing everyone who holds the debt to lose money?  If you say that can’t happen, then you haven’t looked at quantitative easing.  That’s just a fancy way of saying “printing money”.  If you print enough money, you can make $14 trillion dollars the equivalent of $14 million dollars today.

It is in this context that I share this article from Newsmax.com:

Democrats Play Chicken as Boehner Digs in on Budget

Thursday, 31 Mar 2011 01:27 PM

By David A. Patten and Matthew Belvedere

Michele Bachmann, John Boehner, budget. . .“Between Harry Reid, Chuck Schumer, and Howard Dean, they let the cat out of the bag, and that’s that the Democrats’ political plan is to shut down government because they think they will benefit from doing that. Now we know that, if the government shuts down it’s not the tea party’s fault, it’s the Democrats’ fault, because they’ve made a decision they’re not interested in compromise. They just want to see the government shut down,” Backmann tells Newsmax. . . .

© Newsmax. All rights reserved.

Please click the link above and read the entire article.  Newsmax copyright policy limits a quote to 75 words or less, and we try to follow the rules around here.

One quote in particular caught my eye.

Boehner said he is glad that activists remain involved. But he cautioned that Republicans control just “one-half of one-third of the government here in Washington, we can’t impose our will on another body, we can’t impose our will on the Senate.” – Newsmax.com as above.

 

While this is true, “we the people” need to remind our elected officials that they derive their power from the consent of the governed, not from the position that they hold.

So, getting to the point of this post, let me address what it is that we need to do.  We need to stop spending at all levels.  We need to learn to make do with what we already have.  We need to learn to spend within our means, not outside of it just to keep up appearances.  Then, once all of that is under control, we need to start saving.  Now, if you’re like me, and I suspect you are, you are thinking that means more cuts in spending.  That’s right.  You have to cut spending even more to be able to afford to save.  Why go through this pain?  Why is it important to start saving, and not just be satisfied that debt is being paid down?  I’m glad you asked.  Saving not only forces you to spend less, it makes you wait for a major purchase.  It doesn’t mean you never make the purchase, it just means you have to wait.  Saving means that your entire outlook changes.  Instead of paying for things later, you pay for them before you buy them.

I’m going to interject a personal example here.  Almost 9 months ago now I purchased an iPad.  In the past, I would have gotten it right away if I wanted it.  I would have made all sorts of rationalizations about how I really needed it, when in reality, I just wanted the latest cool thing from Apple.  In this case, I waited for some time, partially because I really wanted to have an iPad with a camera.  However, there was another more important reason.  I actually assessed how I used my then current MacBook.   I realized that it spent most of its time tethered to an external monitor.  In other words it was essentially an iMac.  Upon further thinking, I realized that when I was using the MacBook as a laptop, I was primarily surfing the web, or checking e-mail.  Those are two things that the iPad is perfect for.  So, as a pragmatic step to get me to the point where I could replace my MacBook with an iMac, I went with an iPad.  Going this route put off a $2,000 purchase by at least a year, and only cost $800, a savings of $1,200.  Well, the reality is the savings is actually much higher.  I’ve shaved weight off of what I carry between home and the office each day.  Once we started thinking like this, we actually figured that we could rearrange  our existing iMac computers to put off a new purchase even longer.  That’s te good part about a Mac.  The only reason you feel the need for a new one, is if you make the mistake of using a new one and you see that faster is possible.  Otherwise, these things run circles around PCs.  My apologies to my friends who still think PCs are better, I know how hard it can be to admit there could be something better!

As you might be able to gather from my personal example, we didn’t stop spending altogether.  We simply didn’t go and get everything I wanted.  We figured out how to get more productivity out of what we already had, and how to extend the life of what we already had.  Some would even say if we wanted to save money, we should buy PCs instead.  At the risk of going down a rabbit trail, the cost savings on hardware is real.  However, after supporting Windows based PCs for over 20 years, and dealing with sudden an unexplained inability to find network printers, and other devices, sapping hours of productivity, it is refreshing to now deal with the occasional lost file.  Lost, not because it’s gone, but rather it was used on a different computer.  If it’s just a file, I can connect to every single Mac we own securely over our Virtual Private Network (VPN), and mount those hard drives on my own Mac, and search.  Or, if I don’t want to mount drives, I can log in to those Macs remotely and control the remote machine.  It works every time, unlike my Windows experience.  See, I told you it was a rabbit trail.

Before this becomes so long it takes two sittings to read, let me tie all of this together.  I started by talking about our personal, and then national debt problem.  We need to take responsibility for our own debt first, and then tackle the debt on a national basis.  That would be ideal.  However, we do not have that luxury.  We need to tackle both simultaneously.  If, our Federal government drops the ball and doesn’t reign in spending, then it will become even more important that we address our own debt issues.  Just as the Federal government wants to kick the can to the next generation and the next, we too want to put off paying for things today.  Part of us hopes we can pay off our debt with inflated dollars.  The only problem is that in so many other places our inflated dollars are buying less and less.  This is why we must demand the painful fiscal medicine, even though it will not taste good, feel good, or be enjoyable.  We must demand it or we will die a slow and painful death from 14 trillion microscopic paper cuts.

Two Years Still True

Two years ago I replied to somebody’s blog post with this:

I agree we need to “make some changes around here”, and I like the idea of not completely abandoning government. We want government! We just want it to be more efficient, smaller, and less of a burden. Bringing about these changes will require a shift in how the voter thinks.

We need to fund voter education. Now, here is the challenge. If we want government to be efficient, smalller, and less of a burden, then we need to figure out how to do the exact same thing with this movement.

Could you imagine what would happen if we elected a TEA candidate in place of Pete Visclosky? Could you imagine if we spent less than $20,000 to do it? Now imagine if all the members of the house were unseated for the same amount. That would cost $8.7 million. Contrast that with what Obama spent to win… almost 86 times that amount. Now imagine if those TEA candidates went to Washington D.C. and cut federal spending that drastically!!! What if they converted Social Security into a private retirement program as the CATO Institute proposed years ago? What if Medicare, Medicaide, and welfare programs were turned into the insurance programs they should be, and you purchased the amount of insurance you wanted?

You see, if you did your own saving, and paid for your own insurance, you might get to a point where you have enough saved, where you don’t want the cost of insurance. If you have a rainy-day fund of 12 months of wages, without touching your retirement, then why pay a premium for unemployment insurance? Spend it instead on something productive!

I could go on, but basically the bottom line is common sense. We need to return to common sense. We need to help people realize that voting for their current member of congress, as likable as they are, means that we will get more of the same, regardless of current party.

 

Wow.  Did you catch the part about a real unemployment insurance program?  Could you imagine how much money this would save state governments, that are working like crazy to shore up failing unemployment programs, by of all things increasing the tax that employers have to pay.  Sounds like my small business will not be hiring anyone new any time soon.  It’s too expensive.  Oh, and how does that help get us out of the unemployment fix we’re in?

“Enough”

“The leech has two daughters.
‘Give! Give!’ they cry.
“There are three things that are never satisfied,
four that never say, ‘Enough!’:

the grave, the barren womb,
land, which is never satisfied with water,
and fire, which never says, ‘Enough!’

There is no doubt that this was not intended to be an exhaustive list.  God is not surprised by our government.  And he is aware of our problems.  The question I have is this.  Are we crying out to the right person to bring about change?  I know I am vocal about my desire to have our government live within its means, and begin paying down the debt instead of simply servicing it as so many have done with the homes they cannot now afford.

But at the core, is it likely that enough (there’s that word again) people will band together to elect men and women who will begin making tough choices, and reduce the largess of government?

It is more likely that God will hear, and we should cry out to him?  The people of the early Jewish nation were enslaved in Egypt.  The situation looked bleak.  Yet, God heard their cries, and brought about a change of heart, where the people of Egypt were glad to see the people of Israel leave.

So is it possible for something similar to happen in the United States?  Do you trust that God is able?  I say it is possible, and God is able.  I just pray he is willing.  Why would I think that he might not be?  For that I’ll leave you with another Proverb.

Whoever remains stiff-necked after many rebukes
will suddenly be destroyed—without remedy.

Unemployment is as Flawed as Social Security

Unemployment insurance is based on having those who are employed pay benefits for those who become unemployed. That’s crazy. That’s not insurance! And it doesn’t help much. Take a person in Illinois making $84,000.00 per year. This fake insurance would pay them $534 per week for 26 weeks. That’s the annualized equivalent of $27,768, or roughly 1/3 of what they were making when they were employed.

Now, let’s suppose that this individual had been employed at this level or higher for 20 years. Their employer would have contributed $7,626 in taxes over that timeframe. And you would have contributed to taxes too… but that is harder to find and figure out what part of your tax is going there. So, if you paid anything more than $6258 in any type of unemployment tax, you will be getting much less than you paid for, and the help isn’t really enough to get you through a tough time, based on your 20 plus year standard of living.

What would be better you ask? How about real insurance? Seriously. If you drive a car, and have lots of accidents you’re going to pay much more in insurance premiums. But if you are a safe driver, you should have lower premiums. Apply that same concept to unemployment insurance. Your premium should go down the longer you are employed. And you can choose how much you pay for what level of coverage.

The market would determine risk, and set premiums. The market would monitor for and prosecute fraudulent claims. And the cost to government and employers would go away. Having that cost to employers go away makes it easier for companies to employ workers, and that helps to eliminate or at least reduce the risk of the insurance.

So, unemployment “insurance” is actually counter productive in my view because it makes employers hesitate to hire workers, because if they then let them go, they will be faced with higher unemployment taxes.

Surely we can figure out a better way to help those who wish to work transition from one job to another, without taxes! Private true unemployment insurance for the benefit of the employee, and under their complete control would make that a reality.