NATIONAL: 'Tis the Season!

Just got in an email from John U - thanks for the laugh, buddy. Have a great Christmas - hope all is well. Haven't seen or talked to you in a while - maybe 2013? Click image to enlarge.

Another funny one, sent to me by R1:
An old man was asked, "At your ripe age, what do you prefer to get - Parkinson's or Alzheimer's?"
The wise one answered, "Definitely Parkinson's.  Better to spill half an ounce of Jack Daniels, than to forget where you keep the bottle!"

Below: one of our elderly friends, barely escaped this tragic wreck, but D*MN if he didn't remember where he kept the jack! Some would say that he was lucky to walk away, but I say he was lucky to get Parkinson's instead of Alzheimer's, since he managed to find the bottle of jack hidden in the glovebox while waiting for the Jaws of Life to pry him out of the wreckage! (Note: I normally do NOT put photos of anyone who is recognizable, but in this case, it really could be any of us with a bottle of Jack plastered to our face!). Click Photo to Enlarge.

Click Here to go back to "Tim Waag Blog" Home Page!

NATIONAL: Soak the Rich, No Matter What!

No, I am not in the 1% - not even close. Perhaps within the Top 20%, but I'd have to look it up and I'm just too busy (or too lazy) to do it - I'm not sure which. I'm on an overnight coffee buzz, as I just stayed up all night as a volunteer supervisor at the Homeless Shelter Overflow hosted by the Carmel Lutheran Church in SLO. So I may be using poor, sleep-deprived judgment in writing this, but hey - I'm going for it anyways...

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SOAK THE RICH, PART II - ELIMINATE HOME MORTGAGE DEDUCTION

Just got through reading a story from the Los Angeles Times dated 12/10/2012 that indicates that Fiscal Cliff negotiations may include reducing but NOT eliminating the mortgage deduction (click here to read it).  

BACKGROUND (EDUCATE YERSELF): When the federal government first began collecting income taxes from us in 1913, the mortgage interest deduction was allowed at that time, along with any other consumer interest, including credit card interest deductions and auto loan interest deductions. In 1986, the tax code was modified to eliminate the credit card and auto loan deduction, but the mortgage deduction was specifically kept because then-president Reagan said he wanted to keep it was a way to help common folks achieve the American dream of home ownership.  Those who say that the mortgage interest deduction was NEVER meant to help Americans buy and afford homes would appear to be INcorrect. More recently, the home mortgage interest deduction was limited to mortages on up to $1,000,000 and you can read about that here. I was not able to find out when the $1,000,000 limitation went into affect, but it was fairly recently.

Statistics have shown that mortgage interest helps those with household incomes over $100,000 much more than those below that income level. In fact, 78% of the $83,000,000,000 (83 billion dollars) went to those with household income above $100,000. Fair enough. I would not personally call those making $100,000 a year, especially in places like Los Angeles, New York and San Francisco, "rich". I would call them upper middle class, so let's go with that. The mortgage deduction really helps upper middle class citizens own homes - these are the homes that are built (think contractors) and maintained (think plumbers, electricians, etc.) by lower and middle income earners. Wonder what reduction in the mortgage interest deduction would do to those lower earners? The law of unintended consequences would rear its ugly head again (it almost always does), should reductions in mortgage interest deduction go into affect, in my opinion.

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SOAK THE RICH, PART I - STATE DISABILITY INSURANCE
"What an Outrage: Millionaires Get Unemployment, Too" Click on the article and read it, then read my comments below. The article is from the December 2012 AARP Bulletin, Page 8 (yes, I'm THAT old).

The AARP is irrationally opposed to millionaires who PAY THE MANDATORY UNEMPLOYMENT INSURANCE PREMIUM (aka State Disability Insurance, or SDI), and then when they get laid off, have the NERVE TO ACTUALLY TRY TO COLLECT on the insurance that they PAID for! What an outrage! Shouldn't they just shut the F*CK up and pay their mandatory unemployment INSURANCE premiums, and then when they are laid off, shouldn't those D*MN millionaires just forego collecting on the SDI they already paid for? Is this where our society is headed - Soak the rich, no matter what?

Surely, the 1 percenters don't understand how insurance works - collect on an insurance policy after they paid their premiums - how dare they? And what's next? How about having our wise and willful government confiscate the auto insurance pay-out of millionaires when they get into an accident? Isn't that the same thing? Just have the millionaires who reliably pay their auto insurance, then when its time to collect (i.e., their car is damaged by others), what right do those D*MN millionaires have to collect on their auto insurance policy? Doesn't our government need it more than the millionaires need it to fix their car? Whew. Glad I'm not a millionaire - the new public ENEMY number one, apparently.

New Legislation Proposed?:  The geniuses at the AARP note that lawmakers are proposing legislation to make the millionaires continue to PAY for unemployment insurance, but NEVER be able to COLLECT. The legislation is called "The Ending Unemployment Payments to Jobless Millionaires Act" (hey, at least the name is accurate for once!), and it is said to have wide support. At least our representatives should have the B*LLS to remove the word INSURANCE from the SDI unemployment insurance payroll deduction line item on everyone's paycheck, should the legislation get passed into law. Maybe they could just call it the Unemployment Tax - just what it would become.

This is all part of an unwise trend towards Means Testing benefits and entitlements that would otherwise accrue to those who either:
(A) earn a big paycheck, or
(B) are frugal and have saved and invested for a lifetime.

Read this fine article about the trend in Means Testing and Wealth Taxation by clicking here. Even though the article in "National Affairs" was written in the Fall 2011, it still applies today and gives a thorough treatment of the subject. Don't be ignorant - read the article and decide for yourself.

In case you don't understand how SDI works, here are some quick statistics for California. The bottom line is that millionaires pay a maximum of $1,009 per YEAR in SDI, and can collect up to a maximum of $1,067 per week.

WORLD: Psy Brings us Gangham Style & Suzie and the Terminators Brings us Micro-Manage Style

Stayed tuned for more on this cultural phenomenon.

Micro-Manage Style

Micro-Manage Style.

All the while.

I am the new boss and I’m not here to amuse ya,


Don’t want your in-put / cuz I’m here to abuse ya.


Everybody thinks they know / how to do their job.


But you know who does a better job? Do you?


I’ll give you a guess
:

It’s me and I’m the hardest one / to impress.


I’m not saying that you people need to be oppressed.

Suck up to me and kiss my feet until you are a pest.


You passed the test!


CHORUS:

And I’m the leader,
 the greatest leader.


Who’d have known? Me!


You should have known! Yay!

I run the office,
 so who’d oppose me?


Any of You? Nay!


How bout you? Nay!

It may have been a greatest fear, the CEO chose chose ch ch ch ch chose me
!!

Micro-Manage Style!


All the while!!

Work-work-work-work.

Micro-Manage Style!


Let’s chill for a while.

Back to work!

Hey – Do it my way!


Work-work-work-work-work.

Micro-Manage Style!


Hey – Do it my way!


Work-work-work, then work / torture!


I think you thought you knew just how to get along.

But I can see you even / drink your coffee wrong.


You should throw back hot shots, and drink it extra strong.

Your five-minute break still / way too long.

Teach-a how to dress.

You can-not come to work here / in that awful vest.

Need to change your hair because it’s just / not the best.

By the way, you really smell / so here’s a bar of Zest.

‘Member more is less!

CHORUS:

Micro-Manage Style!


Make sure and smile!

Micro-Manage Style.


You’re in denial.


All the while.

Hey – Do it my way!


Work-work-work-work-work.

Micro-Manage Style!


Hey – Do it my way!


Work-work-work, then work / torture!


I’m in your head, always in your head.

Even when you are asleep and layin’ in your bed.

I’m in your head, always in your head.

Even when you are asleep and layin’ in your bed.

What I say!

Micro-Manage Style!

Hey – Do it my way!


Work-work-work-work-work.

Micro-Manage Style!


Hey – Do it my way!


Work-work-work, then work / torture!


Micro-Manage Style!

WORLD: Becoming a Millionaire is a Skill

FANTASY: Let's suppose we take all the wealth in America and divide it evenly between all the folks currently in the country (legal and illegal). Then we say "Go", and let everyone go about their business. 

Within a year, what do you suppose will happen to that equal distribution of assets? Answer: those who are good at hustling and making money will, once again, become the 1%. That much is obvious, but why? Because making money is a skill that some people are good at, and no matter how much the government intends to "soak the rich", it only ends up hurting the lower and middle class, because the rich know how to work within ANY system and make money. 

Think of the rich as having skills like Michael Jordan, Kareem Abdul Jabbar or Magic Johnson, only in financial instead of basketball terms. You might not like this fact, and you may agree with decisions that fly in the face of this reality, but reality it is. Below, we have some recent real world examples from Britain and France that illustrate this point rather vividly. 

THE SCARY FISCAL CLIFF: During the current negotiations regarding the so-called "Fiscal Cliff", much is made of taxing the millionaires and billionaires, because they can "afford to give a little more". That much is true, though digging deeper into this issue is much more interesting. Shall we? 

There is a neat little article on Britains Missing Millionaires. I'll pause while you read it. Here's a favorite quote from the article: "A funny thing often happens on the way to soaking the rich: They don't stick around for the bath." Okay, if you didn't read the article, here's my synopsis:

• Britain 2009: 16,000 taxpayers declared income of a million euros or more, at the current federal tax rate of 40% (higher than the rate in the US today).
• Britain 2009: These 16,000 millionaires pay 13.4 billion euros in taxes, or 9% of all federal taxes.
• Britain 2010: Top tax rates raised from 40% to 50% in order to "soak the rich" to pay for all the goodies.
• Britain 2010: Millionaires say "we're not gonna take it anymore" (regarding the higher 50% rate) and leave the country in droves.
• Britain 2010: Now there are only 6,000 millionaires (down from 16,000 the year before). These remaining millionaires pay only 6.5 billion euros, amounting to a mere 4.4% of federal tax receipts. Tax collections from those making a million dollars or more have been reduced by MORE THAN HALF! Instead of raising revenue, this clever rate increase dramatically REDUCED taxes collected - I'm shocked!
• Conclusion: Rich people aren't the stupid fellows that the Obama-ites that re-elected him think they are. They won't take a tax fleecing without a fight - what a surprise! Rich people get rich by knowing how to make money and how to keep it, because its a SKILL!

The story doesn't end there, however. Let's move on to France. The French failed to observe the behavior of their British brethren across the English Channel (see above), and recently topped them with a top tax rate of 75% - that will certainly soak those rich buggers! Now we get to read about France's Missing Millionaires. An interesting side affect of the rich French folks leaving is that they have decided to put up their fancy mansions on the market at fire sale prices, and the foreign SUPER rich have moved in to snap them up, knowing that they won't have to become a taxpaying resident of France and pay the 75% income tax. The result? The French (and the Brits, for that matter), end up LOSING tax revenue by raising rates to an intolerable level, and as a bonus, the French get to have foreigners (mostly Middle Eastern oil sheiks, it would seem) owning their historic French mansions - I'm not seeing this tax increase ending well for the French, either, no more than it has for the Brits before them.

Are you still feeling good about the current movement to "make the rich pay their fair share" in this country? I mean, after all, the 1 percenters in America only pay 40% of all federal income taxes - shouldn't that be higher? That's a trick question, so be careful how you answer it!

(Secret answer: see how the French and British higher earners reacted to tax increases, and then assume that the American rich are even smarter and more clever than their European counterparts, and you'll have your answer).

If you are still not convinced, look at what happens to regular old folks who win the lottery: usually, within a few years, they have lost it all due to bad decisions. The winners often wish that they had never won at all! Why, you ask? Well, because they don't understand money: both how to make it and how to manage it, and consequently, its like being given a Los Angeles Lakers jersey and getting to start for the team - despite your good fortune, you just don't stand a chance!

Here's is one of my favorite quotes (I'm NOT making this up) from the above article on Lottery Winners who ended up Losers: 

"In 1998, William "Bud" Post III won $16.2 million in the Pennsylvania lottery, only to later wish it had never happened. That's because his brother hired a hit man to try to kill him and his sixth wife (and was arrested for doing so), other relatives made him invest in businesses that never paid off, a landlady made him give her a third of his winnings, and Post "spent time in jail for firing a gun over the head of a bill collector." He declared bankruptcy and, in 2006, at the age of, 66, "died of respiratory failure... at a Pittsburgh area hospital"

NATIONAL: Can Drowsy Drivers Sleep in their Vehicles?

Dear SLO Homeless People,
If you have been cited for sleeping in your vehicles, perhaps this is a way to prove your innocence and get out of the citation. Law enforcement has to decide whether they want you driving on the road while dangerously drowsy, or napping on the side of the street your in your vehicle or RV. If you are too tired to drive, then you should be able to sleep in your vehicle to prevent getting prosecuted by law enforcement for drowsy driving - a recognized illegal activity, according to law enforcement.  Read on:

As newly licenses drivers, we were taught to pull off to the side of the road if we were too tired to drive and take a nap - that is, go to sleep. Drowsy drivers are finding themselves in the news, after some high profile criminal prosecutions of drowsy drivers have made the national stage. The most prominent case is that of bus driver Ophadell Williams, who crashed a bus on March 12, 2011, killing 15 passengers; you can read about it by clicking here.

When I have been too tired to continue driving, I have pulled off the road and slept in the back of my truck. Several times, law enforcement has harassed me for just this such activity, despite my protestations about being too tired to drive. I have now clipped out an article from today's San Luis Obispo Tribune Newspaper to keep in my car. In the article, it points out how driving while drowsy is a prosecutable offense, according to current law enforcement.

At the web site, DrowsyDriving.org, there are facts and statistics on the danger of driving while drowsy. I picked this selection from the Drowsy Driving web site to illustrate the benefits of pulling over to take a nap:

Sleep deprivation and fatigue make lapses of attention more likely to occur, and may play a role in behavior that can lead to crashes attributed to other causes.

• According to NSF’s 2000 Sleep in America poll, when they are driving drowsy, 42 percent of those polled said they become stressed, 32 percent get impatient and 12 percent tend to drive faster.
• In the same poll, about one in five drivers (22%) said they pull over to nap when driving drowsy. Older adults are more likely to pull over and nap than younger drivers, who are most likely to drive when drowsy and least likely to pull over and nap.
• People tend to fall asleep more on high-speed, long, boring, rural highways. However, those who live in urban areas are more likely to doze off while driving compared to people in rural or suburban areas (24% vs. 17%).
• Most crashes or near misses occur between 4:00 – 6:00 a.m.; midnight – 2:00 a.m. and 2:00 – 4:00 p.m. are also peak times for crashes to occur. Nearly one-quarter of adults (23%) say they know someone personally who has crashed due to falling asleep at the wheel.
• In NSF’s 1999 Sleep in America poll, 60 percent of parents with children who drive living in the household said they have not discussed the dangers of falling asleep at the wheel. In the 2002 poll, nearly all respondents (96%) agreed that information about driving while drowsy should be included in tests for a driver’s license.

DEATH VALLEY NATIONAL PARK: Just for Fun!

In the fall of 2012, we had a nice trip into Death Valley National Park to one of our favorite slots: Grotto Canyon, located in the north end of the Panamint Mountain range. Enjoy the photos, though they do not begin to capture the essence of Grotto Canyon's maze of smooth, twisty passages - wish you could see some of the video we took during this hike-and-climb. Click on the photos to enlarge them.

The lonely trailhead.

The mouth of Grotto Canyon: Death Valley's climbing paradise, and you usually have it all to your self.

Lots of fun dry fall climbs.

There's no end to the amazing hard rock narrows.

Its best to bring a small group and a rope to make it up the falls. Most exposed falls can be circumvented with amazing canyon rim hike-a-rounds, like the one below:

You get to squeeze through endless narrow passages.

 Up high in the canyon, we enjoyed fine sunset views of the Death Valley (aka Mesquite) San Dunes.

Tim and Andrew poses near the finish of a great day of Grotto Canyon mash-ups.

Couldn't do a posting without a nice farewell-until-next-time, happy-trails, sunset-shot!

Hope you enjoyed these wonderful photos from an unforgettable outing - our 4th one to Grotto Canyon. Some day we hope to have climbed all of the main and side canyons here. On this climb/hike, we were only able to cover most of the main canyon and the revered 3rd side canyon. In the process, we discovered an arch that we were not aware of in the park before - arches are rare in the hard rock of Death Valley National Park. I found a link to a very nice description of Grotto Canyon that you might enjoy. Note that the tattered, faded, tiny sign leading drivers off of Highway 190 onto the dirt road to the Grotto Canyon trailhead is now COMPLETELY GONE! So you'll just have to find the road without the aid of the sign.

NATIONAL: You Can't Spend That!

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UPDATE 11/29/2012 - Just saw some numbers from Bob Brinker's Market Timer Newsletter. It noted on page 3 of the November 5, 2012 edition, that the HUGE imbalance between federal spending and federal revenue is UNsustainable. Federal Tax Revenue is 17.8% of GDP, while Federal Spending is 23.3% of GDP - that is a difference of 5.5% of GDP. Traditionally, like in the last 30 years or so, federal spending has been around 20% of GDP; that sounds like a good number to shoot for to me.

Every household KNOWS that you cannot continue to spend more than you take in - FOREVER. It has to end sometime, whether you choose to end it, or whether it ends in a crisis and ends of its own "natural" causes. The current so-called Fiscal Cliff impasses is a great opportunity to put fed expenses and revenue more in line with each other. Let's hope our leaders learn to compromise and accept some additional taxes in exchange for some substantial spending cuts. Yeah, right - that will happen - like the good ol' snowball in h*ll.

Note also (at the end of this post) my prediction that Obama would win another term in a close election; I put it in bold and large below so that you can find it.

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UPDATE: 8/23/2012 - Looking back to 2010, Obama's Simpson-Bowles Deficit Reduction Commission put together a debt reduction plan that was all but ignored. It included many fiscal control items that both sides agreed to, but the plan was not acted upon. Irresponsible. If our national leaders do nothing to reform Medicare and other programs, it will go bankrupt and possibly bring down our economy. Senator Lieberman said in 2011: "We can't save Medicare as we know it. We can only save Medicare if we change it". Our political leaders have gone to great lengths to avoid dealing with the annual Federal Deficit of over $1,000,000,000,000 (that's $1 trillion) per year.

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ORIGINAL POST: I view government finances much like I view a family finances. You have to learn how to live within your means. If you spend more than the breadwinners bring in, you're going down - financially speaking. It should be the same with our Federal, State and Local governments. Even our President believes this, but the debt still keeps going up more than $1,000,000,000,000 (1 trillion dollars) per year.

Traditionally, our Federal Government, over the last 30 or 40 years or so, has spent around 20% of America's GDP (Gross Domestic Product) - though sometimes a little less. Since Obama, that number has gone up to about 24 to 25% - money that we do not have and should not be spending. If your family did that, you would go bankrupt. If your income goes down (as it has with many), your family would have to find a way to cut back and live within your means - you cannot print money. But our Federal Government can and does. It must stop. Despite what you read and hear, this is the primary motivation of the Tea Party.

George Bush was almost as bad as Obama and similarly spent like the proverbial "drunken sailor". Americans foolishly do not re-elect politicians who tell them the truth (that they don't want to hear), especially when it requires tightening purse strings, cutting back, and getting our fiscal house in order. Instead of Obama telling us "You Didn't Build That", we should be telling him "You Can't Spend That". Here it is - an Obama rant that I can agree with:

"The fact that we are here today to debate raising America's debt limit is a sign of leadership failure. It is a sign that the US Government cannot pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government's reckless fiscal policies. Increasing America 's debt weakens us domestically and internationally. Leadership means that, "the buck stops here.' Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better."

---Senator Barack H. Obama, March 2006

Unfortunately, my projection is that Obama will win another tight election and remain in office, although the GOPs VP candidate Ryan may change that dynamic a bit (though I doubt it). We deserve the leaders that we elect, and I'm afraid the economic malaise that we are now in (low growth, high unemployment, ala Europe), which they are calling "the new normal", may stay around for awhile - and we will deserve it.

Fortunately for my family, the business we are in (employment law) benefits from the complex and irrational State and Federal employment laws. These policies drive employers nuts, and are so complicated that they are almost impossible to actually understand and comply with, should you be so inclined to spent immense amounts of hard-earned cash trying to do so. Honest, hard-working business owners employ our firm to help them comply with the employment laws that are just to complex for the average owner too understand, or they just don't have the hours necessary to invest in understanding them.