41 responses so far ↓

• 1 tom // Oct 28, 2008 at 3:32 pm

  I fall under the $66-111K range.

  Regardless of who wins, I highly doubt any taxes will be cut. Especially when our nation is leveradged up to our eyeballs!

• 2 HokiePerogi // Oct 28, 2008 at 9:59 pm

  Would you mind sharing the source of the graphic you posted? I’m assuming it wasn’t created by you. If I’m mistaken and you did create it, great job and where did you pull the data from?

• 3 LivingAlmostLarge // Oct 29, 2008 at 11:16 am

  http://media3.washingtonpost.com/wp-dyn/content/graphic/2008/06/12/GR2008061200193.gif

  I have to wonder how many people will have their taxes raised under Obama.

• 4 Pearl // Oct 29, 2008 at 12:49 pm

  Nobody familiar with our economic and fiscal situation can possibly believe that Obama means what he says about his tax plans.

  First, he has already publicly acknowledged that raising taxes on the “rich” will further hurt the economy. Unless he wants to preside over the worst unemployment rates since Herbert Hoover and FDR, he’ll have to abandon those plans.

  Second (and the reason for First above), the “rich” don’t just sit still to be scalped. A big part of the stock market crash is people, like me, liquidating our positions in stocks we have gains in, so that the one year in 10 or so that we are “rich” is 2008 rather than 2009 or later. (Just like I’ve been putting off buying a couple of guns for years, but will have to do it before the end of the year if Obama wins.)

  Third, from everything I’ve heard Obama say about his economic philosophy, it is clearly more important to him that the country’s wealth be “spread” more evenly than that the country’s wealth be increased. His statements about the failure of the civil rights movement to accomplish “redistributive” change, and the tragedy of the Constitution that it does not mandate economic equality, make that clear.

  Finally, this graphic is very misleading in treating the benefits to people in the bottom three rungs as “tax cuts.”

  Although it’s hard to read in the graphic, it does say that 60% fall in the bottom three rungs. Almost all of those people pay practically nothing in taxes now, which is why McCain’s plan doesn’t “save” them much - because you can’t really cut taxes for people who don’t pay taxes.

  In my work, I see a lot of tax returns, and most people would be surprised to know how few people below the upper-middle class pay any income taxes at all, especially if they have kids. Yesterday I was reviewing a return for a couple with three kids who had combined salaries of nearly $80,000 and a $10,000 IRA early withdrawal. If it hadn’t been for the tax and penalty on the IRA withdrawal, their total income tax would have been less than $500 for the year. That’s right: They would have paid less than $500 on an income of almost $80,000. Since when do we believe that people in that kind of an income bracket should shoulder NO part of the costs of their government?

  What Obama calls a “tax cut” for most people in the bottom three rungs is actually a welfare check.

  Is it wise to put more than half of our population on welfare, at the expense of 1% or even 5% of our population? Imagine going to dinner once a week with 20 of your neighbors. All of you get to vote on where to go, what to order and what to tip, but only one of you gets the bill. I don’t care how rich that person is, it’s a bad system.

• 5 Jim ~ mydebtblog.com // Oct 29, 2008 at 3:14 pm

  I guess you haven’t noticed that over the past few weeks the people earning less than 250k, wait make that 200k, wait make that 150k will get a tax cut. If we can’t get a firm answer about where the line is drawn between tax cut and tax increase, why believe anything? I highly doubt there will be a tax cut as much as I believe it would be suicide to increase taxes more. His tax policy has changed many times in the past few weeks, even you should be able to admit that.

• 6 LivingAlmostLarge // Oct 29, 2008 at 4:10 pm

  Pearl, I am a dual income earner shouldering the burden for the couple making $80k with 3 kids. Trust me I am. I am about to be hit by AMT potentially but it is what it is.

  If I recall right now we are in a huge deficit and have doubled our national debt in 8 years. Either way, I’ll still be paying way more taxes than people with kids. And even after I have kids I KNOW I don’t qualify for the child tax credit and am more likely to hit AMT. hahahaha.

  Try living in CA. I’m getting a huge break living in MA because I pay 50% less state income taxes than CA.

  I think the economic climate makes it difficult to offer a tax break. BUT I do believe they will try to help the middle class which is where it needs to be. Rich keep getting more and more cuts?

  Hello Warren Buffet pays 15% in federal taxes? Which is more than me $$ but less percentage wise and he SAYS its’ unfair?

  Why is the richest man saying it’s unfair? Because it is. Please Pearl, I assume you’re an accountant. Explain to me why multi-millionaires who live off dividends and interest pay less than my DH and I who aren’t multi-millionaires? Why should I cry them a river or play a violin that they will be paying 38% like me?

  Forget it. They need to pay more. When people making $200k/year from income not dividends, earnings pay more % than those making millions from Long Term Capital Gains, Dividends, interest, you can’t help but feel like getting the shaft.

  FWIW, I’ll likely get there, but I’ll pay my taxes.

• 7 Pearl // Oct 29, 2008 at 11:31 pm

  Any multi-millionaire whose income consists only of dividends and interest in non-retirement accounts is payng plenty of taxes.

  Warren Buffet made his fortune buying up businesses that were forced to sell so they could pay estate taxes on the death of the company’s founder. I’m not surprised he likes high tax rates; they helped him get very rich.

  If Warren Buffet really thought taxes on people like him should be higher, he would pay whatever extra he thought was fair to the U.S. Treasury. It accepts all donations. Instead, he pays billions to the Gates Foundation. Why? To AVOID taxes, and because he believes the foundation, with no doubt some input from him, will make better, wiser use of the money than the federal government will. Same with all the other fatcats who are spending millions to elect Obama. I doubt that a single one of them has ever sent the Treasury an extra nickel, and their tax avoidance accounting fees each year are probably more than what you and I make combined.

  If you want to pay more taxes, go for it. Nobody is stopping you.

  As for paying higher taxes on long-term capital gains, here’s an example from my own family.

  In 1965 dad and mom buy a rental duplex for $15,000. (Long time ago, fairly depressed town.)

  Thirty years later, they sell the duplex for $60,000. They have $45,000 in capital gains, right? Under today’s rates, assuming they have other income from pensions etc., they would pay 15% tax, or $6,750. (They actually paid more, in 1995.)

  But after inflation, the sale price would have had to be $72,400 just to break even! So in fact, they pay $6,750 taxes for the privilege of losing $12,400.

  A very typical example: Small business owner Joan took the chance of starting a business 30 years ago, investing $100,000.

  Nearly 90% of small businesses fail over that period of time - a “tax rate” if you will of 100% of their invested capital and labor. But Joan was smarter and worked harder than the rest and her business provided a nice middle class life for her and her family. When she wants to retire, she sells it for $1,000,000. Her gain is $900,000 and she’ll pay taxes on all of it. She’s RICH!

  Of course, $338,000 of the price is really just getting her money back after inflation, and that money is her retirement fund for the rest of her life, and all the estate she has to leave to her children. After accounting for inflation and capital gains taxes at the current rate, she has $527,000 for the rest of her life. Is she really rich? According to Obama she is. And according to you, she “needs to pay more” taxes. Really?

  Considering how risky starting a business is and how many people depend on those businesses for their jobs, do we really want to further discourage and punish the few successful people?

  Most people who are “rich” in income are only rich a few years out of their lives, and those years often make up for plenty of lean years. The class envy and hatred that Obama’s campaign has encouraged is really going to do a number on business start-ups in the future. Which will do a number on employment. Which will lead to yet more taxes on the rich and the less rich. And so on.

• 8 fengshui // Oct 30, 2008 at 2:05 am

  2.1% tax break

• 9 fengshui // Oct 30, 2008 at 2:13 am

  “Considering how risky starting a business is and how many people depend on those businesses for their jobs, do we really want to further discourage and punish the few successful people? ”

  Business owners who bring in a NET profit of $250k or less per year, will NOT see a tax increase. How many small businesses do you see netting $259k? Not many. In fact, less than 4% of them…… Obama’s plan will do nothing to prevent a small business owner from starting up a business.

  There is “class” hatred right now. There is no longer a nice bell curve of wealth distribution. It looks like a barbell an

  d the middle class is disappearing. I would like to see someone in office that comes from a blue collar family and worked their way up, and knows first hand what a pell grant is, and not some snob who comes from “old money” and has absolutely no clue what it is like to make it on your own and pay your own way through school.

• 10 fengshui // Oct 30, 2008 at 2:18 am

  “(Just like I’ve been putting off buying a couple of guns for years, but will have to do it before the end of the year if Obama wins.)”

  Why don’t people vote about things that really matter. Obama isn’t going to take away the right to own a firearm for crying out loud. Just like people think that a republican is going to come in and overturn Roe V Wade. It isn’t going to happen. They are political stunts and people take them hook, line, and sinker, just like they are “supposed” to……

• 11 fengshui // Oct 30, 2008 at 2:22 am

  “Yesterday I was reviewing a return for a couple with three kids who had combined salaries of nearly $80,000 and a $10,000 IRA early withdrawal. If it hadn’t been for the tax and penalty on the IRA withdrawal, their total income tax would have been less than $500 for the year. That’s right: They would have paid less than $500 on an income of almost $80,000. ”

  I agree, which is why McCain’s proposed dependent credit of $7k PER CHILD is ridiculous. You think that people with kids don’t pay taxes now, just wait…. It seems as if this country encourages breeding by those who can’t really afford it….

• 12 Kristy // Oct 30, 2008 at 4:50 am

  “I agree, which is why McCain’s proposed dependent credit of $7k PER CHILD is ridiculous. You think that people with kids don’t pay taxes now, just wait…. It seems as if this country encourages breeding by those who can’t really afford it….”

  Not everyone gets a tax credit for having children. I didn’t know that until we did our taxes last year and we didn’t get the credit. There are plenty of credits that you don’t get as you make more money, that is one of them.

• 13 Kristy // Oct 30, 2008 at 5:06 am

  “I agree, which is why McCain’s proposed dependent credit of $7k PER CHILD is ridiculous. You think that people with kids don’t pay taxes now, just wait…. It seems as if this country encourages breeding by those who can’t really afford it….”

  I forgot to add (forgive me its early and I have not had my coffee!) but isn’t Obama talking about doubling the child credit as well?

• 14 Jim ~ mydebtblog.com // Oct 30, 2008 at 11:08 am

  I don’t understand the basic concept behind why it should become a right or legal to take money from people who have earned in to give it to people who didn’t. The theory of trickle up economics is something that has never really been explained in a way that makes sense.

• 15 fengshui // Oct 30, 2008 at 1:14 pm

  I forgot to add (forgive me its early and I have not had my coffee!) but isn’t Obama talking about doubling the child credit as well?

  I haven’t read this anywhere YET. But I don’t agree with it. EVERYONE should pay taxes. I don’t care how many kids you have or how broke you are. Everyone uses public roads and services, we should all pay. But I don’t agree with a lot of the loopholes that wealthy idividuals and companies use to avoid paying taxes. In most European countries, and married couple with children will pay the same tax rate as DINKS or single people. 28%, 28%, 28%. Here it is if you’re married with kids, you pay 11%, DINKS 28%, and single 30%, and obviously adjust that to your wages….. It seems odd to me.

• 16 Kristy // Oct 30, 2008 at 1:34 pm

  “I haven’t read this anywhere YET. But I don’t agree with it. EVERYONE should pay taxes. I don’t care how many kids you have or how broke you are. Everyone uses public roads and services, we should all pay. But I don’t agree with a lot of the loopholes that wealthy idividuals and companies use to avoid paying taxes. In most European countries, and married couple with children will pay the same tax rate as DINKS or single people. 28%, 28%, 28%. Here it is if you’re married with kids, you pay 11%, DINKS 28%, and single 30%, and obviously adjust that to your wages….. It seems odd to me.”

  Actually the wealthy are not able to utilize the child tax credit. The cut off is $110,000.

• 17 LivingAlmostLarge // Oct 30, 2008 at 8:24 pm

  Obama will double the child tax credit, not increase it to $7k like John McCain. I will not qualify like I said for the Child Tax credit ever. Hahahaha.

  Pearl, what did Joan earn during her years of self-employment? My dad was “self-employed” forever. They make 6 figures from retirement accounts and pensions. And my dad sold his business and paid huge taxes.

  A successful business makes a good living, my FIL has a good business as well. If you aren’t making a good living then why are you doing it?

  The trickle up economy will be better Jim, because you are rising the minimum level people have to live. With this new class differential you have people falling more and more into poor. But the rich have to live with the poor. You either give them a hand up or a hand out.

  The trickle down figures they’ll be okay on their own. Turns out it’s not working. Turns out that the rich have gotten richer, but the middle class $48k income is less than the 1990s under Clinton.

  Why do we need to help the lower class? So they can become educated and help themselves. We toss them to free market healthcare, will they really change and be responsible? Indicators from this mortgage crisis says no.

  NEJM, Journal of Public Health, have said McCain’s plan will fail absymally and we’ll go to socialized plan faster than Obama’s semi-socialized plan (Personally I like hillarycare).

  So you implement a minimum level of coverage in insurance and care and there will be lower costs because people won’t go the ER as much and in dire conditions.

  You give out more grants to schools, not affirmative action by race but by class. Make it possible for people of lower economic standards to go even to public universities, which can be impossible. You can’t pay $20k/year for a public university if your parents make $50k/year. And student loans are DROWNING students. Average is $20k walking out the door with a bachlor’s.

  Pensions, unions, defined retirement plans are becoming extinct. So we have to help shore up the PGBG which guarantees pensions as companies go under.

  The US has the most cutting edge medical research. But standard care is middle of the Westernized world. Why? Because we have so much red tape and it’s not one system. Everywhere else it doesn’t matter if you are in Zurich or Basil you are covered. Here I go from Hawaii to CA, damn it I’m out of network and I’ll pay an arm and a leg for my care. Brilliant?

  But back to medical research. Our NIH budget has gone up but funding has gone down to 11% from 19% under Clinton. Why? Because inflation, so the money hasn’t risen proportionally. Too bad.

  I know I can pay more taxes. But if McCain gets in I guarantee you many people reading this will be worse off. Me? My DH and I likely will be busting our hump and be able to get to the “wealthy” side of the barbell. We’ll have help from our parents likely because of their hard work.

  But others? I see my cousin married a woman, who is the youngest of 6 kids. They are both accountants. They have a good life. Her 4 sisters and 1 brother? They are falling into the poor category. They aren’t slackers, they ALL work (men and women), but it’s not high paying jobs. They are secretaries, security, retail, etc. Decent blue-collar jobs. So why are they struggling so hard? Why don’t they deserve some help when they bought homes 10 years ago and are trying to make it? And yes maybe it’s because they have too many kids. BUT still they are working.

  So trickle up would help them. Maybe give their children a chance to go to college for free. Maybe get a better job and better opportunities. With the way things are going they aren’t going to be that fortunate.

• 18 fengshui // Oct 30, 2008 at 11:42 pm

  “You give out more grants to schools, not affirmative action by race but by class. Make it possible for people of lower economic standards to go even to public universities, which can be impossible. You can’t pay $20k/year for a public university if your parents make $50k/year. And student loans are DROWNING students. Average is $20k walking out the door with a bachlor’s.”

  I TOTALLY agree, LAL. I feel that I am a perfect example of this. I am an only child to two people who had me at age 17 and were HS drop outs. Luckily my parents were still able to get factory jobs with pensions and health plans. Those jobs don’t exist anymore. I didn’t have many opportunities growing up. We were poor. My parents didn’t own their own home until I was 16. They didn’t have money to help me with school. Thankfully, I am native american and I was able to secure near total funding for several college degrees. I’m now finishing my doctorate, and I feel that I will be a successful, tax paying citizen. I feel that that the opportunities that I’ve had, has made me a successful and educated person. And, I will pay a lot of taxes to boot I love the thought of helping other people who WANT help.

• 19 Kristy // Oct 31, 2008 at 8:51 am

  My response LAL was to say that the wealthy don’t get the child care credit, it is not a “loophole” for the wealthy.

  “The trickle up economy will be better Jim, because you are rising the minimum level people have to live.”

  All you are doing by raising the minimum level people are living is to raise the cost of goods. What do you think is going to happen whey you have to pay more to hire workers? You are going to pay more for these goods, more in taxes and then you are going to feel the squeeze and nothing is going to change.

  The following two links discuss economic mobility and taxes.
  http://online.wsj.com/article/SB120511125873823431.html

  http://www.ibdeditorials.com/IBDArticles.aspx?id=289527073199247

  “Why do we need to help the lower class? So they can become educated and help themselves. We toss them to free market healthcare, will they really change and be responsible? Indicators from this mortgage crisis says no.”
  We are already helping the lower class with housing, food, education, etc. They have plenty of help in the form of welfare, WIC, food stamps, child care, etc. They need to learn to help themselves too.

  “You give out more grants to schools, not affirmative action by race but by class. Make it possible for people of lower economic standards to go even to public universities, which can be impossible. You can’t pay $20k/year for a public university if your parents make $50k/year. And student loans are DROWNING students. Average is $20k walking out the door with a bachlor’s.”

  You already have that with grants, yes they have been cut the past year or two, but I was able to get grants, scholarships when I went to school. I graduated 8 years ago with $16,000 in debt to student loans. I grew up poor, worked two or three jobs to make it through college and I still did it. $20,000 walking out is not that bad. Go to community college, take 5 years instead of 4. People who want to go to college do go to college. They make it work.

  Neither candidate’s plan for health insurance is going to work, they both cost too much. I have no idea what to do with it, but I doubt if it will be fixed in the next 4 years no matter who gets elected. Obama’s plan costs far too much and where is he going to get the money??

  Why would you need help from your parents to get where you want to be? Don’t you already make more than they do? Shouldn’t you have to “bust” your hump to become wealthy? Or do you think it should just be handed to you? IMO, I think you SHOULD have to work hard to make more money. Nothing should be handed to you.

  Your family is struggling because they work in retail, secretarial positions etc. They too can build a better life for themselves if they choose to do so. It’s all about choices, anyone can go back to school to better themselves, many choose not to. If they are struggling they should be able to get grants, etc for college. Yes the kids may have to work (God forbid) but they can go. Nothing in life is free, you need to work hard for it.

  I too have siblings who work, not at high paying jobs, who have not gone to college, etc. In fact I am the only one (out of 5) who has gone to college. Why? Because I knew that I wanted a better life for myself and I knew that I wanted a better life for my kids. I knew that I would have to work hard for what I wanted and I have. It is all about chooses. I chose my path and followed it.

  I am not trying to come across as I don’t care because I do. I volunteer, donate to charities, pay my taxes, etc. I just don’t think its fair to tax just one segment of the population more and give breaks to people who already don’t pay taxes. I don’t mind paying taxes and the tax system is already progressive. I just want people to take responsibility for their actions and to do something about it if they don’t like the situation that they are in.

• 20 fengshui // Oct 31, 2008 at 12:49 pm

  “What do you think is going to happen whey you have to pay more to hire workers? ”

  No, companies will have to lower their profit margin. And this would NOT apply to small businesses with less than 50 employess. Keep people poor and uneducated, and you will have more crime and proverty and welfare. We will ALL pay one way or another.

• 21 Pearl // Oct 31, 2008 at 1:07 pm

  LAL, I want to congratulate you on your readership.

  The comments to this post come from all sides of the issue, and obviously we disagree, but all are civil and make their points without calling others names or attacking the motives or character of those they disagree with.

  Wish more of our national political discussions were like that!

  @feng shui - “Obama isn’t going to take away the right to own a firearm for crying out loud. ”

  I don’t know whether he will succeed, but I believe he will try. Yes, I know he says otherwise, but I don’t have to believe him and I don’t.

  Strong gun control leading to outright bans was his history in the state senate in Illinois, and it is the strong desire of his party’s liberal wing, of which he has been the most liberal member during his US Senate term. Given the Heller decision by the US Supreme Court, I am not worried so much about an outright ban immediately, but about burdensome and expensive regulations set up as hurdles to ownership - like the proposed requirement for marking every single round of ammunition so that it can be traced to a purchaser - which would price most target shooters out of their hobby and make it extremely expensive for me and others to keep in reasonable practice, which is the only responsible way to be a firearm owner. (Right now, I use a friend’s firearms for occasional practice and the ammo already costs quite a bit.)

  And depending on who he has to replace on the Supreme Court, the 5-4 Heller decision is not cast in stone and he has already made it clear that he will appoint judges based on their political philosophy - the first time a major-party presidential candidate has EVER made that an acknowledged criterion.

  So I do think that is an issue that matters. I agree with you on Roe, however.

• 22 Kristy // Oct 31, 2008 at 2:28 pm

  “No, companies will have to lower their profit margin.”

  Do you really think a company is going to lower their profits or do you think they will pass it on to the consumer? I think they will pass it to the consumer and goods will be more expensive.

• 23 fengshui // Oct 31, 2008 at 7:51 pm

  “Do you really think a company is going to lower their profits or do you think they will pass it on to the consumer? I think they will pass it to the consumer and goods will be more expensive.”

  If they still want consumers to buy their products, then YES, they will. It makes me SICK that companies move overseas and avoid paying taxes, AND pay people $5 a week to make products so that they can make $50 billion profit a year instead of $150 million. I mean, $150 million couldn’t possibly be enough to live on….

• 24 fengshui // Oct 31, 2008 at 7:57 pm

  My whole point earlier when I was ranting about upward mobility, is that if I happened to not be a minority, I’d have at least $75k or more in student loans. And who knows if I would have been able to make it this far without my fellowships and scholarships. How many people do you know, that were born to parents who were HS dropouts and grew up in near poverty, and ended up getting a doctorate and a comfortable salary? Not many, I bet. I will be a professional, (high) tax paying citizen as a result, and I feel that more people should have opportunities like that. Keeping people in poverty and decreasing their opportunities of upward mobility will only hurt our country as a whole. The wealth distribution will continue to look like a barbell instead of a bell curve, and that just seems wrong to me.

• 25 Pearl // Nov 1, 2008 at 2:11 am

  @fengshui

  On my mother’s side, neither of my grandparents went to school at all. Not for a day. They came here from Eastern Europe and worked hard and in order to become citizens they learned to read and write in English. After coal mining and pulp mill work, eventually my grandfather opened a barbershop and they raised their three daughters, all of whom completed high school and went to work. But I would put one of their letters up against any of today’s college graduates for clarity, expressiveness, spelling, grammar and punctuation.

  Those three women all worked as teenagers and young women, but quit when they married, respectively, a mill worker, a painter (buildings and facilities, not art), and a Navy sailor. It was the 40s, after all.

  Those three couples had two kids each. The six included: a Ph.D. college professor in organic chemistry at a major university, a CPA, a lawyer, a restaurant owner, a sales clerk and a casual laborer. (Two of them smoked a lot of pot - it was the 60s. Guess which?) Not one of them ever had a student loan or a government grant.

  Upward mobility is not about an affirmative action or government subsidized admission to college. It is the gift this country has given to millions of people by just LEAVING THEM ALONE! Not completely, of course. With their help, it protected them against Hitler and Hirohito, and later Stalin and his successors. But mostly, it let them do their own thing.

  As one of the grandkids of that original couple, believe me that I have no desire to “keep people in poverty” or decrease their “opportunities.” Those six grandkids have ten kids among them, and some of them have kids too, and I want them all to have opportunities.

  To my knowledge, not one of them has ever gotten a hand-out from the goverment for anything, other than Social Security, which they all would have been fine without.

  Yet I know there are sub-cultures within this country that believe they simply cannot survive unless some politician sets up a program to “help” them. Strangely, those sub-cultures usually do the worst. Look at the strongholds of the Democratic Party, like Chicago, Washington DC, Detroit, and you will see high crime, poor education, limited hope, and lots and lots of people who think their politicians are trying to help them. Not.

  What shape the wealth distribution curve looks like is pretty much irrelevant to your opportunities. Opportunities are about what you are allowed to do, not about what is done for you. You can wallow in envy of Bill Gates’s wealth, but that wealth doesn’t hurt your opportunities, it helps them.

• 26 LivingAlmostLarge // Nov 1, 2008 at 11:14 am

  Pearl thank you for the complement. I also am thankful that people don’t write awful things that would make me delete or censor my comments. All opinions are welcomed always welcomed.

  Kristy, they are struggling when before people could make a decent living working those sort of jobs. I’ve had many in my family previously not go to college and still be able to buy homes, provide health insurance for their children, live modestly, and retire with dignity. Now their children can’t do the same. I think it’s changed a lot from even 30 years ago. A lot has to do with the cost of college, the price of homes, lack of retirement plans, cutting of benefits like health insurance premiums once paid but no longer 100%, etc.

  There are less safety nets in place. Before Social Security used to be supplemental to pensions. But who has pensions? Why haven’t we heard whining? Because everyone had pensions. Now they don’t.

  Wait another 30 years and see if people have been responsible. I doubt it.

  I believe that inner cities need to have programs to help people get out of poverty. It’s a state of mind. And there are less programs. We need money to fund these programs though.

  How many social workers do you know are burnt out? But work insane amounts of hours for minimum pay? Like teachers, paying them so little when they do so much? Our social programs are failing because less people are going into them.

  The wealth curve does matter. The rising tide raises all ships. Well trying to raise ships that are sinking faster into the poverty levels, declaring BK, is not good.

  I wonder how much Barack Obama’s mother’s medical bills were when she died? I know many people paying tons OOP for medical emergencies. I’ve had friends in college have their parents foot the bill for a knee surgery not covered by insurance.

  These types of things quickly setup someone middle class meandering along into BK. Before Pearl, you have to agree your parents had insurance and pensions. Now you don’t.

  We all agree the rising cost of healthcare is due to uninsured people going to the ER. So what happens if we insured people? That means hospitals would have fixed amounts of reimbursements instead of being able to charge exorbitant prices for non-insured.

  Or why do all doctors want to be specialists? Because they make $300-400k, but a GP makes $80-100k? So hence the shortage of what we really need GPs. We need to force the AMA to start looking at these trends and limiting specialists and turning out more GPs. They also need to increase the number of MDs, which hasn’t increased since 1960s, unlike the population.

• 27 Pearl // Nov 15, 2008 at 9:27 pm

  Got a little involved in work and dropped the ball on this very interesting discussion; on the chance that anyone’s still paying attention, I’m back.

  Kristy and Fengshui can both be wrong about whether companies will lower their profit margins or pass higher taxes on to consumers. They’ll do whatever the market lets them do. If they can raise their prices without losing volume, they will. If they can cut costs without losing sales, they will. If they can’t do either and their profits suffer enough, they’ll go belly up or stand in a bail-out line along with the car companies, banks, etc.

  Most people don’t really understand what “profits” are, and make the same mistake.

  Profit is basically a piece of information. Yes, it’s money, but the purpose it serves is to INFORM. It informs people whether assets and costs are being well managed, whether products are desired by the marketplace and being priced right, and tons of other stuff. Its message is hard to read and comes with no guarantees, but it tells us stuff that could not even be guessed at without it.

  Most importantly, it tells investors, entrepreneurs and innovators where it makes sense to put their money, time and creativity. Cut back on profits or distort their already-weak message through taxes, and you cut back on those things, making the entire economy suffer.

  Fengshui, $150 million in profits may or may not be “plenty.” It depends on what information it conveys about the company. Would you invest $10,000 in a company that gave you a $150 a year profit? Probably not. Why not? Because that low a profit tells you the company is probably not worth owning a $10,000 chunk of. Would you accept $900? I would. But would you consider $900 an obscene annual profit on $10,000?

  If you sell something for a dollar and make 10 cents of profit, is that obscene?

  When everybody was going nuts about how huge Exxon’s profits were, did it ever occur to you to ask, how much money was invested in Exxon and what kind of profit margin was it making on its sales? In fact, its net profit margin was only a hair over 10%, which is good, but hardly obscene, and it has no guarantee it will make that much next year. Some years its profit margin is only 5%, and I’m sure its had some years when it had a loss.

  The politicians did alright on Exxon too; their “profit margin” on Exxon’s sales was about 7.4%, NOT COUNTING gas taxes; between federal and state taxes, these amount to between 45 and 60 cents per gallon of gas. The government got a lot more overall “profit” from Exxon than did its shareholders, even though the government shared none of the risk.

  For anyone interested in understanding economics, profits, information and human beings, I recommend the book, “Knowledge and Decisions,” by economist Thomas Sowell. It’s not technical at all and would explain this stuff much better than I can.

  LAL, I have to take isue with your claim that “everybody” had pensions and health insurance. Not a single person in my family tree, parents, grandparents, greatgrandparents, had either of those things, and neither did most people. They had paid-for homes, savings, and children to help them when they got old, and there wasn’t all that much that doctors could do for most serious illnesses so medical costs were self-limiting. The physically fragile or immune compromised were miscarried or died young from measles, mumps, influenza. If you survived to adulthood and didn’t die in childbirth or workplace accidents, you had a pretty good chance of making it to a ripe old age.

  I’m 56 and the only reason I have health insurance is because I’ve been paying for an individual policy since I graduated from college. I have no pension; I have IRAs and savings and a home that will be paid off before I’m 60. Pretty much like my grandparents. Without kids of my own, I try to be really really nice to my nieces and nephews.

  Those great pensions and insurance policies you yearn for are exactly why the car companies are about to go under, why we have so few remaining domestic manufacturers, and why government services like education, law enforcement, etc. are skyrocketing in cost and will soon implode.

• 28 LivingAlmostLarge // Nov 16, 2008 at 8:31 pm

  Pearl, no one in your family worked for the state as a school teacher or government worker military? And no one was unionized? Also previously private companies had pensions at a very high rate.

  In 1980 6o% of private workers had pensions. It peaked at 75% in 1985.
  http://www.freep.com/article/20081014/BUSINESS07/810140373

  Today 2008, 10% of private workers are covered by pensions. Now public workers/Government workers still get pensions.

  I don’t think I’m misstating in that many people had pensions. If 50% of workers are public then half are covered. And of the private sector more than 50% had a pension, now it’s 10% in the private sector, which is my experience is true, then it’s harder to say that people didn’t have better retirements in the olden days.

• 29 Pearl // Nov 18, 2008 at 8:04 pm

  “Pearl, no one in your family worked for the state as a school teacher or government worker military?” Aside from my father’s two years of service in the military from which he derived no pension and subsistence wages, that is correct. I had a great-grandmother who taught Sunday school, and I taught an evening class at a community college once at the request of a friend (total pay about $2,400) but I don’t imagine that’s what you meant.

  ” And no one was unionized?”
  That is correct. No one. Not one.

  My family were all job PRODUCERS not job consumers. My father was the most prolific job creator; I would estimate conservatively he provided other people at least 6,000 person-years of employment (which itself is a drop in the bucket to what many small businesses do). The rest of the family combined probably produced a fifth of that, not counting the jobs they created for themselves and their families.

  Most of these jobs were low pay, few benefits, no pension, although about 5% - manager level - were pretty good pay (but still no pension).

  Except for management, although some of the employees were loyal, dependable, honest and hard-working (and those usually ended up in management) many were not model employees. They were felons on work release, dopers, undependable, frequently involved in domestic disturbances that distracted them at work, undisciplined, considered their employers fair game for whatever kind of petty theft they could get away with. Some were so severely mentally challenged that they had to have supervision to sweep the floor. A bookkeeper spent half of her time dealing with the child support wage garnishments half of the men had against them. They were also salt of the earth, often kind and generous, friendly, funny.

  In other words, they were the kind of people who are never going to make good money or get a good pension because, as employees, they simply aren’t worth it. They will never contribute enough to an employer to make a “middle class” wage and a secure pension a fair bargain for the employer.

  So is it better for them to go on welfare or into some government make-work program or to get the employment they CAN do, at a wage that makes them profitable for the employer who has to put up with their numerous flaws?

• 30 Pearl // Nov 18, 2008 at 8:06 pm

  Your reference regarding the 60% private worker pension rate participation doesn’t pass the smell test.

  I looked at your source, and it specifies “workers in private INDUSTRY” not workers in the private sector or in private employment. The 60% figure would make sense if the reference is to industrial as in manufacturing workers, but not all workers. This would exclude retail, services, construction, fishing, agriculture, and many other private sector jobs. I suspect this is one of those cases of “figures don’t lie but liars figure.”

  Most people have always worked for small to medium size companies, and very few of those companies ever offered defined benefit pensions. The overhead cost alone of such plans has always been prohibitive for a small company, especially since ERISA.

  The article you derived your information from is entertainment or propaganda, not journalism. The dramatic decline in journalism standards and general education in the last couple of decades, combined with the rise of journalists who see themselves as the “agents of change” requires a great deal of skepticism in reading articles like that one.

  Just think about it. Do you seriously think the average farm worker, hair dresser, fisherman, waitress, car salesman, construction laborer, had a pension forty years ago? Not a chance.

  Also, if we ever get to the point that 50% of our employment is in the public sector, we might as well pack it in - the country will be doomed. Currently, government employment is under 20% of total employment, I think around 16%.

  I read blogs like yours because I need to be reminded frequently how intelligent people can be sublimely ignorant of the realities of where jobs come from and how they are made. If they understood this process better, they wouldn’t be so foolhardy as to think that government can actually “fix” it. When it comes to the private sector, government simply cannot create jobs — that ability belongs to individuals like my father. Government CAN make people like him throw up their hands and say, “To hell with it.”

  Anyway, we’ll all see how this works in the next few years because a man whose ideas of economics come from a foreign student groupie and a bunch of Marxist college professors will be fixing us but good.

• 31 fengshui // Nov 19, 2008 at 8:16 pm

  I didn’t EXPECT any type of “hand out” for college, I was elated when I found out that I was eligible for grants and scholarships! Sure, I may have come this far, but I would be about $80-$100k in the hole with loans. And sure, I could have just gotten an associates degree and stopped there, but it is a difference of me being able to make $35k a year or $100k a year. I want to be able to maximize my earning power since it seems that it is getting harder and harder to live on less…… I was just tying to make an example that programs DO generate postive results.

• 32 fengshui // Nov 19, 2008 at 8:26 pm

  Pearl is going the old “Marxist” route regarding Obama (just like Fox news did all day yesterday- aside from comparing him to HITLER, and yes, I’m being totally serious). I’ll take what is about to come anyday, after the last 8 years. And no, I don’t blame Bush for all of this mess, because that would be giving him a compliment. He was there to hold the floodgates open that were already set forth by Bush Sr and others……

• 33 Pearl // Nov 23, 2008 at 11:16 pm

  I’m really curious what kind of job Fengshui has that pays $100,000+ a year for watching Fox News all day. I’d like to apply, although the idea of watching any news station for a full day does kind of turn my stomach.

  As for Obama, I don’t think he’s actually a Marxist in the classical, theoretical sense. No practical politician could be today. But his rhetoric during the campaign was certainly based on Marxist notions of class struggle and class consciousness, and his political background in the Alinsky model suggests this rhetoric is fundamental to his thinking.

  What is obvious is that Obama categorically rejects the idea that people should decide for themselves the objects of their charity or the beneficiaries of their labor and creativity. Economic freedom is an affront to him, not a value to be protected.

  And once personal freedoms impinge on socially controlled economics, they too will quickly be vulnerable, in the interests of “society.” After all, if “society” is picking up the tab for our health care, why should we be allowed to make foolish health decisions like smoking or overeating or driving to the grocery store instead of walking? When the government is the ultimate mortgage lender, what are the chances you will be allowed to intall a high-flow shower head, just because you love that kind of shower?

  Like the parent who tells the rebellious teen-ager, “As long as you live under my roof, you follow my rules,” once “society” is picking up the tab, “society” will be entitled to make the rules. We will all be children then. For people who never grew up, this is a dream come true; for those who value their adulthood, their individuality, their freedom to be themselves and take responsibility for themseles, it’s a nightmare.

  I’m no defender of Bush; my assumption that he would abjectly surrender if not active enable Congressional profligacy under either party was the reason I supported Steve Forbes for the Republican nomination in 2000. About all I can say for Bush is that he took the national security threat of 9/11 seriously and never wavered in his commitment after most of the country forgot about the danger. Since there is no alternate universe against which we can compare results, we’ll likely never know whether we owe him our thanks or not.

• 34 fengshui // Nov 24, 2008 at 1:41 am

  “I’m really curious what kind of job Fengshui has that pays $100,000+ a year for watching Fox News all day”

  I watch fox news all day? Hmmmm. It is called an IPhone. And, for the record, I am a FT student, finishing my doctorate, who frequently surfs the web during class. I also work as an advanced practice nurse. I would certainly hope that after 5 college degrees and 10 years of FT school, that I can clear $100k…… There are many people out there with MUCH less education and experince than me who make much more than I do, like my friends in finance, insurance, and sales.

• 35 fengshui // Nov 24, 2008 at 1:51 am

  “What is obvious is that Obama categorically rejects the idea that people should decide for themselves the objects of their charity or the beneficiaries of their labor and creativity. Economic freedom is an affront to him, not a value to be protected.”

  Basically until we as a country can act and live responsibly, without buying things we can’t afford, and being able to secure our own healthcare, I guess that someone has to step in and set forth some regulations to basically protect us from ourselves. Because it is obvious when you open up the gates and deregulate everything, people get greedy, which is evidenced by our current credit crisis. Now, all of the “capitalist pro-deregulation” backers want to get bailed out by the government, but yet label Obama as a socialist at the same time that they are standing in line for their bailout check so they can go to a resort and get spa treatments courtesy of the US taxpayers. I just read that Citibank wants to be bailout now. GM is in line in front of them, and probably a few insurance companies, and who else….. ??????

  There are things that I particularly did not like about Obama, and he wouldn’t be my first choice for who I would like to see as president, but I certainly do not think that a damn thing would change with McCain in office. He made that clear by stating that a priority would be to cut taxes by 11% for those making $2 million or more a year. That was enough for me. People making that much don’t have to decide between paying their electric bill or buying food when they get paid.

• 36 fengshui // Nov 24, 2008 at 1:53 am

  “About all I can say for Bush is that he took the national security threat of 9/11 seriously and never wavered in his commitment after most of the country forgot about the danger.”

  I actually think that Bush knew that 9/11 was going to happen before it did, but that is a whole other story……. I won’t talk about it here because I don’t want to ruffle any feathers.

• 37 fengshui // Nov 24, 2008 at 1:56 am

  “Fengshui, $150 million in profits may or may not be “plenty.” It depends on what information it conveys about the company. Would you invest $10,000 in a company that gave you a $150 a year profit?”

  My point/ concern is more from the angle of some fat CEO collecting a $400 million severance package while the company exists in some 3rd world country that employs children, and work in unsafe environment, etc. That is what I have a problem with.

• 38 LivingAlmostLarge // Nov 24, 2008 at 9:38 am

  With all my carnivals and posts I haven’t the time to write about this, but I will maybe this weekend.

  But one MAJOR thing, Bush was not very serious about national security. Explain to me how going to war in Iraq was a war against terrorism?

  Pearl, please tell me you aren’t part of the Americans that believe that the Taliban were in Iraq? You know that Saddam, a guy Bush 1 and Reagan were friends with and supported in the 1980s hated them? He refused them entry into the country? So going into Iraq was not a war on terrorism. Nor was it going after Osama Bin Laden.

  So how was Bush strong on national security when most of us wanted war on terrorism, not oil?

  Also if you’ve been to that area of the world, many people do not see the US as liberators and spreaders of democracy.

  My roommates parents are coming back after a year sabbatical from their jobs, where they worked to help muslims in that area of the world. They said the anti-American sentiment is very strong there and it’s because we impose our “will” on everyone else. That and Christianity.

  I am not alone in saying that there is no way I would ever call Bush strong on terrorism. If anything they Taliban is stronger now.

• 39 Pearl // Nov 24, 2008 at 3:00 pm

  LAL, you ask me to “Explain to me how going to war in Iraq was a war against terrorism?” You may be sorry you asked! This turned out much longer than I anticipated.

  The first answer is simply that Al Qaeda has declared Iraq a central front in its war on us, its victory over us in Iraq a crucial first step in its ultimate victory over us everywhere and proof that it will eventually prevail, and until recently was devoting most of its resources to that front. It would be foolhardy to ignore that.

  You could argue, correctly, that Iraq did not become that “central front” until after we invaded, but that is irrelevant to what has gone on there for the last five years and to what must go on in the future.

  The second answer, and the thinking behind the original invasion in 2003, involves long-term strategic planning that has received short shrift in the hyperpartisan echo chamber of the mass media, but I’ll try to explain:

  First, let me ask you: Can you explain how invading Tunisia was an appropriate response by FDR to Japan’s attack on Pearl Harbor? I doubt it, because you probably didn’t even realize that Tunisia was, in fact, the first country the U.S. invaded after Pearl Harbor. Do you think FDR got confused, and thought Japan had training camps in Tunisia? Or is it more likely he saw Tunisia as politically and/or militarily an appropriate target in the long-term goal of defeating Japan and its allies, Germany and Italy?

  Similarly, the so-called “war in Iraq,” which really hasn’t been a war since April, 2003, was not about any belief that the Taliban was in Iraq, or that Saddam was behind 9/11. Bush has never claimed those things, although most people now believe, incorrectly, that he did.

  To simplify: Until 2002, there was not a single democratic nation-state in the Arab Middle East. Bush’s strategic theory after 9/11 was that merely eliminating Afghanistan as a safe base for Al Qaeda was not a long-term solution, but that it was, instead, necessary to help build some democratic states that would provide alliances for the US in the region and also give the people of the region some hope of improvement in their conditions because otherwise, they were vulnerable to Al Qaeda and Taliban-style totalitarianism. Bush believed, correctly in my view and I assume in yours, that in the long term, depending exclusively upon alliances with regional dictators was politically unwise and morally wrong.

  Iraq was the perfect initial target for that strategy for a number of reasons. The first Gulf War ended with a ceasefire, not a peace treaty, and Saddam had blatantly disregarded the terms of the ceasefire, creating a legal justification for removing him from power. The Kurds in the North and the Shia in the South could be counted on not to defend Saddam or resist his overthrow, and at least as to the Kurds, to create a ready-made pro-U.S. part of the country right off the bat. Saudi Arabia and Kuwait could be counted on to allow use of their territories for staging areas; although dictatorships themselves and therefore certainly not “behind” Bush’s long-term strategy, they saw Saddam as an ongoing threat to their own stability. All those things proved to be true.

  (Bush also believed that Saddam had resumed his programs for the development of WMD, and that his overthrow would put a stop to that danger. He shared that view with most of the world, with the Clinton administration, and with the preponderance of our intelligence establishment, but in that, they all proved to be wrong. They also all proved to be wrong about something else: the extent of WMD development in Lybia. This was learned after the Iraq invasion, which convinced Lybia to come clean and end its program. So although the threat from Iraqi WMD was overestimated, the threat from Lybia’s was underestimated. Both, however, were ended.)

  The best alternative target to Iraq would have been Pakistan (as Obama has rightly noted), but Pakistan is a much larger, more unified, militarily stronger and geographically more challenging country which was under the control of an astute military dictator-lite who was potentially (and turned out to be) a valuable ally. Musharraf has also proven to be a dictator more in the Pinochet style than the Saddam or Castro style - not a nice man or above some very serious abuses, but willing to eventually step down in an orderly fashion and uphold the rule of law for power transitions.

  This is very much simplified and probably over-simplified. If you are actually interested in understanding the answer to your question, I recall a speech Bush gave in London in 2002 or 2003 that laid it out pretty clearly and could probably locate it for you. I also recall a couple of essays in the Stanford University Hoover Institution’s Policy Review, one I think by Robert Kauffman and another possibly by Jeanne Kirkpatrick, that explicated the strategy very well. I could dig those out. Or you could read the 2005 “National Strategy for Victory in Iraq” on the White House web site with an open and inquiring mind.

  Not being a military strategist myself or even all that well read in military history, I don’t know whether Bush’s strategy is the best one that could have been developed after 9/11 to cope with the terrorist threat. I do know I have never read a critique of the strategy that squarely addressed what it was, instead of setting up a ’straw-man’ to beat down, and I have never heard an alternative strategy that made any sense at all. So by default, I continue to support it despite what, in hindsight, are some serious mistakes in its execution.

  Whether the stategy will prove sound will probably not be known for at least two decades, and will also depend on what happens between now and then. And even if it is reasonably successful, it will not result in a peaceful world, any more than the disintegration of the Soviet Union brought a utopia forth in Russia or its former colonies.

  Human conflict is perennial and even wise and well-intentioned human responses to it will always be flawed. They can make things better or worse, or sometimes worse in the short-run and better in the long-run or vice-versa, but never perfect.

  The idea that going after Osama Bin Ladin should be the end goal of our national security strategy makes no sense to me. Osama Bin Ladin is one man in a long string of men, going back to the 1930s, who have advanced a particular view of political Islam and its relations to the West. When he dies, if he is not already dead, there will be plenty to take his place, because he is a leader of an ideology, not of a personality cult.

  I was in college in the late 1960s. Anti-American sentiment back then was very strong in many parts of the world, including most of South and Central America, much of Asia, all of Africa, much of Europe, and all of the Middle East.

  Anti-American sentiment has always been strong in the Arab Middle East, but not so strong that millions from the region have not immigrated here.

  I’ve traveled abroad quite a bit, including in Central America in the 1960s when violent anti-American demonstrations were taking place, and Europe during Bush’s terms, and in my experience, “anti-American” sentiment is barely skin deep if that, and what there is is often based on demagogy or total ignorance about our society. I’ve had many political discussions with Spaniards, Italians, Russians, Germans, Eastern Europeans, French, Moroccans, Iranians, Kosovars, Dutch, Turks, and I can’t recall a single conversation where something like “Don’t get me wrong, I love America!” doesn’t come into the conversation somewhere. If anything, it is that love of and confidence in America that most of the world shares that makes it so intolerant of our perceived imperfections, even in the face of far greater ones in their own home countries.

  There’s far more real “anti-American” sentiment at the average American college faculty club than there is in the average market place or train station in almost any other country.

• 40 fengshui // Nov 24, 2008 at 9:59 pm

  Setting reasonable regulations such as not allowing comsumers to borrow for a mortgage when they have a 60% income debt ratio. That is evil? It appears that if we do not set at least some guidelines/ regulations for CERTAIN lending practices such as mortgage lending, that will prohibit people from borrowing to buy homes that they cannot afford, and then hopefully tax payers won’t have to bail out irresponsible lenders as well as homeowners, etc, etc. Lack of regulations, poor decisions by congress in general such as suggesting that we lower our standards of approving mortage applications- but then not setting clear and concise underwriting guidelines, among many other things, is how we got into this mess in the first place. And now taxpayers are funding a multibillion dollar bailout. Basically, people are going to sit and point fingers, and nothing changes. I realize that this is a very complex issue and there is not a simple solution. But to think that this will never happen again is just ignorant.

  I never once said that I believe that it is the government’s RESPONSIBILITY to “take care” of everyone’s needs. That wouldn’t be realistic, it isn’t healthy, nor do we have the financial resources to do so.

  And for the record, I’m not sure what your point is about mentioning Orwell. I believe that you either misinterpreted what I said, or you’re twisting my point to fit your own agenda. Suggesting implementation of minimal lending practices is not in anyway suggesting that our coutry transform into a dictatorship instead of a democracy. There are PLENTY of redundant/ common sense laws to “protect” us from ourselves such as seatbelt use while driving, wearing motorcycle helmets, bike helmets, etc etc and we don’t deem local government officials who inact laws such as those as being “dictators”, do we? So what if we try to prevent another economic crisis? I would certainly rather go to a bank and apply for a loan and be told NO, then to take out a loan that I couldn’t afford, and obviously many people are NOT good judges of what they can actually afford.

  And, the Hitler comment, well, I’m not even going to open that can of worms. To suggest that my thinking parallels that of a individual who was responsible for mass murder/ genocide, well…. that is just bizarre and wrong, to put it politely.

• 41 Pearl // Nov 25, 2008 at 4:07 pm

  Fengshui, I seem not to be able to express my points to you clearly, for which I apologize.

  I do not suggest that your thinking parallels that of Hitler; your philosophy is not that of a dictator but that of one of his subjects. What I suggest is that your thinking parallels that of the millions of people (Germans during the 1930s, for example), who have accepted the idea that a strong and massively intrusive government is necessary to “protect people against themselves.”

  Although I have always worn my seatbelt, including long before it became a law, I oppose mandatory seatbelt laws, mandatory helmet laws, etc., except for children or wards of the state. I DO deem the public officials who enact these laws to be dictators, albeit petty ones.

  Laws should not be about keeping competent adults from doing stupid things to themselves. However, once we accept that the government or “society” will be picking up the tab for those stupid decisions, it gets much easier to justify controlling and micromanaging people’s lives.

  This is one of the main reasons I object to the government picking up the tab: Because “he who pays the piper calls the tune.” Once the government pays for our health care, why should the government not control what we eat, how many hours we sleep, whether and how we exercise, etc.?

  England is considering a ban on “Happy Hour” because alcoholism deaths are rising, apparently not understanding that alcoholism is largely a disease of those who have abandoned responsibility for their own lives, something England has been enabling for almost a century. Perhaps you have no problem with the government stepping in to tell businesses that they can’t offer discounted prices to their customers.

  Look how easily you accept the idea that it is OK for the government to insist you wear a seatbelt “for your own good.” You will probably also easily accept the idea that foods or other products that are “bad for us” should be prohibitively taxed, that in my own office, I can’t allow my stressed-out clients to smoke if I choose to, etc.

  Fengshui, believe it or not, self-respecting adults DO NOT accept that as OK; we may obey, because the government has a bigger army, but yes, we do see that as dictatorial.

  As for whether incurring debt at the 60% ratio should be prohibited, consider this: I bought my first house at over that ratio when I was in college, rented out rooms, lived at zero housing cost for 12 years, paid it off within 8 years, and sold it for 4.5 times what I paid for it. When I started my business, my debt/income ratio was over 80%. During my father’s long business career, his debt/income ratio was sometimes as high as 6/1. He never went broke. Are you really so much smarter than he was, or than I am, that some politician you choose should “protect” us from ourselves?

  I deny that a bunch of government bureaucrats are smarter than I am about what is good for me. I even deny they are smarter than you about what is good for you.

  I especially deny that if we are too stupid to run our own lives (as you assume most of us are) we are likely to elect politicians smart enough to do it for us. How likely is that?

  Maybe instead of declaring everybody an adult at age 18, we should have to pass a test of basic intelligence and basic skills (reading, arithmetic). Those who pass get a card that declares them adults. They can vote, make contracts, marry, do all the things adults do, and take their lumps when they screw up - food stamps to keep them from starving, sure, but no bailouts on keeping their overleveraged houses or businesses.

  Those who don’t pass can retake the test once a year, but until they do pass, they can’t vote, get a credit card, borrow money, finance anything, take out a mortgage, etc. The only alternative ways to be credentialed as an adult could be: 1) buy it with your own earned money at a steep price; or 2) live like an adult for at least 5 years, earning your own keep and accruing some reasonable savings.

  Then people who want to meddle into other people’s lives would have a population of sub-adults to mess around with, but the rest of us can preserve our human dignity and live like free people, as the nation’s founders intended.

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