Peak United States

How do we know if we’re in decline? What are signs of slippage? Do mirrors help? What about comparisons to other people and places?

What psychological barriers prevent us from acknowledging our decline?

Why, despite being very well educated and very comfortable with numbers, do I not understand our tax system well enough to prepare my family’s taxes? Why do I have to pay an expert to prepare them?

Why are there 1,000+ deductions? Why is Congress so susceptible to accounting firms’ lobbyists? And realtors’ lobbyists? Why hasn’t there been meaningful tax reform since 1986? Why does our tax accounting system benefit members of Congress more than their constituents? Why do well-to-do, stock owning citizens, pay less in taxes than others? Why do most other developed countries have far more simple, fair, and efficient tax systems? Why aren’t more people agitating for answers to that question? Why have citizens allowed their representatives to defend the status quo for 30+ years?

Why, despite being very well educated and very comfortable with numbers, do I not understand my health insurance? Why am I told what my doctor visit, biopsies, surgical consultation, and minor surgeries all cost a few weeks afterwards? What if restaurants didn’t have menus, but instead, just told you what you owed after you ate? Why are there initial charges and secondary “what insurance allows” charges? Why does Kaiser-Permanente make me go to a “surgery consultation” when the surgeon said it was unnecessary, “but Seattle won’t let us do our own scheduling”? Why was I charged $206 for the unnecessary 20 minute “consultation”?

Why is Congress so beholden to medical insurance lobbyists? Why do many other developed countries have far more simple, comprehensive, and efficient health insurance systems? Why are so many citizens resigned to health insurance pricing and paperwork lunacy? Why do citizens continue to elect representatives who preserve the medical insurance status quo?

How does anyone of sound mind claim that the U.S. is “the greatest country on God’s green earth” when our tax and health insurance systems are fucked up way beyond our compromised legislative body’s ability to fix them?

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Blasts From the Past

You’ve probably often wondered, exactly what kind of water polo player was Ron? If I’m gonna continue reading his blog, it would sure be nice to know.

Five goals against Western High in a Sophomore game. Probably shoulda played in the 1980 Olympics. Still upset at Carter for the boycott. A legend in my own mind. This Cypress High School 1980 pic is everything you need to know. Total baller.

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Nevermind that I was built like a pool cue. Major hops! In polo one’s manhood was determined by how high he could get out of the water. Waist high was big time, seeing suit, the equivalent of dunking a bball. Kneecaps, making change for a dollar off the top of the backboard.

Okay, I guess enough time has passed. It’s time to come clean. I had some underwater assistance. You can do it too. Here’s how. Find Steve Wright and ask him to crouch down in about 5-6′ of water. Then ask Kevin Babb to stand on the deck and take the pic right after Steve explodes off the bottom with you standing on his shoulders. Like in life more generally, timing is everything. Pre-Photoshop genius.

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[Steve, Kevin, Legend]

Thanks to Operation Declutter, here’s another one from the archives.

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In 1993 The Good Wife and I were moving from Denver, CO to G’boro, NC. I must have asked my dad a moving/tax question. In response, he went full memo. LOVE the cursive Dad. Had he not included that, I most certainly would’ve questioned the memo’s authenticity.

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One last one. A “gift” my from my loving brother when PressingPause was getting going. His idea of encouragement. It came to mind this week because I mistakenly used the phrase “school funding” in a blog post title. Sporadically checking my stats, I felt like the Seahawks at the end of the first half. And now me in a speedo probably means an even more precipitous drop in readership.

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Sentence to Ponder

From an article on Jeb Bush’s taxes in today’s WSJ.

“The average rate for middle-income households was projected to be 12% in 2013, the latest available data.”

The top 1% of earners, who do 99% of the complaining about tax rates, pays an average of 33%.

What percentage of people in developed countries would sign on to pay 12%? Trick question. Somewhat less than all because some (many?) would not want to accept the trade-offs of minimal taxes including worsening infrastructure, expensive health care, and tens of million in poverty.

What the Affordable Care Act Gets Wrong

Poor form to be contrarian following a week liberals can’t stop celebrating, but count your blessings I’m done writing about golf. For now at least. I always reserve my right to tap my inner Alan Shipnuck.

Thursday night near the end of another spirited training ride. Soft spinning on North Street, two friends and I head for home. One is a well-to-do 59 year old who just retired. His very nice lake home is paid for and he and his wife just returned from another trip to Europe. Euro vacations aside, as his threadbare cycling gloves illustrate, he’s actually on the frugal side. He says he can afford the vacations because of the gloves. Decades of having made very good money no doubt help too.

“You’ll never guess what medical plan I’ve signed up for,” he says. “No clue,” I replied. “Medicaid!” “Wait, you’re 65?!” “No, I’m 59, that’s Medicare. I was surprised to learn I qualify for Medicaid because I have no income now.”

Quick google search. Medicaid is “a U.S. government program, financed by federal, state, and local funds, of hospitalization and medical insurance for persons of all ages within certain income limits.”

I was stunned. He told me a person can make about $20k/year and still qualify for Medicaid. He hardly has any capital gains because he hasn’t sold any assets for a long time. Apart from his international vacations, I’m guessing his expenses are minimal and he’s living off of savings that he previously set aside. I’m not sure how he’s sheltered his wife’s income.

Then he tells me the adult son of a mutual cycling friend is also getting “free” Medicaid despite the fact that he has a very large trust fund that must consist of tax-free municipal bonds.

Undoubtedly, if my friends are doing this, so are other high wealth/low income people. Especially those whose income stems largely from tax-free municipal bonds. Why isn’t anyone writing about this gigantic loophole and what we should do to close it?

More generally, why does the Affordable Care Act (ACA) use income as it’s sole reference point instead of some combination of income and wealth? The same can be asked about the IRS and college financial aid offices. When it comes to health care premiums, college financial aid, and taxes more generally, it’s far better to be wealthy than to have lots of income. Just ask Mitt Romney. My guess is, and I’d love a more tax savvy reader to enlighten us on this, IRS agents, ACA bureaucrats, and college financial aid officials are unable to determine people’s total wealth with any certainty.

Why not ballpark it though I wonder. If the government knew my friend owned his home outright, would it compromise his Second Amendment rights to privacy? How do we balance well-to-do people’s right to privacy with public policies that, through subsidies, take from those of modest wealth and give to those with considerably more?

Frugality’s Point of Diminishing Returns

Frugal people like me sometimes take bargain hunting too far. We need to be smarter about frugality’s point of diminishing returns.

Writing in the New York Times, Henry Petroski states the obvious—U.S. airports, harbors and highway systems are often poorly designed, built, maintained, and funded.

He adds:

. . . infrastructure can also refer to things on a much smaller scale, like private homes . . . . Thinking about the construction, aging and care of this domestic infrastructure can provide insight into how we as a nation might better respond to our mounting public works problems.

Our 60-year-old home is an example of how infrastructure can be built to stand strong, age gracefully and be almost maintenance-free. The foundation sits firmly on solid granite. From the full basement you can see how the exposed beams, joists and underside of the flooring were made of good wood, built to last.

When I see a commercial building under construction today, I see nothing like this in the materials and workmanship, perhaps because it is simply a function of finance, expected to survive only until it is fully amortized in a company’s budget.

I can see the same decline in quality when I try to do work on our house. When it was built, two-by-fours were actually only an eighth of an inch short of those nominal dimensions. Today, a two-by-four is a full half-inch shy. This sort of thing frustrates carpenters and do-it-yourselfers alike, making old construction more difficult to fix and encouraging tearing down and starting over with inferior newer materials and less skilled labor. What a waste of time, effort and money — and, more important, superior infrastructure.

Why the marked decline in the quality of home building? Petroski argues it’s because “expert craftsmen—carpenters, roofers, painters—who work with precision and pride, are increasingly being pushed out by cheaper labor with inferior skills.”

And then adds:

This is not the fault of homeowners, but of the industries whose practices favor the use of inferior products and labor that drive modern construction: the developers, lenders, builders and realtors who, to make quick money, have created a stock of domestic and commercial infrastructure that is a waste of resources and will not last.

One commenter vehemently disagreed:

“‘This is not the fault of homeowners’. Wrong wrong wrong! I work for homeowners remodeling their homes in San Francisco and environs, and their relentless pursuit of the lowest cost is costing them dearly in the long run. Many do not want to hear that I am licensed, insured & bonded; that I have only full-time long-term employees on whom I pay all required taxes and insurances, and who are respected with medical & retirement benefits; that I pay to have my hazardous waste disposed of legally (rather than pouring it down the toilet); that their toddlers will be in college before they will need my services again; in fact that their toddlers will not be intellectually impaired by improper disturbance of lead-based paint. No, many prefer the fantasy that Yelp is wise, that the China price is obtainable, that my price is merely my opening bid. We here have just built a multi-billion dollar bridge that took a quarter-century, went to the lowest bidder who subbed out major components to China, which is already showing alarming signs of premature senility, and which may not even meet it most elementary function of surviving the next Big One. Some bargain! No, we homeowners, we taxpayers, you & I, us cheapskates, we are at fault.”

In this blame game debate I side with San Francisco. My relentless pursuit of the lowest costs helps create the razor thin profit margins that give rise to all kinds of corner cutting. Us cheapskates are at fault.

This is true with respect to home building and our national infrastructure. Petroski returns to our faltering infrastructure:

We have seen short-term fixes and shoddy workmanship at home, and we see our bridges and roads the same way.

. . . we do not have to be homeowners or highway engineers to know that good materials are better than poor and a job done well from the outset will outlast one done shabbily.

As we debate how to pay for infrastructure, we should also have a discussion about raising expectations for what we’re buying. Homeowners, project managers and legislatures alike must call to account suppliers and contractors who do not produce the quality of materials and work they promise.

Again, Petroski places the blame on “suppliers and contractors” and is silent about my tendency to do everything possible to reduce my tax liability.

Meanwhile, some fellow citizens shout that they are “Taxed enough already!” and mindlessly argue that “the government is so wasteful and incompetent, it must be starved.” Any notion of public goods is lost on them. As is the quality of life of our children’s children.

My politics are different than theirs, but I’m susceptible to the same mindless, short-sighted frugality. Until I adopt a more nuanced, enlightened form of frugality, I’m partly to blame for our deteriorating homes, airports, highways, and harbors.

The U.S. Electoral College Map Explained

Take a gander.

Since you always aced your social studies courses you already know the President needs 270 electoral votes out of the 538 up for grabs. The winner can lose darn near forty small states, win the most heavily populated ten plus, and be the first to tag the bible on January 20, 2013.

Show the above map to grade schoolers and ask who is likely to win. They’ll say the Red Team.

Even though you understand how the Electoral College works, you probably don’t know why some states tip blue and others red. That’s what I’m here for.

It all starts with cool ocean breezes in the Pacific, upper Atlantic, and Great Lakes region. Those cool breezes translate into more moderate temperatures especially on the West Coast and in the upper Northeast. In contrast, the great, red, middle swath of the country is mired in hot and humid summers and killer cold winters almost all the time. Ocean and Great Lake breezes and cool temps contribute to blood flow, heightened brain activity, and altogether clearer thinking. Sadly, over time, people living in the great, red, middle swath of the country develop cognitive deficits as a result of oppressive heat and humidity and dramatic temperature swings. The technical term for this is Climatic Induced Cognitive Deficit Disorder or CICDD.

Also, until the last presidential election, very few people knew that on clear days you can actually see Russia from the West Coast of the U.S. That proximity to Russia—coupled with shared suffering during earthquakes, mud slides, and forest fires—explains the more collectivist mindset of Left Coasters.

Then there’s dietary considerations. Reds don’t just like their heat, humidity, and bugs, they like breaded and fried meat casserole-based potlucks more specifically. All washed down with whole milk. Blues prefer roasted vegetables, fresh fruit, and wine. That explains the dramatic physical health divide, which like the climatological differences, translates into a mental health chasm. Eat well, be well, think well.

Then there’s preferred outdoor activities. This time of year Blues hike among trees and meditate silently upon their changing colors all while looking forward to snow shoeing and cross country skiing. Reds hike among trees too, in search of large defenseless animals to shoot and kill. Then they drag them home, bread them, and fry them. All while looking forward to firing up their snowmobiles and making lots of noise and pollution. Blue outdoor activities lead to enlightenment. Red to blight and lunacy.

Then there’s different artistic sensibilities. Blues prefer classical music, independent and foreign films, modern dance, national public radio, and The New Yorker. Reds, country and heavy metal, Arnold Schwarzenegger films, reality television, Fox News, and The Washington Times. Heightened enlightenment and even greater lunacy.

Class dismissed.

How About a Vehicle Mileage Tax?

To deal with population growth, traffic density, and global warming.

From Slate Magazine.

Looking for a way to raise money for roads and public transit, San Francisco Bay Area transportation officials have decided to look into a novel idea: Taxing drivers for every mile they drive. The hypothetical tax—which at this point is only being studied as part of a long-range plan—could run from as little as a penny to as much as a dime per mile, perhaps depending on the time of day, according to the Associated Press.

The VMT (vehicle miles traveled) tax, the thinking goes, would not only bring in new revenue but encourage people to drive less. The San Jose Mercury News reports that small pilot tests of a VMT tax in cities in Oregon and Washington have shown “encouraging” results, with drivers reducing their total mileage to save money.

Sure, but how does the government propose to keep track of the number of miles that every driver drives? Under the idea being studied by the San Francisco-area Metropolitan Transportation Commission, the Mercury News’ Mike Rosenberg explains, “Drivers would likely have to install GPS-like trackers on their cars to tally travel in the nine-county Bay Area, from freeways to neighborhood streets, with only low-income people exempted.”

Oh but don’t worry, the government would never dream of using these tracking devices for anything except tallying the total number of miles you drive. “The last thing we’re interested in is where you go and what you do,” a commission spokesman told the AP.

Here’s how a free-market, true believer, business friend of mine responded to the idea in an email:

Now there is a great plan – lets get people to drive less so more businesses can fail.  Oh, if more businesses fail that mean less tax collections, and therefore leads to higher unemployment.  But wait, we can raise taxes on the successful companies and the people who buy from them can be taxed higher also….I am sure the idiot who proposed this plan, failed Econ 101.  Government can not collect more from a soft economy without slowing it down further.

That same friend often tells me I don’t know shit about business, but even as clueless as I am, I can’t help but wonder why the correlation between miles driven and economic growth is so obvious in his thinking. The pilot studies show people actually save money as a result of driving less. And can’t we presume they spend most of their savings? Albeit at places like Amazon.com. And would the miles driven/economic growth correlation, whatever it might be right now, weaken if urban planners designed more walkable and bicycling friendly neighborhoods, if people began carpooling, or taking public transportation, and/or cycling, and if people purchased even more of what the need and want on-line?