The Rapture Index Hits 155 December 30, 2004January 19, 2017 But first . . . GIFT RECEIPTS Gary Diehl: ‘My son works for a large retail chain that just loves to issue ‘gift receipts’ with every purchase. Since they do not have the price on them you can give them along with the gift. This limits the chances of the receiver finding out exactly what you spent if an exchange is required. How sweet. The bad news is, if the price has dropped since they purchased the gift (not uncommon on some items), the store only credits you the new lower price. After all, you don’t know what they originally paid. I suggest giving the actual receipt in a sealed envelope. Gift receipts are basically a scam disguised as a service.’ And now . . . RAPTURE Tuesday, I reprinted most of Bill Moyers’ recent speech, which touched upon, among other things, the Rapture Index. In this past election several million good and decent citizens went to the polls believing in the rapture index. That’s right – the rapture index. ‘Google it,’ Moyers advised, ‘and you will find that the best-selling books in America today are the twelve volumes of the left-behind series written by the Christian fundamentalist and religious right warrior, Timothy LaHaye. These true believers subscribe to a fantastical theology concocted in the 19th century by a couple of immigrant preachers who took disparate passages from the Bible and wove them into a narrative that has captivated the imagination of millions of Americans.’ Its outline is rather simple, if bizarre . . . : once Israel has occupied the rest of its ‘biblical lands,’ legions of the anti-Christ will attack it, triggering a final showdown in the valley of Armageddon. As the Jews who have not been converted are burned, the messiah will return for the rapture. True believers will be lifted out of their clothes and transported to heaven, where, seated next to the right hand of God, they will watch their political and religious opponents suffer plagues of boils, sores, locusts, and frogs during the several years of tribulation that follow. Believers are actually encouraged by war, famine and the like, because it increases the likelihood that the rapture is close at hand. When Moyers gave his speech, the Rapture Index stood at 144. To put that into context: Rapture Index of 85 or lower: Slow prophetic activity Rapture Index of 85 to 110: Moderate prophetic activity Rapture Index of 110 to 145: Heavy prophetic activity Rapture Index above 145: Fasten your seat belts Three weeks later, by December 20, it had climbed to 153 – miles ahead of the record low 57 registered December 12, 1993, and not far off its all-time high of 182 reached September 24, 2001. And that 153 reading was before the catastrophic earthquake and tsunami. Earthquakes are #37 on the list of 45 categories that go into calculating the rapture index. To wit: 37. Earthquakes (Mark 13:8) God used earthquakes to show his disapproval with man. . . . look for more earthquake activity as the return of Christ draws near. On Monday, with the dimensions of the disaster just beginning to be known, the index was bumped up to 155. My guess is that as the horrifying proportions of the tragedy sink in, the next revision of the index might take it even higher. But maybe not: both earthquakes and floods are already at ‘5,’ which seems to be as high as any of the 45 individual components of the Index go. All this is laid out clearly here. As is this simple explanation of the Index: The Rapture Index has two functions: one is to factor together a number of related end time components into a cohesive indicator, and the other is to standardize those components to eliminate the wide variance that currently exists with prophecy reporting. The Rapture Index is by no means meant to predict the rapture, however, the index is designed to measure the type of activity that could act as a precursor to the rapture. You could say the Rapture index is a Dow Jones Industrial Average of end time activity, but I think it would be better if you viewed it as prophetic speedometer. The higher the number, the faster we’re moving towards the occurrence of pre-tribulation rapture. The site‘s wide-ranging and congenial Frequently Asked Questions include: Did Adam and Eve have a navel? There is no way to verify if they actually had one or not, but I believe the most likely answer is no. A belly button is an indication that you were once attached to your mother. Because Adam was molded from spit and clay and Eve from Adam’s rib, there would be no need for them to have features that only result from natural childbirth. Are angels real? Angels are absolutely real . . . All of this may sound a little silly to some of you. But if it sounds inconsequential, I would strongly urge you to go back and read Bill Moyers’ speech. Happy New Year. May it be anything short of rapturous.
Bearish Buffett December 29, 2004February 28, 2017 HOW MASTERCARD CAME TO OWN 90% OF NEW ENGLAND Still silly but fun. (Sorry for the bad link Monday.) CONTINUING THE CHRISTMAS SPIRIT From washingtonpost.com: Change Means Fewer Students Will Be Eligible for Pell Grants By Dan Morgan The Department of Education yesterday announced a new formula for calculating eligibility for college financial aid, a move that will eliminate federal Pell Grant scholarships for an estimated 80,000 to 90,000 low-income students and force a modest scaling back of other types of state and federal assistance to broader categories of undergraduates. . . . [E]ducation officials indicated yesterday that they were taken aback by the timing of the announcement, just two days before Christmas. ☞ At least we’re not rolling back any tax cuts for people at the top. Some things are sacrosanct, and protecting the rich from having to share in any sacrifice is one of them. BEARISH BUFFETT Jay Rao: ‘I follow you column on a regular basis. I am also a shareholder of Berkshire Hathaway. Looks like your negative outlook on US economy is shared by Warren Buffett, based on his short position on US Dollar. I want to bring your readers’ attention to the following article, where he seems to think we are headed for a huge economic downturn.’ BUYING ON SALE – WITH 10% OFF Gary Diehl: ‘This site allows you to buy gift cards from virtually every retailer in America. Most cards are discounted about 10% below cash value, however some are 15%, 20% or more.’ ☞ Not sure it’s worth your time, but it’s also a place to sell unwanted gift certificates. Tomorrow: The Rapture Index
A Word About Our Planet December 28, 2004February 28, 2017 Bill Moyers – who just retired after 33 years in Public Broadcasting – received an award this month from Harvard Medical School’s Center for Health and the Global Environment. His acceptance speech (emphasis added): On Receiving Harvard Medical School’s Global Environment Citizen Award by Bill Moyers . . . The journalist who truly deserves this award is my friend, Bill McKibben. . . . His bestseller The End of Nature carried on where Rachel Carson’s Silent Spring left off. Writing in Mother Jones recently, Bill described how the problems we journalists routinely cover – conventional, manageable programs like budget shortfalls and pollution – may be about to convert to chaotic, unpredictable, unmanageable situations. The most unmanageable of all, he writes, could be the accelerating deterioration of the environment, creating perils with huge momentum like the greenhouse effect that is causing the melt of the arctic to release so much freshwater into the North Atlantic that even the Pentagon is growing alarmed that a weakening gulf stream could yield abrupt and overwhelming changes, the kind of changes that could radically alter civilizations. That’s one challenge we journalists face – how to tell such a story without coming across as Cassandras, without turning off the people we most want to understand what’s happening, who must act on what they read and hear. As difficult as it is, however, for journalists to fashion a readable narrative for complex issues without depressing our readers and viewers, there is an even harder challenge – to pierce the ideology that governs official policy today. One of the biggest changes in politics in my lifetime is that the delusional is no longer marginal. It has come in from the fringe, to sit in the seat of power in the Oval office and in Congress. For the first time in our history, ideology and theology hold a monopoly of power in Washington. Theology asserts propositions that cannot be proven true; ideologues hold stoutly to a world view despite being contradicted by what is generally accepted as reality. When ideology and theology couple, their offspring are not always bad but they are always blind. And there is the danger: voters and politicians alike, oblivious to the facts. Remember James Watt, President Reagan’s first Secretary of the Interior? My favorite online environmental journal, the ever engaging Grist, reminded us recently of how James Watt told the U.S. Congress that protecting natural resources was unimportant in light of the imminent return of Jesus Christ. In public testimony he said, ‘after the last tree is felled, Christ will come back.’ Beltway elites snickered. The press corps didn’t know what he was talking about. But James Watt was serious. So were his compatriots out across the country. They are the people who believe the Bible is literally true – one-third of the American electorate, if a recent Gallup poll is accurate. In this past election several million good and decent citizens went to the polls believing in the rapture index. That’s right – the rapture index. Google it and you will find that the best-selling books in America today are the twelve volumes of the left-behind series written by the Christian fundamentalist and religious right warrior, Timothy LaHaye. These true believers subscribe to a fantastical theology concocted in the 19th century by a couple of immigrant preachers who took disparate passages from the Bible and wove them into a narrative that has captivated the imagination of millions of Americans. Its outline is rather simple, if bizarre (the British writer George Monbiot recently did a brilliant dissection of it and I am indebted to him for adding to my own understanding): once Israel has occupied the rest of its ‘biblical lands,’ legions of the anti-Christ will attack it, triggering a final showdown in the valley of Armageddon. As the Jews who have not been converted are burned, the messiah will return for the rapture. True believers will be lifted out of their clothes and transported to heaven, where, seated next to the right hand of God, they will watch their political and religious opponents suffer plagues of boils, sores, locusts, and frogs during the several years of tribulation that follow. I’m not making this up. Like Monbiot, I’ve read the literature. I’ve reported on these people, following some of them from Texas to the West Bank. They are sincere, serious, and polite as they tell you they feel called to help bring the rapture on as fulfillment of biblical prophecy. That’s why they have declared solidarity with Israel and the Jewish settlements and backed up their support with money and volunteers. It’s why the invasion of Iraq for them was a warm-up act, predicted in the Book of Revelation where four angels ‘which are bound in the great river Euphrates will be released to slay the third part of man.’ A war with Islam in the Middle East is not something to be feared but welcomed – an essential conflagration on the road to redemption. The last time I Googled it, the rapture index stood at 144-just one point below the critical threshold when the whole thing will blow, the son of God will return, the righteous will enter heaven, and sinners will be condemned to eternal hellfire. So what does this mean for public policy and the environment? Go to Grist to read a remarkable work of reporting by the journalist, Glenn Scherer – ‘the road to environmental apocalypse. Read it and you will see how millions of Christian fundamentalists may believe that environmental destruction is not only to be disregarded but actually welcomed – even hastened – as a sign of the coming apocalypse. As Grist makes clear, we’re not talking about a handful of fringe lawmakers who hold or are beholden to these beliefs. Nearly half the U.S. Congress before the recent election – 231 legislators in total – more since the election – are backed by the religious right. Forty-five senators and 186 members of the 108th congress earned 80 to 100 percent approval ratings from the three most influential Christian right advocacy groups. They include Senate Majority Leader Bill Frist, Assistant Majority Leader Mitch McConnell, Conference Chair Rick Santorum of Pennsylvania, Policy Chair Jon Kyl of Arizona, House Speaker Dennis Hastert, and Majority Whip Roy Blunt. The only Democrat to score 100 percent with the Christian coalition was Senator Zell Miller of Georgia, who recently quoted from the biblical book of Amos on the senate floor: “the days will come, sayeth the Lord God, that I will send a famine in the land.’ He seemed to be relishing the thought. And why not? There’s a constituency for it. A 2002 TIME/CNN poll found that 59 percent of Americans believe that the prophecies found in the Book of Revelation are going to come true. Nearly one-quarter think the Bible predicted the 9/11 attacks. Drive across the country with your radio tuned to the more than 1,600 Christian radio stations or in the motel turn some of the 250 Christian TV stations and you can hear some of this end-time gospel. And you will come to understand why people under the spell of such potent prophecies cannot be expected, as Grist puts it, “to worry about the environment. Why care about the earth when the droughts, floods, famine and pestilence brought by ecological collapse are signs of the apocalypse foretold in the Bible? Why care about global climate change when you and yours will be rescued in the rapture? And why care about converting from oil to solar when the same God who performed the miracle of the loaves and fishes can whip up a few billion barrels of light crude with a word?” Because these people believe that until Christ does return, the lord will provide. One of their texts is a high school history book, America’s Providential History. You’ll find there these words: “the secular or socialist has a limited resource mentality and views the world as a pie…that needs to be cut up so everyone can get a piece.’ however, “[t]he Christian knows that the potential in God is unlimited and that there is no shortage of resources in God’s earth……while many secularists view the world as overpopulated, Christians know that God has made the earth sufficiently large with plenty of resources to accommodate all of the people.” No wonder Karl Rove goes around the White House whistling that militant hymn, “Onward Christian Soldiers.” He turned out millions of the foot soldiers on November 2, including many who have made the apocalypse a powerful driving force in modern American politics. I can see in the look on your faces just how hard it is for the journalist to report a story like this with any credibility. So let me put it on a personal level. I myself don’t know how to be in this world without expecting a confident future and getting up every morning to do what I can to bring it about. So I have always been an optimist. Now, however, I think of my friend on Wall Street whom I once asked: “What do you think of the market?” “I’m optimistic,” he answered. “Then why do you look so worried?” And he answered: “Because I am not sure my optimism is justified.” I’m not, either. Once upon a time I agreed with Eric Chivian and the Center for Health and the Global Environment that people will protect the natural environment when they realize its importance to their health and to the health and lives of their children. Now I am not so sure. It’s not that I don’t want to believe that – it’s just that I read the news and connect the dots: I read that the administrator of the U.S. Environmental Protection Agency has declared the election a mandate for President Bush on the environment. This for an administration that wants to rewrite the Clean Air Act, the Clean Water Act and the Endangered Species Act protecting rare plant and animal species and their habitats, as well as the National Environmental Policy Act that requires the government to judge beforehand if actions might damage natural resources. That wants to relax pollution limits for ozone; eliminate vehicle tailpipe inspections; and ease pollution standards for cars, sports utility vehicles and diesel-powered big trucks and heavy equipment. That wants a new international audit law to allow corporations to keep certain information about environmental problems secret from the public. That wants to drop all its new-source review suits against polluting coal-fired power plans and weaken consent decrees reached earlier with coal companies. That wants to open the arctic wildlife refuge to drilling and increase drilling in Padre Island National Seashore, the longest stretch of undeveloped barrier island in the world and the last great coastal wild land in America. I read the news just this week and learned how the Environmental Protection Agency had planned to spend nine million dollars – $2 million of it from the administration’s friends at the American Chemistry Council – to pay poor families to continue to use pesticides in their homes. These pesticides have been linked to neurological damage in children, but instead of ordering an end to their use, the government and the industry were going to offer the families $970 each, as well as a camcorder and children’s clothing, to serve as guinea pigs for the study. I read all this in the news. I read the news just last night and learned that the administration’s friends at the international policy network, which is supported by ExxonMobil and others of like mind, have issued a new report that climate change is ‘a myth’, sea levels are not rising, scientists who believe catastrophe is possible are ‘an embarrassment. I not only read the news but the fine print of the recent appropriations bill passed by Congress, with the obscure (and obscene) riders attached to it: a clause removing all endangered species protections from pesticides; language prohibiting judicial review for a forest in Oregon; a waiver of environmental review for grazing permits on public lands; a rider pressed by developers to weaken protection for crucial habitats in California. I read all this and look up at the pictures on my desk, next to the computer – pictures of my grandchildren: Henry, age 12; of Thomas, age 10; of Nancy, 7; Jassie, 3; Sara Jane, nine months. I see the future looking back at me from those photographs and I say, ‘Father, forgive us, for we know not what we do.’ And then I am stopped short by the thought: ‘That’s not right. We do know what we are doing. We are stealing their future. Betraying their trust. Despoiling their world.’ And I ask myself: Why? Is it because we don’t care? Because we are greedy? Because we have lost our capacity for outrage, our ability to sustain indignation at injustice? What has happened to out moral imagination? On the heath Lear asks Gloucester: ‘How do you see the world?” And Gloucester, who is blind, answers: “I see it feelingly.'” I see it feelingly. The news is not good these days. I can tell you, though, that as a journalist, I know the news is never the end of the story. The news can be the truth that sets us free – not only to feel but to fight for the future we want. And the will to fight is the antidote to despair, the cure for cynicism, and the answer to those faces looking back at me from those photographs on my desk. What we need to match the science of human health is what the ancient Israelites called ‘hocma’ – the science of the heart…..the capacity to see….to feel….and then to act…as if the future depended on you. Believe me, it does.
A Trillion Here and a Trillion There December 27, 2004January 19, 2017 Tomorrow, a really important speech you may have missed. But today: HOW MASTERCARD CAME TO OWN 90% OF NEW ENGLAND Silly but fun. FIXING SOCIAL SECURITY Randy Vanderbeek: ‘If you think that the Modern Portfolio Theory (for which Harry Markowitz won a Nobel Prize) is reasonable, then a mixture of investment classes could be compiled that would (theoretically) LESSEN risk as compared to US Treasuries alone yet give higher returns. Finding some honest experts to put this together, and keeping greedy brokerage firms out of it would be a challenge, but it’s something to consider.’ ☞ Good points. But what about the trillion or two in additional debt we’d incur continuing current retirees’ full benefits while siphoning off funds to these new private accounts? A trillion here and a trillion there and pretty soon you’re talking real money. And what about the ‘free lunch’ issue I raised here last week? The problem is that we, as Social Security taxpayers, not only own a big chunk of the Treasury bonds that represent the National Debt . . . we also owe the National Debt. So what we might gain in higher returns by shunning Treasury Securities we would have to make up in the higher interest cost to carry our National debt. It’s almost as if we owned most of Sears, and were also its biggest customer. Would we really come out ahead taking all our business to Wal-Mart? And if we did shift Social Security massively away from Treasuries, driving down their price, would that not force the general level of interest rates up? What would that cost the US consumer? At the end of the day, even if the administrative and transaction costs of privatization could be kept relatively small – a big if – what would this huge paper-shuffling exercise have accomplished? Why not just tweak the Social Security formula as suggested here last week and go on about our business? Rich McAllister: ‘It’s important not to let people compare Social Security straight-up to a simple savings and annuity plan. To replace Social Security, Brooks would also have to buy a hefty life insurance policy and a very generous disability insurance policy, and with terms that would be very hard to get on the market – no exception for pre-existing conditions, for example. This hits home for me; my mom and dad both died before I was out of high school (expressions of sympathy unnecessary, it was a long time ago). Their life insurance paid nothing because they made the mistake of visiting the doctor and getting a diagnosis too soon after taking out the policy. Social Security survivors’ benefits kept a roof over my head while I went to college. (VA survivors’ benefits paid for the groceries, and I worked part-time and summers to pay for tuition and books.)’ ☞ It’s a good safety net. The cost of administering it is less than one penny on the dollar. Can you think of any insurance company or charity that can say that? Why risk screwing it up? Tomorrow: That Speech
You Want Reindeer? Click Here. December 24, 2004February 28, 2017 It is more blessed to give than to receive – and easier. Or so argues Congressman Barney Frank in a recent thank-you note to contributors, and I agree. ‘It has always seemed to me,’ he writes, ‘that when you are giving someone something, nothing more eloquent than ‘here’ is required. But expressing appreciation as a recipient is a lot harder.’ May you have much to express appreciation for tomorrow, and all the year through. I sure do. I appreciate, for starters, that I live in a country willing to make spending cuts to keep my taxes low. (Rejoice! For every $1 million in dividend income, you’ll save $246,000 over what you paid in 2001.) In case you missed Wednesday’s New York Times: U.S. Cutting Food Aid Aimed at Self-Sufficiency By ELIZABETH BECKER WASHINGTON, Dec. 21 – In one of the first signs of the effects of the ever tightening federal budget, in the past two months the Bush administration has reduced its contributions to global food aid programs aimed at helping millions of people climb out of poverty. With the budget deficit growing and President Bush promising to reduce spending, the administration has told representatives of several charities that it was unable to honor some earlier promises and would have money to pay for food only in emergency crises like that in Darfur, in western Sudan. The cutbacks, estimated by some charities at up to $100 million, come at a time when the number of hungry in the world is rising for the first time in years and all food programs are being stretched. As a result, Save the Children, Catholic Relief Services and other charities have suspended or eliminated programs that were intended to help the poor feed themselves through improvements in farming, education and health. . . . Listen, folks. If we don’t look out for America’s wealthy, who will? This is surely what Jesus would have done. I am also glad we have an incoming Attorney General who in his last assignment rewrote the rules on torture. But – abrupt shift in tone – for all the dismay that bubbles to the surface when I read the paper, and the sarcasm that inevitably rises with it, I am actually one of those ‘glass half-full’ guys – a trait never more to be indulged, I think, than on Christmas Eve. So in that spirit . . . 1. While it’s easy to paint pretty dreadful scenarios for the next few years, financial and otherwise, I think there’s also a shot that, with Arafat gone, and people just so tired, a virtuous cycle may have begun . . . that the Palestinians and Israelis will begin one-upping each other not with acts of retaliation but of reconciliation. The implications for global security – and prosperity – would be huge. 2. While the Dow is no bargain here, given all we face and the astonishing rate at which we are going into debt to our friends overseas, that’s when you look at it in dollars. To a Canadian, the Dow is actually down from last year, and potentially more attractive – because the Canadian dollar buys about 25% more than it did in 2003. To a European, the Dow is lower still, as the dollar has fallen about 50% against the euro under this President’s stewardship. And – however much or little this may help to shore up U.S. stock prices over the next year or two – there is this: As our friends abroad become more prosperous and efficient, they will have the wealth, decades from now, to buy the shares of stock that we, by then in our seventies and eighties and nineties, will be selling to fund our retirements. If two and a quarter billion Chinese and Indians (among others) prosper, that is not only good for them – more than a third of mankind – it should be good for us, too. 3. Have you noticed? The days are getting longer! # # # Religion scares me, at least when people start thinking that their God is bigger than someone else’s. But you don’t have to believe Jesus was the son of God to embrace his teachings . . . nor believe reindeer can fly to love Christmas . . . nor believe in angels to believe It’s a Wonderful Life. The trick is finding ways to make it wonderful for as many people as possible, not just the privileged few. Suggestions welcome year-round. Merry Christmas. Click here.
More Social Security December 23, 2004February 28, 2017 Tom Roth: ‘You didn’t mention ‘means testing.’ No reason why the rich are getting Social Security checks.’ ☞ Means testing raises all kinds of administrative issues (and annoys people who’ve been paying to the system all their lives). But one small nod in that direction that I’ve long favored, but didn’t include Tuesday, would be to make ALL Social Security benefits taxable, not just 85%, as now . . . the notion being that for those relying solely on Social Security, no tax would be due, while for someone with $200,000 a year in bond interest, well, yes, they’d give back a little more of their (unneeded) safety net. A sort of very modest but efficient means test – zero extra administration required. Brooks: ‘I’d still bet that if I had my 12.4% myself and invested directly in conservative bonds in a manner that I could draw out as an annuity upon reaching retirement age, my payout would be more than the Social Security checks I’ll get.’ ☞ Very likely. But in the meantime, all the people your Social Security contributions are currently going to would lose their benefits and starve to death. (Note to readers wondering what that 12.4% is: It is the retirement tax you pay if you’re self-employed, or 6.2% from your paycheck plus 6.2% from your employer.) Brooks continues: ‘The real reason I oppose ‘privatizing’ social security is that so many people will invest recklessly and lose their retirement funds and I’ll be hit up to pay for them anyway as either a new tax or an appeal for funds through my place of worship or some other community organization. And I, like a dope, will pay while others of equal wealth will say, ‘The heck with ’em, they had the money and blew it . . . let ’em starve / freeze / whatever.’ And then, of course – once people realize that someone will take care of them anyway – future workers will have an incentive to make even riskier investments with their retirement funds (or just spend them), increasing even further what my progeny will wind up paying in taxes and/or charity to keep the risk-takers from starving in their old age.’ Ken Hoerner: ‘I lost about 85% of my long-term, self-managed IRA account’s value during the tech meltdown in 2000-01. Thank God I wasn’t managing my Social Security.’ SHORTING YOUR HOUSE I said yesterday I didn’t know how. One of you kindly sent me this link. (Thanks, Marc!) I can’t vouch for the futures market in local home prices that they are cooking up . . . I would worry about ‘spreads’ and transaction costs. But it could be worth a look. Then again, most people should not make themselves crazy about this. If you live in a home you love and can afford, just keep enjoying it. David: ‘One way to get some gain from a housing market bubble burst (try saying that fast) is to sell your house now, rent for a while, then buy something similar or grander in the depressed/adjusted market. Lots of transaction costs, however.’ ☞ I know folks doing exactly this. You never know; but it could make sense. Tomorrow: Only cheerful thoughts.
Calling Home for the Holidays December 22, 2004January 19, 2017 PROFITING FROM THE HOUSING BUBBLE Yaakov: ‘OK, let’s say you believe – as The Economist does and as I do – that the housing market in the US (and even more so in the UK) is a bubble ripe for bursting. Is there a way of shorting the housing market, other than selling the limited real estate one might happen to own? In other words, the capitalist’s $64,000 question: HOW DO WE MAKE MONEY OFF OF THIS?’ ☞ No easy way I know of. I suppose there are some housing-related stocks one could short or buy puts on. But timing this is nigh impossible. The simplest thing might be to set aside some patient cash and wait for a chance to buy much lower, if that chance arises. COMPLETELY FREE PHONE SERVICE Brent Reeb: ‘Any discussion of cheap phone rates should include Lingo. This VOIP phone, comparable to Vonage, gets me unlimited calls to US, Canada and 17 countries in Europe for $20/month. You can also sign up for plans for unlimited calls to Asia for $34.95. If you don’t call that much they have a $15 plan and you can pay by the minute for out-of-plan calls –$.02/min to Hong Kong for example. Or $.12/min to the ever-popular Lesotho.’ ☞ Or how about this, completely free: Noah Stern: ‘Take a look at Skype, which allows you to use your computer as a telephone. The software is free and easy to use (though you might want a headset/mike ($8 at Fryes). It’s free to call other Skype users anywhere in the world, and it can be used to call regular telephones. Skype international rates, priced in Euros, are cheaper than many (but not all) of the rates listed by the providers you mentioned. For example, my wife pays 5.2 Euro cents a minute to call her extended family in Costa Rica. Here’s the rate list.’ ☞ Most computers have speakers and microphones built in, and 12 million people use Skype. If you want Junior’s calls home to be free, just both download this software. Doug Simpkinson: ‘While we’re on the subject of cheap telephone calls, how about a cell phone for $6.67/month? Many mobile phone companies have a ‘prepaid’ plan that is geared towards the young or credit-challenged. But it’s also perfect for someone like me, who is almost always at home or work but wants a mobile phone for driving and weekend activities. Usually you pay $20 up front to ‘charge’ your account, and each call you make deducts from that amount. After 90 days, your account expires, and you either have to pony up $20 more, or your account dies and you lose the rest of the money. If you do the math, the minimum required payment is $6.67 per 30 day month. There’s No contract, if you don’t like the service just stop paying. And as long as you buy another $20 within that 90 days, you keep any left over money you had from before. (Usually, no roaming is allowed, so you have to be sure to check the coverage map.)’
Social Security Crib Sheet December 21, 2004February 28, 2017 I’m reposting this because the hamster on our hard drive apparently went for a break yesterday without first securing a replacement, so a lot of you saw Friday’s column instead. (Also, this gave me a chance to tweak it a little.) Tomorrow: calling home free for the holidays. But today: SOCIAL SECURITY Here are some things to know: 1. The system is not going broke. For now, it takes in $180 billion or so each year more than it pays out – even though we have only 3 workers for every retiree (down from 41 when the system was launched). 2. Yes, it would be much, much better if we had not decided to blow that annual surplus on a tax cut to rich people. (Imagine taking your daughter’s hard-earned college fund and just giving it away to some rich stranger.) 3. And, yes, in a few decades there will be more like 2 workers for every retiree instead of 3. At that point, instead of running surpluses, Social Security could be running deficits (which today’s surpluses were meant to fund). 4. But it’s not as if Social Security benefits would disappear. They just might be (oversimplifying wildly here, based on two workers instead of three) 2/3 of what they are today. Which is why we need to make some adjustments . . . 5. Here’s one example of relatively painless adjustments that would solve the problem without ‘privatizing’ Social Security. (I’ll get to that in a minute.) You would just take a little from column a, column b, and column c: a. Right now the age at which you can retire with full benefits inches up to 67 by 2027. What if it kept rising one month per year, to age 68 in 2039? You could still take partial benefits as early as age 62; for full benefits, you’d have to wait one more year. But you would have 30 or 40 years (if you started now) to save a little extra to keep this from being a hardship. b. Few advocate raising the already hefty payroll tax RATE, currently 6.2% each from you and your employer (plus a further 1.45% each for Medicare). But what if, instead of having that 6.2% drop to zero on income above $90,000-or-so, as it does now, it dropped to 1% instead? Annoying, but not a killer; and worth paying so that grandma – much as we love her – doesn’t have to move in. c. Once you start receiving benefits, they rise with inflation, as they should. And in calculating your initial benefits, your prior years’ contributions are adjusted for inflation as well. If we made those adjustments based on ‘price inflation’ rather than ‘wage inflation,’ the system would save a fortune. Indeed, we probably wouldn’t need to do (a) and (b) – just (c). But some combination of the three is likely to go down easiest. So that’s it. As I wrote in PARADE a year or so ago: ‘A bit of pain around the edges, with plenty of time to prepare for it – and the Social Security problem is solved.’ 6. We don’t need privatization, much to the regret of an army of Wall Streeters who thrill to the prospect of trillions more dollars to take a tiny piece of each year. I would regret it, too, if I were on Wall Street. Here are the things I think people should know about privatization: a. Our retirement system is already privatized! Your IRA! Your 401(k)! Your 403(b)! Your SEP! Your Keogh Plan! These are great private accounts and everyone should do his or her best to contribute to them, because: b. Social Security, even once fixed, will not provide a comfortable retirement . . . nor, at least in recent memory, has it ever or was it ever intended to. It is a safety net. It should provide subsistence for folks who, through irresponsibility or bad luck – or uncommon longevity – have nothing else to fall back on. For everyone else, it should provide no more than a welcome supplement to a lifetime of prudent, private, saving and investing. Even if we privatized accounts, we’d still need a safety net. c. There is no free lunch. The thought is that – even with the cost of administering 150 million new private investment accounts – individuals would come out ahead because (as we all know) over the long run, stocks outperform bonds. By this reasoning, no long-term investors should buy U.S. Treasury bonds (or any other kind). Not us, not insurance companies, not the Chinese and Japanese – the interest rate is too low; you’ll come out ahead if you invest in stocks. But if no one buys our Treasury bonds, how do we fund our massive deficit? How do we refinance our nearly $8 trillion National debt (most of it run up under Presidents Reagan, Bush, and Bush)? Simple: The Treasury would have to raise interest rates high enough so that people would buy our bonds. At which point two things would have happened: First, we would have made it much more expensive to finance our ever-growing debt, saddling American taxpayers with that much more in annual interest expense. (Raise the cost of funding the $8 trillion debt by 4%, and you add $320 billion to our deficit . . . or else you have to raise taxes by $320 billion a year to pay the extra interest.) Second, we would have made Treasury bond yields a lot more attractive relative to stocks. (So why the great rush out of bonds and into stocks in the first place?) If we lived in a world starved for equity capital, one might make the argument that tilting the world’s investments a little more toward risk could enrich us all. But do great productivity-enhancing investment opportunities really go begging today for want of capital? And if so, are American workers really the best ones to make those capital allocation assessments? d. If workers are allowed to funnel a portion of their payroll tax to private accounts – yet we plan to keep paying full benefits to current retirees – how do we make up the shortfall? The current answer seems to be that we will just borrow $1 trillion or $2 trillion more. And we will do that by issuing more Treasury bonds we think no one should buy. The simple truth is that privatizing a portion of the safety net is not necessary – and wouldn’t work. The only clear beneficiary would be the financial services industry, shifting the balance of wealth yet a bit more away from workers, in favor of a wealthy few. And that’s not sufficient reason to mess up a system so integral to our social fabric.
Social Security Crib Sheet December 20, 2004February 28, 2017 So much to respond to from last week, and so much more I owe you. But since this has been placed at the top of the agenda, let’s start the week with this. SOCIAL SECURITY Here are some things to know: 1. The system is not going broke. For now, it takes in $180 billion or so each year more than it pays out – even though we have only 3 workers for every retiree (down from 41 when the system was launched). 2. Yes, it would be much, much better if we had not decided to blow that annual surplus on a tax cut to rich people. (Imagine taking your daughter’s hard-earned college fund and just giving it away to some rich stranger.) 3. And, yes, in a few decades there will be more like 2 workers for every retiree instead of 3. At that point, instead of running surpluses, Social Security could be running deficits (which today’s surpluses were meant to fund). 4. But it’s not as if Social Security benefits would disappear. They just might be (oversimplifying wildly here, based on two workers instead of three) 2/3 of what they are today. Which is why we need to make some adjustments . . . 5. Here’s one example of relatively painless adjustments that would solve the problem without ‘privatizing’ Social Security. (I’ll get to that in a minute.) You would just take a little from column a, column b, and column c: a. Right now the age at which you can retire with full benefits inches up to 67 by 2027. What if it kept rising one month per year, to age 68 in 2039? You could still take partial benefits as early as age 62; for full benefits, you’d have to wait one more year. But you would have 30 or 40 years (if you started now) to save a little extra to keep this from being a hardship. b. Few advocate raising the already hefty payroll tax RATE, currently 6.2% each from you and your employer (plus a further 1.45% each for Medicare). But what if, instead of having that 6.2% drop to zero on income above $90,000-or-so, as it does now, it dropped to 1% instead? Annoying, but not a killer; and worth paying so that grandma – much as we love her – doesn’t have to move in. c. Once you start receiving benefits, they rise with inflation, as they should. And in calculating your initial benefits, your prior years’ contributions are adjusted for inflation as well. If we made those adjustments based on ‘price inflation’ rather than ‘wage inflation,’ the system would save a fortune. Indeed, we probably wouldn’t need to do (a) and (b) – just (c). But some combination of the three is likely to go down easiest. So that’s it. As I wrote in PARADE a year or so ago: ‘A bit of pain around the edges, with plenty of time to prepare for it – and the Social Security problem is solved.’ 6. We don’t need privatization, much to the regret of an army of Wall Streeters who thrill to the prospect of trillions more dollars to take a tiny piece of each year. I would regret it, too, if I were on Wall Street. Here are the things I think people should know about privatization: a. Our retirement system is already privatized! Your IRA! Your 401(k)! Your 403(b)! Your SEP! Your Keogh Plan! These are great private accounts and everyone should do his or her best to contribute to them, because: b. Social Security, even once fixed, will not provide a comfortable retirement . . . nor, at least in recent memory, has it ever or was it ever intended to. It is a safety net. It should provide subsistence for folks who, through irresponsibility or bad luck – or uncommon longevity – have nothing else to fall back on. For everyone else, it should provide no more than a welcome supplement to a lifetime of prudent, private, saving and investing. Even if we privatized accounts, we’d still need a safety net. c. There is no free lunch. The thought is that – even with the cost of administering 150 million new private investment accounts – individuals would come out ahead because (as we all know) over the long run, stocks outperform bonds. By this reasoning, no long-term investors should buy U.S. Treasury bonds (or any other kind). Not us, not insurance companies, not the Chinese and Japanese – the interest rate is too low; you’ll come out ahead if you invest in stocks. But if no one buys our Treasury bonds, how do we fund our massive deficit? How do we refinance our nearly $8 trillion National debt (most of it run up under Presidents Reagan, Bush, and Bush)? Simple: The Treasury would have to raise interest rates high enough so that people would buy our bonds. At which point two things would have happened: First, we would have made it much more expensive to finance our ever-growing debt, saddling American taxpayers with that much more in annual interest expense. (Raise the cost of funding the $8 trillion debt by 4%, and you add $320 billion to our deficit . . . or else you have to raise taxes by $320 billion a year to pay the extra interest.) Second, we would have made Treasury bond yields a lot more attractive relative to stocks. (So why the great rush out of bonds and into stocks in the first place?) If we lived in a world starved for equity capital, one might make the argument that tilting the world’s investments a little more toward risk could enrich us all. But do great productivity-enhancing investment opportunities really go begging today for want of capital? And if so, are American workers really the best ones to make those capital allocation assessments? d. If workers are allowed to funnel a portion of their payroll tax to private accounts – yet we plan to keep paying full benefits to current retirees – how do we make up the shortfall? The current answer seems to be that we will just borrow $1 trillion or $2 trillion more. And we will do that by issuing more Treasury bonds we think no one should buy. The simple truth is that privatizing a portion of the safety net is not necessary – and wouldn’t work. The only clear beneficiary would be the financial services industry, shifting the balance of wealth yet a bit more away from workers, in favor of a wealthy few. And that’s not sufficient reason to mess up a system so integral to our social fabric.
Shake a Snow Globe December 17, 2004February 28, 2017 MORE ON OHIO If you love America, click here. Because one of two things happened. Either the election was stolen, which would be very, very bad. Or, with the current voting system, it could have been, which is not so good either. It means we can’t trust the outcome of elections in America. Few things could worse threaten our democracy. And all we need to do to fix it is – fix it. Why are Republicans not joining Democrats in demanding reforms that will assure fair, trustworthy elections? Josh: ‘Ohio election fraud conspiracy theories. You have gone nuts, Andy. Soon it will be allegations of missing strawberries. Careful – you have your credibility as an author to protect, and it is at risk in the eyes of objective viewers.’ ☞ Josh, if there is no paper trail from machines, are you OK with that? Is someone nuts to object? If there is systematic voter suppression, are you OK with that? Is somewhat nuts to object? By mocking these concerns and attempting to stifle consideration of them, you do no one any favors. HOW DUMB IS THIS? From Nathaniel Frank’s New York Times op-ed yesterday, in part (emphasis added): Two lawsuits were filed last week against the United States military. In one, eight soldiers are challenging an Army policy that extended their tours of duty in the Middle East. They are suing to get out of military service. In the other suit, 12 gay and lesbian veterans are challenging the decade-old “don’t ask, don’t tell’ policy that bars known gays from serving in the armed forces. They are suing to get back into the military. [T]he Pentagon has recalled thousands of former troops from civilian life to fill these gaps. Many of these recalls would have been unnecessary if the military had not fired so many gay service members. This year the Pentagon approved the recall of 72 veterans in communication and navigation, but it has expelled 115 gay troops in that category since 1998; it recalled 33 in operational intelligence but has expelled 50 gays; recalled 33 in combat operations control but expelled 106. Overall, the military has announced the recall of 5,674 veterans since June, but has discharged 6,416 soldiers under its ‘don’t ask, don’t tell’ policy since 1998 . . . including linguists; intelligence personnel; nuclear, biological and chemical warfare experts; artillery specialists; and missile guidance and control operators. The gay plaintiffs are suing on constitutional grounds. Yet the evidence suggests that the current policy should also be challenged on grounds of national security. . . . Seventy-nine percent of the public now favors letting gays serve openly. For the first time, a majority of junior enlisted personnel support open gays in the military. WELL, IT’S FRIDAY David Bruce: Shake some people in a snow globe. But when you get tired of that, read the link about Ohio.