ONE THING *NOT* TO WORRY ABOUT: SOCIAL SECURITY
This excellent piece by Mark Weisbrot makes a clear case that the concerns over Social Security are overblown. A cynic might suggest that all the scary talk was just the Bush Administration trying to dismantle the social contract and cut Wall Street in for a slice of the pie. But whatever the motivation, I believe the truth lies someplace between ‘we really need do nothing now’ and, ‘well, that’s true, but some modest tweaks would best be put in place sooner rather than later.’
[My tweaks: (1) I’d keep 62 as the age for early retirement. But, where currently the full-benefits retirement age rises one month per year to 67 in 2027, I would let it keep rising to 68 in 2039. (Hey: ‘Seventy is the new fifty-five.’) (2) Where the 6.2% tax rate you and your employer each pay drops to zero on wages above a certain cap, I’d have it drop 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.) (3) I’d keep raising benefits with inflation. But for higher-income recipients, I’d calculate those benefits based on price inflation, not wage inflation, in years when prices rose slower than wages. Bang: you’re done. A bit of pain around the edges, with plenty of time to prepare for it, and the Social Security problem is solved.]
TWO THINGS WE *DO* NEED TO WORRY ABOUT:
MEDICARE AND MEDICAID
Our health care system is wildly inefficient. Perhaps adding a million more insurance administrators and marketers would do the trick, but I am of the school of thought that it’s more nurses, doctors, and preventive care that we need, not a million administrators. Have you seen Sicko?
Fred Reynolds: ‘Regarding Tuesday’s mention of the mileage of the Smart car, it would, if the published numbers are correct, reduce the mileage we get. Our 2002 Toyota Echo gets between 42 and 46 MPG, depending on how much highway driving we do. Part of that is the way we drive (coast down the hill, anyone?), but the EPA lists the highway mileage as 38 mpg. We spent a little bit more than you list for the smart car (there are advantages to buying in December), but getting a back seat and a trunk for the extra few thousand dollars seems a good tradeoff. This is not to say that this is the only other car that will get over 40 MPG on a regular basis. My old Ford Festiva did. I suspect most well designed small cars driven reasonably well will.’
Stewart Dean: ‘Another result of high European fuel prices is that they’ve learned the simple answer to better mileage: drive a diesel. Half the new cars sold in Europe are diesels, and they’re as clean as gas models. Our diesels have been dirty because, until recently, our diesel fuel was high-sulfur which turns into sulfuric acid and eats up catalytic convertors. I drive an old 2003 (dirty) mid-size VW Jetta Diesel and get just under 50mpg, but the 2008 VW TDI Diesels will be of the clean European type. Buy one, you won’t be disappointed. Diesel fuel is easy enough to find; and with 750 miles on a tank, it wouldn’t matter even if it weren’t. Plus you can run biodiesel (the payback on soy is MUCH better than corn; it doesn’t have to be fermented; it’s easier on the land) or run it as a greasecar. Gasoline is for chumps. Now if VW would only import their Polo BlueMotion Diesel: 70+ mpg.
‘BTW, the increased mileage of a diesel is based on two factors: First, the fuel has more energy (it’s heavier, duh, than gasoline); and, second, the engine operates more efficiently than a gas engine. Other diesel realities: 1) the engine has to be stronger, since it runs at higher compression…hence the distinctive giveway clatter of a diesel. The extra strength and complexity makes it a bit more expensive . . . 2) the fuel is identical to home heating oil, so it competes in the market with it and thus is more expensive than gas in the winter (when HHO is in demand) and cheaper in the summer. In a fuel shortage, you could tank up out of your heating oil tank (but the powers that be Do Not Like That since there’s no road taxes on HHO). HHO is dyed red and there’s a length of clear tubing in your diesel’s fuel lines that would enable a cop to see if you had cheated . . . 3) is easier to make at the refinery than gasoline . . . 4) stores a long, long time. I have a diesel generator that has started up, bang, and running after sitting for two years. A gasoline engine wouldn’t have. The only real place for gasoline engines is in super-cheap and high-performance vehicles. Here‘s a piece of fun: VW’s road-capable 250 MPG demonstrator concept car.’
Jim Roberts: ‘Britain’s G-Wiz electric car costs £7,999 (about $16,000). London waives the £8 city congestion charge and offers free charging!’
Quote of the Day
The Beardstown Ladies’ Common-Sense Investment Guide. A classic from the investment club that has outperformed Wall Street gurus three to one. ("It’s easy to get investment advice these days. But in this volatile market, it’s important to separate the faddish from the trustworthy.” The Beardstown Ladies, it turned out, had widely underperformed Wall Street.)~American Bookseller's December 1997 list of recommended investment books.
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