The Half Baked Lunatic

 
I could never vote for a liberal candidate; I’m so conservative that even the Republica [More]

I’m really tired of seeing these news stories, pretty much every single week lately, about some kid (usually under age ten) who gets their hands on a gun and accidentally shoots themselves, a parent, sibling, or their best friend. It’s not so much that I’m against guns; but I’m certainly against the American attitude towards guns. Everyone is so concerned about their “right” to own a gun. But with rights come responsibility. The question shouldn’t be “do I have the right to own a gun?” – the question we should ask is “am I willing to bear the responsibility of owning a gun?” Pro-gun advocates often invoke references to Switzerland as a country where gun ownership is high and crime is low. I lived in Switzerland for a year and just recently moved back to the USA. In Switzerland, every adult male must serve in the armed forces for at least two years, and those that have received combat training are considered “reservists” – and as such, they are required by law to keep their military issued service arms at home in case of an attack by a foreign country. The difference is the Swiss attitude towards the firearms. Gun ownership is for the protection of the country; it’s not for personal protection, not an item that is brought out and shown off to all your friends, not something that is brought along to the bank or grocery store, not something that you can buy and sell at a flea market or local shop, and certainly not something that is left lying around for kids to pick up and play with. It is not a “right” to own a gun in Switzerland, it is a responsibility, which they take very seriously. The Second Amendment to the US constitution states: A well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed. I know the issue has been bashed to death by the courts, and everyo... [More]

Everyone knows that our national debt is completely out of control. But there’s an important issue that the press seems to be ignoring: the potentially devastating effect of rising interest rates. The Federal Reserve is responsible for implementing our fiscal policy, but the Fed can not “set” interest rates – the overall market does that, based on supply and demand.  However, the Fed can influence rates by increasing or restricting money supply.  At the moment, just like in Louisiana and Mississippi, the floodgates are wide open. The bond market is awash in “virtually free” money, which is artificially keeping interest rates at historic lows. But here’s the crux of the issue: with the floodgates open, the reservoir will eventually run dry – and the expectation is that interest rates will then rise. What happens to our federal budget when rates go up?  It could get really ugly really quickly. Here’s why: If you look at the chart in my earlier post, Trying to Make Sense of the Federal Budget, (the second chart, with the Social Security and Medicare numbers removed), you will see that interest payments on the federal debt clocked in at $218 billion in 2010, or 11% of our federal budget: The weighted average interest rate of all the US debt currently runs about 2.07%.  Shorter term debt has a lower interest rate – less than .25% – and longer term debt has a higher interest rate – approaching 4.375%. When longer term debt is more expensive than short term debt, we have what is referred to as More...

Pop quiz: What percent of our federal budget goes to the military?  If you look at the “official” budget numbers, the White House reports that Defense spending takes up just over 19% of our budget. Here is what our government spent in 2010, as reported by the Office of Management and Budget and the Department of the Treasury: At first glance, this looks like a reasonably balanced chart, without any single slice of the pie taking up too much of the available dough (the pun was intended, although the joke was – admittedly – kind of crusty). However, there’s been an unfortunate trend which started sometime around the Reagan era, where they try to “de-emphasize” the amount we spend on Defense by including More...

Newsflash: The cost of healthcare in America has been out of control for many years and we really need to do something about it! Ok, so this isn’t news. And we already have the all-new healthcare reform legislation which fixes all our problems, right? Unfortunately, this new law – officially called the “Patient Protection and Affordable Care Act” (PPACA) but more affectionately referred to as “Obamacare” – has some problems, and now a few people are lobbying to ditch this plan so they can come up with something different. Part of the problem with baking up a new healthcare plan is that there are so many fingers in the pie, all with vested interests – you have the healthcare insurance companies, malpractice insurance companies, pharmaceutical companies, hospital owners, nurses unions, lobbyists, medical licensing boards, government agencies (FDA, HHS, CDC, VA, CMS, etc), the politicians (who love to shoot down whatever their opponents propose, no matter what it is) ... and let’s not forget the doctors and the patients themselves.  It really is fundamentally IMPOSSIBLE to implement any reform that won’t upset someone in the chain. It’s a political nightmare, and everyone knows it – but something has to be done. More...

The star studded 1983 movie "The Big Chill” was about a weekend reunion of a bunch of old college friends – now in their early 30’s – who all get together for the funeral of Alex, one of their classmates who committed suicide. The movie is poignant, intelligent, very funny, and somewhat disturbing all the same time. It’s about rekindling old friendships, coping with the shock of their friend Alex’s death, and wondering what happened to the social idealism that they all shared when they attended the University of Michigan in the late 60’s. They were all anti-establishment, idealistic, smart, enthusiastic, with a vocal desire to change the world and make it a better place. Alex, now deceased, was a charismatic science major. Everyone thought he was the most intelligent one of the bunch – and their mutual friendship really survived through the years because of him. He was the glue that kept them all together, but he was never able to get his own life straightened out. Now, in 1983, they realize they are becoming the conservative “establishment” that they protested against in college.  More...

  A good friend of mine forwarded the following email to me the other day.  Now, before I begin, this friend is one of the smartest people I know.  He is the CEO of a rapidly growing company, introducing successful new products into the marketplace even in this economy. He is a vocal Republican, so all I ever heard from him for about 20 years was that “it’s the Democrats fault” when referring to ANY problems in the world.  I’m neither democrat nor republican, so it's never bothered me any. But then, halfway through the second term of the Bush administration, he swung around and admitted that maybe it’s not ALL the Democrats fault, the Republicans need to take some part of the blame for the state of the world’s affairs. And horror of horrors, he hesitantly (accidentally?) said some positive remarks towards Obama during the election (but really, I think it was more of an anti-McCain sentiment than anything, in one email he said “clearly McCain is an even worse war monger than Bush, very scary.  I bet he never met a weapon he didn't buy.”) However, he’s back to his lovable More...

There is absolutely NO WAY that any kind of a mortgage bailout will be fair.  The people who would benefit from mortgage assistance are generally the ones least likely to deserve it. Hardest hit are people who either bought a bigger house than they could really afford, and people who snagged one of those great “no money down” loans.  Are YOU willing to subsidize someone who is living in a luxurious home they shouldn’t have been able to afford in the first place?  Is that the kind of behavior that we are trying to encourage? Absolutely not! While I do have great sympathy for someone who is losing their home after 20 or 30 years, let’s look at the reality of who this might be: Assume someone bought a house More...

It sure is interesting living in Washington D.C. I’m not talking about the inauguration yesterday, which was spectacular by the way – but in general, you just can’t get away from politics here. The latest issue that’s getting my goat is this idiotic push to make Washington DC the 51st state.  The DC license plates proudly proclaim “Taxation without Representation” and there are posters all over the city pushing for DC statehood. The underlying issue is the fact that DC has no representation in congress.  Some residents feel that More...

  Tax reform is coming - again (and again, and again!)  It seems that every few years, the government realizes that the tax code is broken and they make a bunch of changes to "fix" it. More precisely, they usually ADD a bunch of new laws, making the labyrinth of regulations so complex that not even the trustiest and experienced of tax advisors can really say what's what anymore. There are three tax laws that, in my opinion, should be first on the chopping block: The Alternative Minimum Tax This is one of the least popular (if ANY tax law can be considered "popular") regulations on the books.  It came about in 1970 as a way to make sure that the wealthy paid some minimum tax, no matter how More...