The New York Times has been critical of Marco Rubio’s yacht – clearly an idle rich man’s toy.
They take no notice of Secretary of State John Kerry (who by the way served in Viet Nam (for three months)), who also has a little boat to play with.
Let’s see what these two boats look like. First, Kerry’s. It’s the one on the left.
The 76-foot yacht is valued at $7 million. Kerry, who lives in Massachusetts, keeps it in nearby Rhode Island, saving him about $70,000 a year in taxes, and about $400,000 in sales tax.
Kerry can obviously afford to keep and run a yacht like that, and as far as I’m concerned, he’s welcome to it.
Now let’s look at Rubio’s yacht:
It’s a sport fishing boat, 25 feet end to end. It cost $80,000. And it’s docked in Florida, Rubio’s home state.
Experience should teach us to be most on our guard to protect liberty when the Government’s purposes are beneficent. Men born to freedom are naturally alert to repel invasion of their liberty by evil-minded rulers. The greatest dangers to liberty lurk in insidious encroachment by men of zeal, well meaning but without understanding.
That’s from a Supreme Court decision made in 1928, by Justice Brandeis. It was a dissenting opinion. It is even more relevant today than it was then.
The case is Olmstead v. United States, about whether wiretapped phone conversations – which federal agents got without warrants – could be used as evidence in a trial. (The trial involved bootlegging during the prohibition era, which was in fact illegal.)
The Court ruled against the defendants. The Chief Justice at the time was William Howard Taft, who later became President (the only one ever to hold both offices.)
The decision was finally overruled in 1967, in Katz v. United States.
Both cases involved the idea of a “reasonable expectation of privacy”. Today, the government and its minions take the stand that there is no “reasonable expectation of privacy”. It’s hard to argue against that, with so many people – probably a vast majority – publishing their daily movements and inner thoughts – almost hourly.
His new budget (Budget of the U.S. Government (200+ pages)) claims that
It is our generation’s task to reignite the true engine of America’s economic growth — a rising, thriving middle class.
What could be better? There’s more:
It is our unfinished task to make sure that this Government works on behalf of the many, and not just the few; that it encourages free enterprise, rewards individual initiative, and opens the doors of opportunity to every child across this great Nation.
And an important goal:
A growing economy that creates good, middle class jobs — this must be the North Star that guides our efforts.
Here’s the tite for Part I:
STRENGTHENING THE MIDDLE CLASS AND MAKING AMERICA A MAGNET FOR JOBS
Now we can get into the details.
Encourage Retirement Savings with Automatic Individual Retirement Accounts and Support for Small Employers Who Offer Retirement Plans
Sounds good so far.
The Budget would automatically enroll workers without employer-based retirement plans in IRAs through payroll deposit contributions at their workplace. The contributions would be voluntary …
There are, of course, no details about who or which companies would provide these IRAs.
Now for the bombshell (my emphasis below):
Prohibit Individuals from Accumulating Over $3 Million in Tax-Preferred Retirement Accounts.
Individual Retirement Accounts and other tax-preferred savings vehicles are intended to help middle class families save for retirement. But under current rules, some wealthy individuals are able to accumulate many millions of dollars in these accounts, substantially more than is needed to fund reasonable levels of retirement saving.
The Budget would limit an individual’s total balance across tax-preferred accounts to an amount sufficient to finance an annuity of not more than $205,000 per year in retirement, or about $3 million for someone retiring in 2013. This proposal would raise $9 billion over 10 years.
Those numbers ($3 million, $205,000) weren’t just pulled out of a hat. They’re tied to interest rates, pension regulations, and the cost-of-living index. So as interest rates rise in the future (where else can they go), the %3 million maximum will come down.
But the main point here is, Where does the government (which is supposed to be ours – yours and mine) get off telling us what is substantially more than is needed?
African Americans for Obama is part of Obama’s website.
He leaves off the hyphen. I wonder if that’s significant.
I suppose we can look forward to Romneys’ “White Americans for Mitt”.
Check the Obama page under “Groups”:
“Environmentalists for Obama
A place for environmentalists to organize and speak out in support of President Obama and his environmental accomplishments.”
“Latinos for Obama”
“Native Americans for Obama
A place for Native Americans to organize and speak out in support of President Obama and his accomplishments.”
“People of Faith for Obama
Welcome to People of Faith for Obama, an online home to bring people of many different faiths together through shared values and a commitment to tolerance. The President believes people of all faiths have a place in American public life.”
Just so long as you accept his stand on abortion, birth control, end-of-life counseling, and adoption policies.
“Seniors for Obama”
“Women for Obama”
Read all about Julia.
“Asian Americans & Pacific Islanders”
“Educators for Obama”
That one’s a slam-dunk.
“Jewish Americans for Obama”
“President Obama has been and will continue to be an advocate and ally on issues important to the American Jewish community.”
Just so long as they don’t mention Israel.
For some odd reason, this item is on that page:
1. “Young Americans ages 18 through 26 can now stay on their parents’ insurance plans.
2. Insurance companies now offer many preventive services for free, including flu shots, checkups, cancer screenings, and cholesterol checks.”
[… and more]
“Obama Pride: LGBT Americans for Obama
“The work that we’ve done with respect to the LGBT community I think is just profoundly American and is at the heart of who we are.”— President Obama”
“Nurses for Obama
We hope you’ll use this space to get involved with the campaign’s work with nurses, contribute your ideas [Ed note: and your money], and help tell the story of how nurses are shaping this movement.”
Probably #2 behind teachers.
“Rural Americans for Obama”
“Veterans & Military Families for Obama
Welcome to the Veterans and Military Families for Obama online home—… Since day one, President Obama has made it a priority to keep the sacred trust we hold with those who wear the uniform of the United States and their families. Join us today as we continue to better serve those who have served this nation.”
“Young Americans for Obama”
I don’t think he’s left anybody out. How about “Midgets for Obama”?
Here’s something on another part of the site that will certainly give your leg a tingle:
“Cup of joe – With Joe”
“Want to have a cup of coffee sometime soon?
“I’m sure we’ll have a lot to talk about, but mainly I just want to say thanks for helping out.
“Make a donation to grow this grassroots campaign, and be automatically entered for the chance to come hang out — flight, hotel, and coffee on us. You can even bring a guest.”
That might go over about as well as “Dinner With Obama”. At least at that one, they got dinner.
In several places on the Obama site, they’re playing the “poor me” card:
“The spending on the other side this year is literally unprecedented.”
A blast from the past: In 2008, Obama told audiences on the Ellen DeGeneres show that
… forcing the uninsured to buy health insurance … would be like forcing the homeless to buy homes.
At the time, he was campaigning against Hillary Clinton.
… she mandates that everybody buy health care. She’d have the government force every individual to buy insurance and I don’t have such a mandate because I don’t think the problem is that people don’t want health insurance, it’s that they can’t afford it …
No one has ever convicted Obama of being consistent. Or perhaps it is the case that his position on that issue has evolved.
Debt & Deficit
Sometimes we hear how huge the federal debt is, sometimes it’s the federal deficit. If there’s a difference, nobody seems all that anxious to tell us what – if anything – the difference is.
Therefore, as a public service. I’ll step into the ring.
If you spend more than you bring in, the difference is a deficit. It’s the opposite of “surplus”.
A debt is what you owe somebody. Your mortgage. Your credit cards. What you owe Big Louie’s boss.
In terms of the country, deficit has the same meaning. We take in $2 billion, and we spend $3 billion, that makes for a $1 billion deficit. Pretty soon, it adds up to serious money.
The debt is how much the government owes other people and institutions. Just like your mortgage and your credit cards, standard practice is that you pay it back with interest – otherwise, why would anybody lend money? (except maybe to Uncle Fred, who isn’t doing all that well these days). (It’s better not to think about what Big Louie’s boss expects to get paid back.)
You can keep track of the federal debt at the U. S. Treasury website. Right now, it’s $15,438,518,062,690.37. That’s fifteen trillion and change. Or fifteen thousand billion and change. See what it is when you read this. Last year on this date, it was $14,194,764,339,462.64. That’s an additional $1,243,753,723,227.73, or $3,407,544,447.20 each and every day since then.
(It’s a bit awesome that they can keep track of that “to the penny” – especially when it changes every second.)
But anyway, when numbers get that big, who cares anymore?
The two are connected: If the government wants to decrease the deficit, it either needs to borrow money – and incur more interest payments – or bring in more. It can do that in two ways – neither very appealing.
The careful reader might ask, “who do we borrow money from?”. Let’s look first at the other side of the equation: who do we owe it to?
One group of people they owe it to is us. Treasury bonds, bills, and notes are a promise to pay the holder at a later date. In the Old Days, we bought $100 Bonds for $75, and you’d get $100 after 20 years. They made great graduation presents: they were clearly marked “$100”. Thoughtful parents bought them for their newborn children.
Another group is foreign governments and investors, who buy Treasury securities. The holder of the biggest share of the debt (that’s who we owe the money to) is China.
Other foreign holdings:
Brazil, about $206 billion.
The oil exporting countries: Ecuador, Venezuela, Indonesia, Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, United Arab Emirates, Algeria, Gabon, Libya and Nigeria – together, about $232 billion.
The United Kingdom, about $429 billion.
Japan, about $1.038 trillion.
Finally, China, #1, about $1.132 trillion
Even tiny Switzerland – once a haven for people who wanted anonymity for their holdings – has about $114 billion of that debt.
Back to the borrowing question: the government borrows money from us and from foreign governments and investors. They borrow money by selling Treasury bills, bonds, and notes, and the new TIPS (Treasury Inflation-Protected Securities).
The other way government can bring in more money is by raising taxes. This has proved somewhat unpopular in recent years, so we won’t consider that method here.
The Treasury produces a Monthly Treasury Statement showing receipts and outlays. The government’s fiscal year ends October 31. For FY 2011, we took in about $2,302 billion, and spent about $3,600 billion. That left a deficit of only $1,296 billion.
So far this year, we’re a bit ahead of last year: $419 billion for 2011, $349 billion for 2012 (through January – the latest figures).
That’s a high-level overview of the debt/deficit problem. Now on to the scary part. Let’s say we just want to pay off the debt and start with a clean bankbook.
The Money Supply
There’s a lot of money in the country. That includes the money in your wallet or purse, in the cookie jar, in savings accounts, in IRAs and 401(k) plans, and in the U.S. Mail, going from here to there for things like graduation presents, birthdays, and subscriptions to obscure economic journals.
The Treasury keeps track of all that, too. They divide it up into categories. First, all the money in circulation and in checking accounts. This is called M1.
To that, they add savings accounts, time deposits in banks, and money market funds. This is called M2.
To that, they used to add large and long-term deposits. This was called M3, but they stopped counting those in 2006.
The Money Supply, M2, accounts for all the money in circulation, in banks and savings accounts, Basically, it’s all the money there is. Currently, all the money there is amounts to about $9.8 trillion.
The depressing lesson here is that we could take all the money there is – all the coins, all the bills, all the checking and savings accounts, apply that to the debt, and we’d still be about $5 trillion short.
High-priced cars are all the rage nowadays. Aston Martin cars fill many of the slots in this class, and seem to be the motor car of choice for British secret agents. Bentleys are favored by those who can’t afford a Rolls-Royce. Another is the Maybach. All these cars sell for $200,000 and up. The Maybach is in a class by itself, starting at over $300,000. (Donald Trump owns one of those.)
Here’s a brief comparison:
|Car||Base Price||Engine||0 – 60||mpg||Top speed|
|Bentley GTC||$215,595||6 L, 567 HP||4.5 S||19||180 [note 1]|
|Aston Martin Rapide||$200,000||6 L, 470 HP||5.0 S||19||188.5|
|Chevy Volt||$200,000 [note 2]||149/83 HP [note 3]||9.2 S||36 [note 4]||100|
Note 1: We really don’t drive Bentleys for speed. They merely note that
With the top down, conversational voices are adequate for speeds up to 100 mph; after that, you may need to raise the side windows to discuss global safety or baccarat strategy.
Note 2: The “Base Price” cost to the consumer is between $40k and $46k (depending on options). Tax credits bring it down to about $32,500.
Note 3: The Volt has both an electric and a gasoline engine. The electric engine is rated at 149 HP, the gas engine at 83 HP.
Note 4: It gets 36 mpg when the gas engine is running. As they point out, the first 35 miles are free, as it runs on batteries alone. But still, 35 miles at 35 miles/hour gives you one hour of driving. It gets 36 mpg on the gas engine alone, which gives it a range of about 340 miles.
Now we can ask where the figure of “$200,000” comes from.
According to Michigan Capitol Confidential:
Each Chevy Volt sold thus far may have as much as $250,000 in state and federal dollars in incentives behind it – a total of $3 billion altogether, according to an analysis by James Hohman, assistant director of fiscal policy at the Mackinac Center for Public Policy.
Some have complained that this figure is based only on the number of cars sold so far, and that as sales head toward millions of Volts, the government cost per car will drop dramatically.
However, for the one in the showroom today, the government has spent about $200,000; you have to pick up the extra $40k or so.
We should also note that the first two cars (Bentley and Aston Martin) come without the “burst into flame” option.
However, if you do drive one of the Volts, you get bragging rights to a car that cost about $200,000 to build.