Recap of the News Headlines

I thought I would do a new type of post. I'll list the headlines and then give you some of my brief thoughts about the story (and headline in particular). Warning, I have not necessarily read all of the stories, this is more of a reflection of what thoughts the headlines invoke.

Student Speech Against Gay Marriage Prompts Lawsuit
OK, after reading this I was about to rant that someone is suing because of a speech they didn't like. But, after reading the first couple of paragraphs I find that the headline actually should read "Student Sues School for Violation of Free Speech." Little different huh?

NY's Paterson Wants Tax on Porno Downloads
I lived in New York, they already tax them through the Internet sales tax you have to pay for items bought online that you didn't pay sales tax on (I always estimated mine). Besides, what would you call this bill....

State Lawmakers Look to Booze Taxes for Help
While already being drunk on spending, why not use more booze to help pay for it. Are we going to have ad campaigns that encourage drinking to help out the state?

Jackie Chan Film Too Violent for China
For some reason this doesn't compute. Jailing, torturing, and killing political prisoner's is fine? But a little fast action martial arts is not? Didn't China invent Kung Fu? Ever hear of the Shaolin Monastery?

Stimulus Plan Awaits Signature
Yes, the plan that we couldn't have any delays on because millions were losing their jobs was not planned to be signed until days after it passed. Good thing the money won't start flowing until next week!

NY Senator Moves Guns from Under her Bed
Really. Those were your home defense guns? High powered rifles (are there any other kind)? I lived in Gillibrand's district (didn't vote for her), now I know she is loopy. Home defense guns should be A) loaded or B) have easy access to ammo (i.e. previously loaded clip), in that order. If the gun is A, it shouldn't be stored under the bed in a house with children. If B, then you have drastically decreased its effectiveness and might be better off with a baseball bat. Besides, every gun owner knows that a shotgun or handgun are better for home defense then a rifle.

Barbie Wouldn't Wear That
I hate to say it, but in my house, Barbie wears anything (or nothing at all until I get my daughter to put clothes on her).

Brit Says She's a "Super Sexy" Housewife in New Video
Didn't she already play that role in real life? I guess maybe she is becoming the real life Barbie of Music: Super Sexy Schoolgirl, Super Sexy Astronaut, Super Sexy Biker, Super Sexy Housewife, Super Sexy Snake Charmer, Super Sexy .

Indonesian Women Protest Clinton Visit
And I thought everyone loved her?

Facebook reassures users in wake of service terms change
Do some people not realize that there is no such thing as privacy on the internet? If you don't want someone to know information about you don't post it online. In a similar vein, if you don't want naked pictures of you sent all over the world, don't take them. Why is that such a difficult concept?

Beaver Sighted in Detroit River; First in 75 Years
Does this mean that the beaver is endangered in Detroit River area? Maybe after local residents find him chewing up their poplar trees they won't have another sighting for 75 more years. Of course you can always look for the gentlemen in the new top hat.

Despite Obama's Pledge, Justice Defends Bush Secrets
I guess when you don't know what our government does it is easy to say everyone should know. Now that you've found out, there might be some pretty good reasons not to let the average Joe know about those things.

No Joy in this Cooking - Recipes Can Make you Fat
No, overeating can, and not exercising can. I have hundreds of recipes in my house, and not a single one of them has ever made me fat.

That's all for today. I'll try to remember to do this again next week.

Types of Gun Owners

The other day my daughter asked me why I needed another gun (as I proceeded to buy three "scary" black rifles)? I asked her if she needed another Barbie. We then had a discussion about needs and wants wherein I explained that guns and Barbies are wants. We only get them when as gifts or when we have excess money that isn't being used for other budgeted purposes.

This had me thinking then about the different types of gun owners there are. In general there are the following categories: the professional, the collector, the sportsman, and the enthusiast. People usually fall into more than one category. I'll go over these in a little more detail. Bear in mind, you may classify gun owners in different ways.

Also, people are distinguished by how often they practice (shooting at a target), their familiarity with their firearm, and how much they use a firearm (pointing and/or shooting at something besides a target).

THE PROFESSIONAL
This gun owner uses guns for their livelihood. As a part of this there are subcategories of Military, Law Enforcement, Dealer, Instructor, Defender, and Criminal.
Military people are unique in that they usually don't have the choice of weapons they use. It is issued by the government. Furthermore, the amount of firearms training varies greatly. Some units train regularly with their firearms and shoot thousands of rounds a year. Others "qualify" each year and no more. The vast majority of Military do not "use" their firearms. They are generally familiar with their issued weapon to the point they can break it down, clean it and replace parts.
Law Enforcement people are similar to Military people with a few exceptions. Some are allowed to choose their own firearm. Most receive regular training firearm usage and shoot regularly at the range. Next to Criminals, Law Enforcement use their firearms the most, albeit the majority of the time it is used it is not fired.
Dealers sell guns for their livelihood. Several specialize in certain types and are extremely familiar with them to the point that they may also do gunsmithing. In general, they have a basic familiarity with a broad range of firearms and are one of the first to know about newer designs. More than likely they practice regularly with a large variety of firearms. Rarely do they have any need to use their firearm.
Instructors come in all varieties. They are very familiar with several types of firearms and are a great resource for those new to firearms. Instructors practice more than any other professional user. While they may not ever use a firearm, they are well versed in the legalities of their use.
Defenders are private citizens who responsibly use firearms whether in home protection or concealed carry. They practice extensively with thier primary firearm so that if required to use it they can do so with confidence and accuracy.
Criminals are the group that give firearms a bad name. Familiarity and practice may be non-existent as they see a firearm as something that can inflict harm on others. As such when they use firearms, it is in a wreckless manner that is a danger to those they intend to harm as well as bystanders.

THE COLLECTOR
Some people can't understand that people collect guns like they collect cars, stamps, movies, or beanie babies. I divide collectors into the following subcategories: curator, hobbyist, and specialist.
Curator brings to mind a museum, and that is exactly what these people are like. They have their guns displayed openly and probably own several firearms that they have never fired (or intend to fire). Besides knowing about the firearm itself, they also know about the history behind the firearm.
The Hobbyist has a private collection of guns. They have no intent of displaying them to the general public. They are more likely to shoot each firearm they own (although some with more regularity).
The Specialist is someone between the Hobbyist and the Curator. He has a focus on a single (or few) model of firearm (Glocks, AK-47, Mausers, etc.). Some of these may not be fired. He also has extensive background knowledge about his chosen firearm.

THE SPORTSMAN
There are only two subcategories of the Sportsman: hunter and competitor. Of course there are all sorts of flavors of each of these two.
The Hunter uses firearms to obtain food. He probably has a few firearms which he practices regularly with and is very familiar with. His use of firearms is constrained to the hunting season, and the better he is, the less shots he ends up firing.
The Competitor likes competition (as his name implies). There are firearm competitions for just about anything: target shooting, tactical, distance, clay, cowboy, etc. Several of these competitions require the Competitor to have a finely tuned custom firearm. This is usually done by the Competitor (or at his specific direction) so that he is intimately familiar with his firearm.

THE ENTHUSIAST
Enthusiasts are distinguished by their love of firearms (not necessarily the history, or how they can be used). They include the plinker, gunsmith, modder, and survivalist.
The Plinker is similar to the Competitor, except that he shoots for shooting sake. He is not bound to a target and in fact loves to shoot other things. If you look up any YouTube video which involves the destruction of large round fruit with firearms, you have found a plinker. This is the person that the .22 LR was made for.
The Gunsmith could be a professional or an amateur. He likes to make firearms. We can thank him for all of the AK-47 type rifles that are available. He also has the ability to make a 1911 shoot like a charm.
The Modder takes a stock rifle and turns it into something different. It may be converting a Saiga to an AK-47 type or simply applying a custom camoflage paint job on their rifle.
The Survivalist is an interesting breed (or breeds). They range from the practical - those that recognize firearms would have a limited use in most realistic scenarios they can imagine - to the wacko - who have multiple caches of weapons buried throughout their area of operations. Survivalists are fun to read (but not necessarily take too seriously) on the forums, debating endlessly about the amount of ammo one would carry and which battle rifle would be optimum.

As you may have noticed by now, rarely is a gun owner just one of the types above, but more of an amalgamation of different ones above. I would consider myself a Plinker-Hobbyist, with some possible Modder tendencies. In any case, besides the Criminal, I support everyone's right to be whichever ones they want.

Bubbles and Crashes

With the near certainty of the US Government trying to spend their way out of another self created problem, I thought I would put some thoughts on paper about bubbles and crashes. To begin let me simply define both terms.

Bubble - a rapid increase in the price of something based upon an unrealistic value.
Crash - the correction of a bubble when the market can no longer sustain it.

There are fast crashes and slow crashes. The crash of 1929 (which we always hear about) caused the Dow to fall from a high on Sept 3 of 380 to a low on Oct 29 of 230. A loss of 40%. This was a definite fast crash. What usually isn't talked about is the slow crash that then persisted for the next 3 years. The market finally reached a bottom on Jun 30, 1932, of 43. A loss of almost 90% from the high. Much of this needless degradation of stock value was due to the actions the US Government took to try to stimulate the economy.

This newest stimulus bill is designed to create jobs, stabilize the housing market, and get credit flowing again. The housing market is what I would like to discuss.

Take a look at this graph here. From 1975 to 1999 there was a slight increase in housing prices from $137,000 to $164,000. This calculates to an annual increase of 0.85%. All of a sudden a bubble hits and between 1999 and 2006 prices go from $164,000 to $250,000 or 6.25%, more than 7 times the annual rate over the previous 22 years.

Since then the bubble has burst and we have had a crash of about -7.25% a year. However, median prices are still sky high compared to 1999. The market may be able to support bubbles every now and then, but in the long term look for it to return to average. That would mean another 2 to 3 years of housing prices falling 7% each year or 5-10 years of them falling at a less shocking (but just as devasting) 2-3%.

Can the bailout fix this? No. I'm afraid that because of the bubble, there was a massive glut of new housing construction, and now, there is more than is needed which will continue to drive prices down. Also, since housing is not a liquid commodity like stocks, the crash will more than likely be slow one as it takes time for people to sell their houses (thus realizing what the true value is). The quickest way out of this mess (not the least painless), would be for people and companies to take their losses and quit trying to sell that $15o,000 home for $250,000. If no one is making offers, the price is too high.

That being said, I think we should change the name of bubble to blister. When they form, they are kind of cool to watch, although one would be advised to stay away. You can get rid of them by pricking them with a needle and slowly draining out the pus, taking constant care over several days of pain. Or, you can be a man about it and just rip the skin off, wash it under cold water, swab it with some alcohol (that will sting), and then let it dry out without a bandaid. The pain is usually gone after a day, and the process heals itself within a week, usually with a nice callous that will work to prevent the same place from blistering again. We need to be men with the housing bubble.

The Joy of Free-Market Health Care

With the definite possibility that the US will adopt some form of socialized medicine in the next 4 years, I thought I would share some of the benefits of Free-Market Health Care.

First experience. Our children's doctor's practice was bought out last year by another group (which is wonderful that that can happen). We were fine with the new doctor that they assigned, she was good with the kids. However, we really didn't like their billing and scheduling system. They had separate accounts for each kid (so instead of sending one bill, we got 4 bills) and they wouldn't schedule visits more than 90 days in advance (why bother planning a yearly check-up). So ultimately we switched doctors. The whole process took about 10 minutes. We called up the new doctor and told them the kids would be seeing him now, and called the old doctor and told them we were switching. We didn't have to ask anyone's permission or fill out mounds of paperwork (other than the new form at the new doctors office). Moral of the story: The Free-Market requires doctors (and their office staff) to provide quality services or the people leave.

Second experience. My wife needed new hearing aides. Hearing aides aren't covered by health insurance (which is odd since they cover drug rehab, weight loss, and smoking cessation, all things that are in people's control). They cost about $3500 a pair. She went to three different places here in town and was given different sets to try out for two weeks. My guess is, if she had have tried all of the places in the surrounding 50 miles that sell hearing aides, she probably could have gone 4-6 months before ever paying for them. In the end she found a pair she likes, that comes with service and re-programming every six months and a complete refurbishment after 2 years (before the warranty runs out). Moral of the story: If you pay for it yourself (as oppose to an insurance company, or the government) you get more options, better service, and can find what you want (as well as need).

Third experience. My daughter has a cross eye that we wanted to get checked out. She had an appointment with the optometrist. He didn't know so recommended an opthamologist. We took her there the next week. They couldn't figure it out so they wanted her to have an MRI. We made an appointment for a couple weeks later and then found out that she needed a physical first. We made that appointment for a few days before the MRI. Then tragedy happened: we forgot the physical appointment.

OK, really no worries, they re-scheduled it for the next day. That was done, she had the MRI (which included anesthesia), then she had a follow-up appointment the next day. In total she had 5 doctor appointments within a 3 week period. This for something that was not an emergency nor life-threatening. Oh yeah, and the MRI people gave her a new backpack and some other goodies. Moral of the story: the Free-Market allows for effecient use of resources (note I didn't say most efficient), plus suppliers will try to entice (bribe) you to use there services.

Lets contrast these experiences with socialized (or single payer) medicine. For those in the states who keep touting its benefits, you need to live somewhere that they practice it. I lived in Canada for two years. The doctors went on strike while I was there (yes the doctors). People didn't find this unusual and I found out that it happens on a regular basis (every year or two). In fact everybody goes on strike there at some point (grocers, bus drivers, garbage men, postal workers, etc.). I made it a point never to use the Canadian health care system. I did go to see an optometrist to get new contacts. I paid cash and would you belief it, the contacts were made here in the United States.

With socialized medicine, you might be able to choose your doctor (if there are any taking new patients because of the shortage), but where is the doctor's incentive to give you good service? No where. They get paid the same no matter what. And with a shortage (which socialism inevitably leads to) replacing you as a patient is not a problem.

With socialized medicine, what options do you have? Only the ones that the government allows. While they say they care about us, do you really think they have our best interest in mind? If yes, then why is congress's approval rating around 15%?

How long would appointments take (for elective procedures) under socialized medicine? We have examples throughout the world for this. Canada, England, France, even Cuba. In all cases, there is no efficient use of resources (why should there be, there is no incentive to have efficient use of resources). Wait times can be months. Missing appointments can cause the process to start over again. MRIs would not be possible without the Free-Market (it would never have been invented), so even socialized medicine benefits from Free-Market inventions. And don't even ask for a free pen, let alone a backpack.

That being said, our insurance system in the US is not really Free-Market (I'll write about that another time). But it provides a level of care that is unprecedented in the world. So the next time your kid has an ear infection and you can get Amoxicillin within a day, be sure to thank the Free-Market (and stock up if you are a believer in socialized medicine).

HR1 - The Economic Stimulus Boondoggle of 2009

I was curious last night to find out just what our Representatives voted on in HR1 that is going to stimulate the economy. So I read it. Importing it into OpenOffice it was 400+ pages. After reading all of the appropriations, it looks like Obama's campaign list. Literally. There is money being promised to everyone and everything. So the question then is how much stimulus is this really going to produce. To begin the purpose is listed as:

"Making supplemental appropriations for job preservation and creation, infrastructure investment, energy efficiency and science, assistance to the unemployed, and State and local fiscal stabilization, for the fiscal year ending September 30, 2009, and for other purposes."

Every thing looks good except for the last 4 words. "And for other purposes" means they can include whatever they want in the bill and still honestly say that it meets the stated purpose. America, prepare to be fleeced. We should be used to it by now. We had the Bank Bailout which we have no oversight of and no idea what the money was used for, we have the Detroit Bailout which they will be back begging for more in March, and we have 8 years of increasing discretionary spending under the "fiscally conservative" Republicans. Is it any wonder that they lost in '06 and '08? No reason to vote for a closet big spender when you can have the real thing.

To begin with, any massive spending bill that will be hard for the public to swallow needs to have a payoff to make it easier on the palate. This one gives $500 to each individual who files a return (it is slightly more complicated than this, but to simplify things I didn't want to explain all of the details). Now that the masses are placated, the gross spending can begin.

I compared the CBO report from the 2008 stimulus with the 2009 stimulus. The links can be found here and here. One thing to remember, even though we had the 2008 stimulus, the economy continued to tank.

The amount of tax relief (decreased revenues) in 2008 was $100 billion. The amount in 2009 is $76 billion. So we are getting less money back this year than last year. Somehow I don't think that is going to stimulate the economy. More than likely people will use it to pay down debt (just like last year).

Increased spending in 2008 was $58 billion. The amount in 2009 would be $92 billion. Well that is more, but it pales in comparison to the $4-5 trillion (with a T not a B) that has been lost in the stock market and real estate over the last year.

Total change in the first year was $158 billion in 2008 and $169 billion in 2009. In short, this stimulus plan will do about as much as the last stimulus plan in the first year - nothing. Don't plan on the government getting us out of the recession (I wouldn't be surprised if the recession is over by the end of the year anyway whether the government does something or not).

The real difference between the stimulus bills is what they do over time. The 2008 stimulus was primarily concentrated in one year 2008 with another $50 billion of spending increases and revenue decreases in 2009. The 2009 bill is designed to have $350 billion in "benefits" in 2010, $173 billion in 2011, and $50 billion in 2012.

Overall the 2008 stimulus was 57% individuals deciding how to spend the money and 43% the government deciding how to spend the money. In 2009 the ratio is 26% individuals and 74% government. Which one do you prefer?

Here are some other great quotes from the CBO report:

"CBO anticipates that implementation of H.R. 1 would have a noticeable impact on economic growth and employment in the next few years. Following longstanding Congressional budget procedures, however, this estimate does not address the potential budgetary effects of such changes in the economic outlook."

In other words, they assume that the policy only has the benefits listed in the bill. They don't analyze (and never have) how the policy may change the way people spend and do business (thereby indirectly changing the effect on the economy).

"Throughout the federal government, spending for new programs has frequently been slower than expected and rarely been faster."

In other words, the schedule of outlays from the government is the best case scenario. More than likely it will be much more sluggish.

"Historically, money appropriated for highways and transit is spent at a slow rate in the first year and has an extremely long “tail,” in that funds provided in a particular year are frequently spent over a six-to-eight-year period."

So one of the key job creators that is being pushed in this bill, probably will not result in any jobs this year. And last my favorite:

"Moreover, under H.R. 1, some programs would receive funding that is significantly above (double, triple, or more) the amounts provided for existing or similar programs in recent years. Frequently in the past, in all types of federal programs, a noticeable lag has occurred between sharp increases in budget authority and the resulting increases in outlays. Based on such experiences, CBO expects that federal agencies, along with states and other recipients of that funding, would find it difficult to properly manage and oversee a rapid expansion of existing programs so as to expend the added funds as quickly as they expend the resources provided for their ongoing programs."

In other words, we are going to throw so much money at all of these federal agencies, they won't know what do with it. Also, doesn't it bother anyone that in some cases we are providing "double, triple, or more" money to a program or agency than they normally get? I wish my job would do that for me. Trust me, I could figure out what to do with triple my salary.

Bottom line, we are in a recession. We are probably going to be for most of this year. This bill won't do anything to change that. In the long run, we will come out of the recession, lets just hope the government isn't still trying to micromanage the economy when we do. Propping up failing companies (or failing mortgages) right now will only lengthen the process.

Taxes, Guns, & Furniture Part IV

We probably won't be getting all of the guns and furniture listed in Part III, but we'll try to make a dent. The important thing is to make our mone stretch as far as possible. Even though we have the money to spend, as with all big ticket purchases, we need to make sure that the buy is a good deal.

How is buying furniture going to stimulate our economy? Let me list 12 reasons:

1) We decided to make this a date that we would actually hire a babysitter for instead of mooching off of one of our friends, so some young lady is going to have $20 - $30 extra dollars to spend.

2) Just by going on the date we are going to be using gas that we hadn't planned on. So some local gas station will benefit (we will probably get the car washed at the same time). A refining company will benefit by making the 12 ounces of gas we will need. That had to come from somewhere, so an oil company is going to benefit. Naturally, this will benefit some government due to royalty fees paid to them. If the government is a civilized country (like US, Canada or UK) they will probably use the extra 32 cents to invest in education for the children. If the government is some third world dictatorship (like Venezuela, Nigeria, or Iran) the leaders will probably skim the money from the government and use it to buy luxury goods for their personal use (cars, yachts, HDTVs). These products provide jobs for people all over the world. Either way, people are benefiting from this.

3) We are going to shop locally. So now we can feel good about supporting our local economy and providing jobs for people here at home.

4) The majority of the furniture will have to be shipped in from other parts of the country. This benefits the truckers of America and more than likely the teamsters. So even if I don't like unions, I am still helping them out.

5) The majority of the furniture will also be wood. This means that lumber companies have to chop down trees (providing someone a job) and if they are smart (which most are), plant new trees (providing someone else a job). These new trees are going to soak up a lot of carbon dioxide as they grow up, and since the old trees are made into furniture, their carbon is still trapped. So all of the global warming disciples should be happy that I am buying my own version of carbon credits. (Of course we might celebrate this whole shopping spree by having a charcoal barbeque, but at least we didn't burn down the trees).

6) More than likely, we will have to get rid of some stuff to make room for the new stuff. From this we have several options, all of them beneficial.
a) We can throw the stuff away. This will wind up in the landfill, providing jobs for the people who haul it and work there. Eventually, the whole place will be covered over and turned into a park for future generations to enjoy.
b) We could sell it on ebay. This would give us more stimulus money. Give someone else a product they need at a discount, and decrease the amount of stuff going to the landfill. I will have to ship it to them so either UPS or the US Postal Service will benefit. Everyone wins (except the landfill workers if we took this route for everything).
c) Donate to Goodwill. This is probably the best option. Goodwill is going to give me a charitable donation slip, which will count towards next years deductions (thereby giving me more stimulus money). Goodwill will sell it to make money, thereby providing jobs in our community. Someone will buy it from goodwill and get a good product at a steep discount. Lastly, my wife and I will have a good feeling in our heart knowing we helped someone out.

7) Gun shopping will be at a local gun store. They usually have a great selection of new and used guns. Since my wife will be with me, we can probably pick her up a .22 pistol so that I can get her to go shooting with me (shooting guns and blowing things up is a great date).

8) For every gun you buy it is like doubly stimulating the economy. Whereas furniture you buy it once and then don't have to worry for decades, a firearm requires a constant supply of ammunition. So we'll be back for more. Plus, there is customizing your firearm with scopes, stocks, bipods, and grenade launchers (and any other scary feature that may later be part of a ban).

9) The local gunstore won't have everything, so I will probably have to buy some stuff online. So other people across the country will benefit. For any foreign weapons, these would have been imported providing even more jobs. Furthermore, with every gun purchase from a FFL dealer there is plenty of redundant paperwork that gives somebody in Washington something to do. (Did I mention that someone needs to make the paper to begin with).

10) Another benefit from buying and shooting guns, is it provides jobs to scientists and researchers who are concerned that the lead from our spent bullets is getting into the ecosystem and slowly poisoning all life on earth. So, these purchases directly support science (oh yeah, and they print their results on paper, which someone has to make).

11) Most likely we will go out to eat and provide a tip commensurate with the service we get. So a waitress, a busboy, and a restauranteur will benefit. What's more, if we choose a publically traded chain restaurant, their corporate earnings will increase (benefiting them) which may lead them to pay out a larger dividend (benefiting the shareholders) and the whole process starts over again.

12) Finally, we will probably pick up some ice cream for the kids from the local grocery store. It may be a brand that is made in our state thereby spreading the wealth even more.

To conclude, I would encourage everyone to buy more guns and furniture. It can't be any worse than giving car companies billions to make products we don't want to buy or banks money to buy more banks. Don't rely on the government stimulus, create your own stimulus plan!

Taxes, Guns, & Furniture Part III

Now that the tax situation is explained, it is time to get to the fun part. Guns and Furniture! Your probably wondering how they fit into the equation. Well, after going over our taxes initially, my wife and I realized we would be getting several thousand dollars back that we were expecting and had not budgeted for. (Actually, we haven't made our budget for this year. We usually do that in December, but we have been so consistent with our budget since we were married, we already know what it probably is and what we can spend.) With all of the bailouts and stimulus bills going on, we felt it our patriotic duty to at least spend a good chunk of it.

Bear in mind, we usually plan big ticket purchases well in advance. This year was suppose to be hearing aids (read my wife's blog about hearing aids) and house siding. In addition, we have found that we need to have surgery for one of our kids and so the other big ticket item, furniture, was put on hold. That has all changed.

When my wife saw that she said we could buy the furniture now. Quickly doing the math in my head, I realized there was still going to be a lot left over. So I asked if I could get an AR-15 (one of those scary black rifles that Clinton banned, and Obama says he plans on banning). I have never asked my wife to let me have one before. In fact, under the circumstances, I was saying it more as tongue in cheek.

Her response floored me. "How much is that?"

I hemmed and hawed a bit and said "$1200."

She just nodded and said, "You could probably do that."

My heart stopped, could this really be my wife? I decided to push it a little further. "You know, with $8,000 we could get a Barrett .50 rifle, the rounds only cost $5 a piece."

"Honey, we are not blowing all of this money on one gun." OK, she really was my wife. But notice she didn't even ask me what use I would have for a .50 caliber rifle. Maybe I can convince her of that next year.

She then immediately starts to call her friends to find out where would be the best place to get the furniture we were planning on. Here is the short list:
Dresser and side tables for the master bedroom
Day bed and trundle for the spare bedroom
Mattresses for the bunk beds
Table and chairs for the family room
New dining room table and chairs

As for the guns, at first I was adamant about buying American. Then my wife said "Why not buy some more of those inexpensive Russian guns?" I now had a quandry: Do I go with the American made and try to lift up our own sagging economy or do I look for foreign firearms and do my part as a citizen of the world.

There are still AR-15s to be bought so I know that these are available. However, I just like to shoot and the AR-15 isn't as fun as the AK-47, plus it jams too much. Unfortunately, the AK-47 is so popular and so scary looking it is bound to be the first firearm listed in any new ban. That means right now there aren't many on the market (If you have one and would like to sell it, let me know). Another good option is an SKS. I would prefer to have a Romanian or Bulgarian version, but Chinese ones might be the only ones available right now. With prices today, I could buy an AK-47 and an SKS for the price of an AR-15. Some other rifles I would like, although since I shoot guns for fun, I try to stick with calibers that have very common ammunition.

I could try to get one of each of the major models of the Mosin Nagant. There are several other rifles that I wouldn't mind having before they are banned again. Kel-Tec, FAL, Galil. Then there are Mausers, Garands, Enfields which probably won't be banned (even though they fire more powerful cartridges than most of the scary guns).

There are some other options I could consider.
A Hi-Point 9mm Carbine with the ATI stock would be great because then I can use 9mm ammunition with something besides a pistol.
A lever rifle and a revolver chambered in .357 magnum. Two fun guns that I could use the .357 or .38 special ammunition for.
A 1911 pistol is something else I would like.
I need a .22 pistol or revolver (or both) just to be able to shoot the cheapest ammunition ever.
Last but not least, I would like two shotguns (pump and semi-auto), one with a scary looking pistol grip and folding stock.

Plus, there are some other gun accessories that we could get. A gun cabinet, a gun rest, scopes, cleaning supplies, etc. So many choices, but best of all, my wife gets to help pick them out. This could turn out to be the best date ever!

Taxes, Guns, & Furniture Part II

Let me give an illustration. Pretend for a moment that I make $100,000 at my job. This sometimes is called gross income but really is just my salary and bonus. Because of other adjustments (stock trading, real estate depreciation, etc.) I only have $90,000 of Adjusted Gross Income. This is important to remember because it is one of the numbers that is used when reporting income statistics from the federal government.

For the IRS every year, my job is to lower that $90,000 as much as legally allowed (I definitely advocate following the law, more on that later) and only pay the minimum amount of taxes I owe. I always laugh at people who complain that they are not paying enough in taxes (Warren Buffet, George Soros, Bill & Hillary Clinton, etc.). They can always not take all of the deductions and exemptions they are allowed and thereby pay more in taxes. In fact I will make them an offer. Pay me $100, I'll fill out your tax return and guarantee that you pay more in taxes. The IRS doesn't fine you if you pay too much. They only care if you pay too little.

Anyway, we'll start with assuming that I pay $8000 in morgage interest and $7000 in state and local taxes. That reduces my taxable income to $65,000. Next, I was generous and gave $10,000 to charity. Now I am at $55,000. Finally, assume I have a family of 6 (2 adults and 4 kids). This gives me $21,000 in exemptions and I now have a Taxable Income of $34,000.

Let's recap that again:
$100,000 salary
$90,000 Adjusted Gross Income
$34,000 Taxable Income

In other words, by availing myself of only the most common deductions, the USA says I only need to pay income taxes on 34% of my income. Roughly based on the current tax brackets I owe $4000 in income taxes. Not bad, only 4% of my income. Of course I paid an additional 6.35% in SS taxes and my employer matched that so I pay three times as much SS taxes as I do income taxes, right?

Wrong. $4000 is the tax liability to me. The government already took out $8000 from my paycheck so I should be getting a $4000 refund? Wrong still. We still have our credits. Since I have 4 kids that is $1000 per child. (Interestingly, each child was worth about $4000 as an exemption which in the 25% tax bracket would be the equivalent of decreasing tax liability by $1000. Doesn't that sound like double dipping to you? Well, it is and the government allows it and unless your filling out your tax return by hand, there is no way you can not get this benefit. All the tax software does it for you.)

So already, my tax credits meet by tax liability. But wait there is more. Remember the 2008 economic stimulus. Well, technically that is a tax credit for this year's taxes. However, assume my wife gave birth to a child last year. That would mean they are giving us another $300 tax credit because they didn't give it to us last year. So now, besides getting back all the income tax that was withheld, we are getting back an additional $300. So even if the government had withheld no money from my paychecks, I would still be getting a refund. And that is just with two tax credits. Imagine what my situation would be like if I qualified for more.

In spite of not paying any income taxes, I don't feel guilty. Here is why. I pay state and local taxes, I pay sales taxes, I buy from corporations who pay corporate taxes. Moreover, I pay SS & Medicare taxes. While these may be earmarked for the SS trust fund, the government (by law) borrows from this fund to support all of the spending that they do. With the way the system is structured, I believe there is no chance I will see any of that money when I retire. Also, I buy US Savings Bonds thereby keeping some of our national debt out of foreign hands. (In other words, I don't owe the government anything, they owe me whenever I cash in those bonds, thereby getting back more of my hard earned tax dollars). So, the moral of the story is that if you want to lower your taxes, get married and have lots of kids.

Taxes, Guns, & Furniture Part I

No, this is not a new federal agency under the Obama administration (although that would be humorous) this is about how screwed up our tax system is in this country and what my wife and I plan on doing to stimulate the economy. To preface this, while my wife and I didn't vote for Obama during the election, we fully agree that more spending is needed to get us out of this slump, albeit we believe it is spending by individuals that will help. Most of last year and the year before when the economy was skating on thin ice we were spending thousands of dollars to remodel our home. This is money that was staying in the USA. We were using cash, not credit so our debt load hasn't increased. Several businesses (big box and mom & pop) benefited from our spending spree. Unfortunately, our remodeling came to an end in September, and if you were following the news that is when the economy really went to the crapper. We have held off on major purchases until the new year, but seeing that the rest of America is not following our lead, we have decided we need to inject our own stimulus package into the local and national economy.

To begin with where would we get the money? While the government can print their $800+ billion and then spend it, when individuals do that they call it counterfeiting. We could go into debt and rack up a large credit card bill but that hasn't worked for the government or individuals so far. Let's face some facts, in eight years of President Bush we doubled the national debt to $10 trillion. It is very possible with all of the bailout and stimulus bills in congress that we could double that again in 4 years of Obama. So we had to get the money from somewhere.

Since it is the beginning of the year, it is tax refund time. Let me be clear about one thing. I hate tax refunds. I despise them. Getting a tax refund means that you have lent someone (in this case the government) X thousands of dollars at no interest. I'll do that for family in need but not for anyone else. That being said, there are some funny rules that almost make it inevitable that I will always get a refund. Let me go over some of these:

1) Bonus withholding - While regular income is withheld at a marginal rate based on the number of exemptions claimed and the amount of money you make, Bonuses are withheld (not taxed) at the rate of 25% (plus an additional 6.35% for payroll taxes). So even if you are in a tax bracket of 10%, your bonus is withheld at 25% necessitating a refund of the 15% the next year.

2) Social Security Cap - There is a cap on the amount of wages that you pay SS tax on. It is around $106,000. If you ever switch jobs and say one pays you $60,000 for half the year and the other pays you $60,000 for half the year, then both will take out the SS on all of your pay, necessitating a refund of the $14,000*6% that was taxed over the SS Cap.

3) Tax credits count as if you made payments. (Unlike adjustments or deductions or exemptions which only lower your total taxable income). So by having enough tax credits, you can effectively pay no income taxes (and if you are really good, they you can have enough to get the amount of your payroll taxes refunded too).

So now I have a confession to make. Ever since I started working, I have made enough money to pay income taxes (not just have them withheld). However with our current system, I have now made enough money (and have enough credits) to pay no income taxes and get back some of my payroll taxes. All of this, without the earned income tax credit.

LED Nightlights

I was excited today when I went to WalMart. They had LED nightlight bulbs for $4.96 for a pack of two. This was a great price since we go through nighlights like candy at our house. So why did I buy them? Because I wanted to become 'Green'? Not even close. I bought them because LED lights are finally econmical (at least the nightlights are). A four pack of incandecent bulbs would have cost me $2.96. They would probably last me 6 months. With a 4 watt bulb the filaments are so thin that they regularly get broken from just jostling them. The new LED bulbs are only 1.4 watts and have a plastic case (that isn't vacuum sealed) so there is no worry of breaking. Plus, they come with a lifetime warranty.

But wait, aren't they 'Green' anyway? Uh maybe. I don't care. They cost less money over their lifetime which is the driving factor for me. By buying them I feel good. They were bought at WalMart (which will help thier millions of stockholders), the bulbs were probably made in some Vietnamese sweatshop by a 10 year old girl making $2.00 a day for 12 hours of work. This is good for her too. If it weren't for WalMart, she would probably be working 16 hours a day just to get enough food for herself. Worse yet, her family might have sold her into prostitution. Not only that, but because the LED lights were cheaper (over the lifetime cost) I will now have more money to buy other 'cheap' foreign products that end up providing a better life for people here at home and abroad. I can't wait until regular LED bulbs are economical.

Now, since they are labeled as 'Green' I will have to do something to make up for it. Perhaps I can rev my engine some more at stoplights so that my carbon footprint doesn't decrease. Actually, I have several 'Green' products: rechargeable batteries, natural gas fireplace, energy star appliances, LCD monitors, Low-E windows, etc. In each and every case, I use these for economic reasons and don't give a hoot about their 'Green' attributes (although if one looks at the total resource demand of the product including manufacturing and disposal a lot of green products aren't that green, and some are downright toxic). Some 'Green' products that I don't buy are: hybrid vehicles and organic foods. In each of these cases, they don't make economic sense.