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.
Friday, January 30, 2009
Thursday, January 29, 2009
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!
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!
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.
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.
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.
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.
Thursday, June 5, 2008
Is it Time to Buy a Car Yet?
I have always wondered when it is economical for me to buy a new car. With the internet and home computers, I can do far more research and calculations than my father or grandfather were able to do at my age. The car that I currently drive is 15 years old. Technology has improved over the last 15 years and with gas prices at all time highs I thought it would be beneficial to put together a spreadsheet and determine what made sense dollar wise.
An engineer's favorite tool is the spreadsheet. It is not as elegant as a custom designed program, but can be created a lot quicker. I have made spreadsheets for everything, including finding out which insurance plan my company was offering would be the least expensive. So to start out my spreadsheet I needed to have an idea of what I was going to compare.
My baseline would be my current car. A 93 Dodge Intrepid. It is all paid for, and gets about 20 mpg. I drive it to work and not much else so I only put about 5000 miles on it a year now. However, to make it more conservative (since all of the newer models get higher gas mileage) I chose to use 9000 miles per year as my baseline.
Next I needed to choose what car to buy. While I could always look for the smallest car available and make the comparison uneven, I chose the Honda Civic. It is a smaller than the Intrepid, but works for my needs without being a spit dropping on the road. I selected 3 options from Edmunds.com: a 01 Honda Civic EX ($8600, 29MPG), a 08 Honda Civic EX ($18000, 31MPG) and a 08 Honda Civic Hybrid ($22,600, 43MPG).
I also decided to do a hypothetical analysis with the Chevy Volt. I assumed that it would cost $30000 and get 150 MPG equivalent (this is based on charging the car at night rather than running on the engine/generator in the car). I have not been much of a fan of hybrid cars because the initial cost outweighs the marginal increase in MPG. However, the Volt is configured more like a locomotive. The engine only operates the generator (thus allowing peak efficiency) to charge the batteries, which in turn provide power to the electric motors that run the wheels. Running just the engine (and not plugging it in) would equate to 50 MPG.
Several costs and variables go into the calculation, so I'll detail those here.
Cost of gas: This is a variable that can change pretty unpredictably. I used $3.50 constant for the entire 15 year analysis. Some may argue that this is too low. However, historically, this may be too high (just 10 years ago in 1998 I bought gas for 68 cents in Missouri). Gas is anywhere from 7% (Chevy Volt) to 35% (93 Dodge Intrepid) of the total cost of the vehicle. In the end, the price you predict for gas 5, 10, or 15 years from now is just a guess.
Financing rate: More than likely you are going to have some interest rate on your financing. The 0% gimmicks usually don't apply to used cars or cars that are in demand. I chose 5% over a 5 year loan. This might be a stretch for a used car, but should be reasonable for a new car.
Credit Card Interest rate: If you are someone who charges everything and then lets it sit on the card, you are paying interest on it. One way of figuring this is if you pay off something over two years, then the effective interest rate is the rate on your card (17%). Myself, I may charge it but I pay my bill each month so my interest rate is 0%.
Down payment: This is how much you pay up front.
Resale value: I assumed that the new car was worth 60% after 5 years, the hybrid and volt were 65% after 5 years and the used car was 50% after 5 years. I have seen some info that hybrids are maintaining their value better than comparable gas only cars. For the 10 year and 15 year I used 50% and 15% of their 5 year resale value for all cars.
Maintenance Costs: This is another guesstimate although there is a lot of data available on Edmunds.com that you could use. A couple of things to keep in mind. As cars age, they require more maintenance. Also, maintenance costs go up with inflation each year. My current car I started at $1500 a year and increased it by $300 a year until it was at $3200 and then kept it level (at that point I would buy a new car anyway). The used Honda I started at $1000 and increased it by $250 a year until it was at $3200. For the new cars, I started them at $350 and increased it by $50 a year for the first 5 years. Then I jumped to $1000 and increased by $250 a year until it reached $3200.
Insurance/Taxes/Other: I elected not to include these because they don't contribute a significant percentage to the overall cost and they vary little between the vehicles in my area.
Inflation: Any cost analysis over time needs to normalize the numbers for inflation or they aren't comparing the same thing. In other words, a $1000 outlay now is more than a $1000 outlay 10 years from now ($1000 vs $737 at 3% inflation). I used a constant 3% inflation in my calculation.
After all of this, I assumed that I sold the car after 5 , 10, or 15 years and calculated the cost in comparison to my current vehicle. The table below is the results of the total 2008 dollars spent and the ratio with the current vehicle.
93 Dodge Intrepid | 01 Honda Civic EX | 08 Honda Civic EX | 08 Honda Civic Hybrid | Chevy Volt | |
Total Present Cost After Resale -5 Year | $17,231 | $17,856 | $17,276 | $17,579 | $18,869 |
1.00 | 1.04 | 1.00 | 1.02 | 1.06 | |
Total Present Cost After Resale -10 Year | $36,107 | $35,091 | $31,790 | $32,838 | $34,435 |
1.00 | 0.97 | 0.88 | 0.91 | 0.98 | |
Total Present Cost After Resale -15 Year | $52,273 | $49,434 | $47,020 | $48,150 | $49,304 |
1.00 | 0.95 | 0.90 | 0.92 | 1.00 |
I found the results rather interesting. For my situation, keeping my current car running over the next 5 years is the cheapest option (but only by 4% max -- the Volt isn't available for me to buy). This was what I suspected, although the minor cost difference was unexpected, I was estimating more like 10%.
Over the long run, buying the new gasoline Honda Civic is cheapest. Again, not by much though. This was unexpected, my previous thoughts were that the used car would be less expensive.
Finally, one last conclusion from this data is that cost ratio peaks at around 10 years for new cars. So it appears that it is advantageous to buy a new car every ten years. Unless I overestimated the maintenance expenses for the used cars. A couple of years with much lower expenses and the difference disappears.
For the Hybrid to be the least cost, all other assumptions staying the same. I would have to be driving 15000 miles or more a year. For the Volt to be the cheapest, it would have to have a price of $26000 or less. So, what I decided from this is I will probably keep my old car running for another few years and then buy a new (or nearly new) gasoline car. By that time the Volt should be on the market and I can analyze it better for its overall value.
Wednesday, May 28, 2008
The Andromeda Strain (2008) Review
I watched the A&E remake of the Andromeda Strain the last two nights. At the end of the first night, I was actually excited that they would stay true (mostly) to the book and just have an updated version of the novel. By a half hour into the second night, I knew that I was going to be sorely disappointed. Once the "solution" was found and delivered, I was about to start wretching in my throat.
The first thing that caught my wife's attention was "Why do they always have hot scientists?" Well, Hollywood seems to believe that if you don't have sex in the movie then no one will watch it. I'll admit, the eye candy is nice, but in this movie completely unnecessary. To begin, the book had all of the major characters as male (related to the odd-man hypothesis). The 1971 version threw in a female, but she was frumpy so might as well have been a male. Next, I am amazed that Hollywood seems to portray all world reknowned scientists as 30 something. Let's be honest. We have had some young geniuses (Einstein was well known in his 20s). However, there are a lot more old scientists that would be better choices academically to study in the underground laboratory.
The first thing that caught my wife's attention was "Why do they always have hot scientists?" Well, Hollywood seems to believe that if you don't have sex in the movie then no one will watch it. I'll admit, the eye candy is nice, but in this movie completely unnecessary. To begin, the book had all of the major characters as male (related to the odd-man hypothesis). The 1971 version threw in a female, but she was frumpy so might as well have been a male. Next, I am amazed that Hollywood seems to portray all world reknowned scientists as 30 something. Let's be honest. We have had some young geniuses (Einstein was well known in his 20s). However, there are a lot more old scientists that would be better choices academically to study in the underground laboratory.
The cocaine snorting reporter confused me. I guess it was a plot choice to introduce some conflict. However, if we aren't going to allow smoking cigarettes in movies (or make the R), then why bother showing him snorting cocaine or the hippie girl smoking pot. It added nothing to the storyline, and only made a minor appearance that ended up not being a conflict at all (the Colonel was going to kill him no matter what). And how does an unarmed, handcuffed, druggie (who isn't currently high) overwhelm a fully armed, battle dressed (including kevlar helmet) soldier just by letting off the fire extinguisher and then hitting him a couple of times. Has someone done any experiments on stomping on the valve of a fire extinguisher and it coming off? I don't think it would happen from the first stomp (especially given his limited range of motion).
Hollywood is in love with nuclear reactors (even though they want to shut them all down). The computer diagrams of the laboratory showed the reactor offset from the main maintenance shaft of the compound. However, at the end when they entered the maintenance shaft, it sure looked like the familiar blue glow of irradiated fuel to me. Unfortunately, they don't go into a lot of details as to the workings of their reactor. They do say it will give you a dose of 5000-8000 rem (I think they mean dose rate 5000-8000 rem/hr). But they don't say at what distance this is. When the two people fall in they are dead within 5 minutes. Given that the lethal dose of 1000 rem will still take 24 -72 hours to kill you. We'll assume that they recieved a dose 10 times that in 5 minutes. That is approximately 100,000 rem/hr dose rate at the top of the cooling pool. Assuming Dr. Stone is 30 ft up, his dose rate would be 1000 rem/hr. So he probably got 100 rem for all the time he spent in the shaft. More than likely, that would put him in the hospital for a few days. I sure hope that all of the equipment has been radiation hardened, or we have some electronics primed for malfunction.
But, if we look closely, we could see that the water in the pool was bubbling. So maybe the people got cooked rather than dying of radiation. This then begs the question of how someone could stand in a boiling pool of water and not have a natural reaction to flinch. Of course if the pool was boiling, then the entire maintenance shaft would be filled with steam, and moisture would be condensing on all of the components, which eventually would reach 200 degrees fahrenheit and you wouldn't be able to grab on to anything. To say nothing of what your lungs would look like after breathing steam saturated air at 200 degrees.
How the reactor produces power is a mystery. Typically a boiling water reactor or a pressurized water reactor are at a much higher pressure than atmosphere (1000 psi-2000 psi vs 14 psi). Since the reactor appears to be at the bottom of a pool it is probably more similar to a research reactor that is found at many universities. Unfortunately, these tend to be a lot smaller (0.5 - 2 MW thermal) compared to a naval or power reactor (200 - 4500 MW thermal). Oh yeah, and they don't produce electricity. My guess, since they never talked about generators or steam turbines is that it is using thermovoltaics (like solar cells, except they convert heat into electricity). The problem with this is that since the reactor isn't pressurized, its not going to have a high temperature, therefore, the efficiency of the system will be extremely low. Also, since thermovoltaics involve high temperatures, we have to magically assume we have found a low temperature thermovoltaic material.
All of this is completely unneccessary as Crichton gave a perfectly good scenario for the odd-man (who doesn't need to die) climbing up the shaft which is guarded by dart guns (to get escaped animals). The woozy odd-man (having been hit with multiple darts) makes his way to the terminal and stops the detonation before passing out.
Finally, after all the Greenpeace propoganda, bashing of the oil industry, and moral dilemmas of the President we find the solution. A bacteria that lives in the thermal vents of the ocean floor and feeds on sulfur (which is the base component of Andromeda). Where do we begin to pick this apart?
First, the premise is that civilization has killed off this bacteria in the future because of our rape of natural resources on the ocean floor. Therefore, there is no cure for Andromeda in the future. (The Law of Unintended Consequences). They send Andromeda back to us through a worm hole with the clue to killing it (how they figured out how to kill it without the bacteria is unknown). The scientists do ask the question of what affect this bacteria would have on humans. The answer: none that we have found. Based on this we are going to pump thousands of gallons of an organism that lives on the ocean floor onto the surface of the earth. Isn't that the same short sighted thinking that supposedly got our civilization into this mess in the future to begin with. Did anyone bother to think about the onion crop (yes, sulfur is found in the foods we eat), how the bacteria might disrupt it (flavorless balls of skin), and the implications to the larger society (no more tex-mex, riots at Taco Bell)?
Personnally, I like Crichton's solution much better: We don't find out where it comes from and it naturally floats back up to the upper atmosphere, having mutated into a benign form (for now). I know it doesn't wrap up all of the loose ends, and we don't look like heroes at the end, but guess what. Sometimes we don't find the answer, no matter how much money (and hot scientists) we throw at things. The good thing about Crichton's ending is that we could have another encounter with Andromeda again (i.e. more money at the box office).
Second, the dispersion of the bacteria. It is grown in some big biologic reactors (beer making machines) and then pumped into some helicopters for dispersal. This is going to be fun. I wanted to calculate how much stuff they would need. To begin, the area they were spraying had to be large (the red andromeda was shown moving at a fairly good clip at the end). I made a conservative estimate of 50 miles by 50 miles (the town where the sheriff killed himself was 40 miles outside of the quarantine area). This gives a total area of 6.4 billion sq meters. I estimated coverage at 1 liter per 1000 sq meters (that is the equivalent of 2 drops per sq foot). This means they need 6.4 million liters. Assuming each tank was 50000 liters, they would need 128 of them (more than what was portrayed in the movie, but doable).
I assumed the helicopters to disperse the bacteria were Hueys. They have a payload capacity of 2000 kg (or 2000 liters). According to the movie, they were able to disperse all of this within 5 hours. A total of 3200 trips would be needed to disperse the 6.4 million gallons. If I assume that each trip takes 30 minutes, then 400 helicopters would be needed. I highly doubt that the US has 400 Hueys equipped with crop dusters.
If we change the numbers to be more realistic, the results become laughable. At 100 x 100 sq miles area, 4 drops per sq foot, 20 helicopters available, and 60 minutes a trip, they would need 1500+ biologic reactors and 106 days to cover everything. By that time, andromeda would have spread around the world and annihilated everything. Its a good thing Hollywood can bend the rules at will.
Wednesday, February 13, 2008
Mormons and Evangelicals
Block voting has interested me a lot this election season. Particularly of interest is Romney’s support from Mormons (historically, an extremely conservative voting bloc) and Huckabee’s support of Evangelicals (historically, a relatively conservative voting bloc). In order to do a theoretical analysis, I used data from two sources.
First, for historical election and 2008 primary voting data I used Dave Leip’s Atlas of U.S. Presidential Elections at http://www.uselectionatlas.org/. This website is great in giving enormous amounts of data about past and current elections.
Second, for the religious data I used numbers from the Association of Religious Data Archive at http://www.thearda.com/. An issue does arise in looking at these two blocks of voters. Namely, Mormons are a well defined religious denomination. There is very little debate about who is a Mormon. Evangelicals on the other hand are not a defined religious denomination but a subset of Christianity that includes members of several denominations (although not necessarily entire denominations). Therefore defining who is an Evangelical poses a problem. The ARDA takes a denominational approach.
I wanted to determine answers to a few questions. 1) What are the voting habits of the block in comparison to the rest of the population? 2) What influence does the block have on the outcome of the election? 3) Was Romney’s support primarily because of the Mormon factor?
To begin I chose one heavily Mormon state (Utah – 66.45%) and two Evangelical states (Alabama – 40.59% and Oklahoma – 41.49%) to develop a baseline. Arkansas has a higher percentage of Evangelicals, however since it was the home state of Huckabee I elected to exclude it. Some may argue that based on this I should exclude Utah (since Romney lived there while running the Olympics), unfortunately, there isn’t another state that is as heavily Mormon (Idaho is next with 24.07%).
For each state, I determined what the non-block vote would theoretically be by assuming that the states bordering them would vote similar to the non-block population. Admittedly, this is more accurate for the Mormon block since the states surrounding Utah have a much smaller non-Mormon population. The states surrounding Alabama and Oklahoma have less of an Evangelical population, but still a significant percentage of Evangelicals.
I used Presidential election returns from 2000 and 2004 to develop a baseline. The non-block vote (Other) was compared with the Total returns for those years to obtain the block vote that would result in those returns.
Mormon Voting | ||||
R | D | VAP | REG | |
Utah - Other | 58.04% | 38.70% | 55.32% | 75.81% |
Utah - Total | 69.18% | 26.17% | 54.25% | 70.60% |
Utah - Mormon | 74.81% | 19.84% | 53.71% | 67.97% |
Evangelical Voting - Alabama | ||||
R | D | VAP | REG | |
Alabama - Other | 56.33% | 41.89% | 50.58% | 66.05% |
Alabama - Total | 59.46% | 39.22% | 52.90% | 69.30% |
Alabama - Evangelical | 64.05% | 35.30% | 56.30% | 74.06% |
Evangelical Voting - Oklahoma | ||||
R | D | VAP | REG | |
Oklahoma - Other | 56.33% | 41.89% | 50.58% | 66.05% |
Oklahoma - Total | 62.94% | 36.43% | 51.90% | 61.80% |
Oklahoma - Evangelical | 72.26% | 28.73% | 53.76% | 55.81% |
R is the percent that voted for the Republican Candidate, D is the percent that voted for the Democratic Candidate, VAP is the percent of the voting age population who voted, and REG is the percent of registered voters who voted.
From these numbers, I conclude that Mormons are slightly more conservative than Evangelicals as a whole, but that they are also slightly less likely to vote than non-Mormons.
With this information I looked at the 2008 primary returns for Utah, Alabama, and Oklahoma. I ran various scenarios of support for Romney and Huckabee with differing amounts of the block turnout. The following is what I found:
1) Even if Mormons turned out in massive numbers in Utah (90% to 10%) and supported Romney by a substantial margin (95%), for Romney to win 90% of the vote, he still would need 56% support from non-Mormons. This was echoed in the CNN exit poll.
2) With 60% Evangelical turnout (as in Iowa) and 50% of Evangelicals supporting Huckabee (as in Iowa), Huckabee would need the support of 26% of the other voters in Alabama and 9% of the other voters in Oklahoma to match his returns there.
From this then I can conclude a few things. Romney’s support is not primarily based on Mormon voters. There are enough non-Mormon voters to have given him the win in Utah, and there aren’t enough Mormon voters in other states to explain the support in other states (this is further supported by exit polls which show that Romney did have the support of a significant amount of Evangelicals and Catholics). Huckabee on the other hand had a majority of his support from Evangelicals, although exit polls do show that he did get support from other block groups. This is also evident from his wins in the South, Kansas, and Iowa which had significant Evangelical turnout according to exit polls.
One thing I have seen often mentioned on the blogs is the Mormon vote in states outside of Utah (particularly Nevada, Colorado, Wyoming, California, and Florida). So I decided to create a swing factor which is a product of the % registered to vote, the percent of dominant political party, and the percent of the block in the state.
State | % Mormon | Swing Factor |
Utah | 66.45% | 33.79% |
Idaho | 24.07% | 12.24% |
Wyoming | 9.54% | 4.85% |
Nevada | 5.85% | 2.98% |
Colorado | 2.15% | 1.09% |
California | 1.56% | 0.79% |
Florida | 0.47% | 0.24% |
An election would need to have a margin less than the Swing Factor for the block to have any real political clout. All of the primary/caucus margins were greater than the swing factor for these states; so, in essence, the Mormon vote (as a block) was not a deciding factor in any primary/caucus. There simply are not enough Mormons in other states even if we assume they are all Republican and that they all show up to vote to influence the elections by themselves. An interesting note, with the Florida swing factor of 0.24%, this means that during the 2000 election, there was enough Mormon clout to swing the election to Gore. However, based on the fact that Utah (ergo Mormons) overwhelmingly voted for Bush in that year, that would have been a near impossibility (besides if Mormons were for Gore, then Utah would have voted for Gore and the whole Florida mess would have been moot).
Subscribe to:
Posts (Atom)