Monday, August 20, 2012

We own a home

A year and a half ago I wrote a blog post called The Lenten Season of My Life. The main point was summarized by the one sentence - "I feel like my life is now focused on what I do not have and what has been given up." Now looking back I am happy to report that we can cross one thing off the list because as of Friday M and I are officially home owners. It might have taken a little bit longer than expected, but in the end everything worked out. We got a home that I absolutely in love with and while I might not want to do the previous 9 months again it was a good experience. M's mother welcomed us into her home and I am extremely grateful for the hospitality.

Now instead of looking backward or only at the near future, we are able to really look at things years down the road. We have a house. We have the neighborhood. We have the mortgage payments. It is something we have prepared for mentally and financially since early on in our relationship, and the plans are coming to fruition. This entire weekend I walked around with a smile on my face because of all the great things that have happened and how pleased I am with the house.

I will have more to write (and talk) about with the house in the future, but here are some pictures.

The POD after 9 months. Somewhat surprisingly everything seemed to be there and in working order.

Right after closing

Our living room.

The wine/liquor rack

Thursday, August 16, 2012

Income distribution by state

I've spent time looking over and analyzing the tax policies of both parties. There should be a way of figuring out what is the most fair and hopefully best for the country. Is the top marginal tax rate too low? Should capital gains and dividends be taxed as ordinary income? Should there be another *level in addition to short term and long term capital gains?

*I like the idea of "longer" term capital gains tax. If you hold a stock for 5+ years then you pay only 5% in capital gains. Something like that.

I spend time thinking about this because there are good things the public sector can do that the private sector won't do. I thinking improving the roads, police force, public schools, healthcare, etc are all worthy causes. These things cost money and even though nobody really likes paying taxes they are necessary.

The debate between both parties seems to be settled except that Obama wants the Bush tax cuts to expire for the wealthy. You would think this would upset people making a lot of money. Now who makes this money? Where do they live? Who do they vote for? I combined the 2008 electoral map with the census data of income by state to come up with the following facts.
  • The average (not weighted) income for a state that voted for Obama was $54,219. The states that McCain carried averaged $45,484.
  • The % of the electorate that made $200,000 or more was 4.4% in Obama's states and 2.8% in McCain's states.
  • The % of the electorate that made under $25,000 was 23.2% in Obama's states and 28% in McCain's states.
  • There are more households making under $25,000 a year (28M) than those that make over $100,000 (22M). (That isn't a political point, but more something that just surprised me)  
Anyway, I don't know why I care. 1) I won't really be able to affect this policy. 2) Why should I be upset that poor states (the bottom 9 states in % of population under $25k voted for McCain) continually vote for a party that doesn't seem to care about them? Does anyone else notice that out of the 22 states that had less than national average (24%) of population making under $25k there are only 3 (Wyoming, Utah and Alaska) that voted for McCain? These are facts that I probably shouldn't be thinking about the day before I close on my home.

Sunday, August 12, 2012

Deferred Payment

Someone always has to pay. When you go to war and don't plan a way of paying for it (ex. LBJ and W) then it gets added to the national debt. When you drastically cut tax rates and increase defense spending (ex. Reagan) then it shouldn't be a big surprise when the national debt increases by 189% during your 8 years. When you have a system where every patient has to be admitted to a hospital regardless of their ability to pay then you shouldn't be surprised when health care costs are a large % of the national budget.

Tough decisions have to be made or at least recognized. Politicians on both sides annoy me to no end by talking about how this simple thing will make things completely better. If you elect Mitt Romney he will no longer demonize success in business and by doing just that he will grow the economy. Does anyone really believe that? Does anyone really believe that Paul Ryan's Path to Prosperity can really keep spending at 20% just by saying it will keep spending to 20%.

Unless you come up with truly new, efficient ways of controlling certain costs then you really just shifting the cost from one entity to another. Giving people health care vouchers doesn't really decreases health care spending, but really just means that once the vouchers are up the individual will have to pay for something that the government is paying for now. The really tough decisions are ones like this - is it more important for me to pay a long term capital gains tax of 15% or to let a poor family go hungry because spending on food stamps were cut? If someone doesn't have the money, the insurance and/or the vouchers than do we just let that person die if they are in critical condition? 

Those are tough decisions to make if you are completely strict on controlling costs, refusing to increase revenue and also want to balance the budget. No politician will make that decision. Paul Ryan is suggesting something that would probably scare 75% of Americans if they truly understood the consequences of what he is proposing. Someone has to pay and just shifting the cost from the public sector to the private sector doesn't solve that issue.

My final criticism is an idea that has angered me the more I think about it. When I read that 62% of Paul Ryan's cuts would fall on low income households it makes me a little concerned. I don't mean to be a socialist, but I would rather err on the side of caution in protecting the poor than the rich. The rich do not need the government's help. Mitt Romney will be fine whether he pays 14% in taxes (last year) or 35% (Obama's proposal). Poor people on the other hand do need the help. Sure some of it might be wasted and the idea of someone living off welfare instead of getting a job goes against the American Dream. Still I would much rather have the government try to solve the issues of hunger (food stamps), education (pell grants, public schools), and healthcare for the poor than in trying to address a non-existent "class warfare" issue that so troubles the rich. From a strictly economics side the money invested in poor people is likely spent immediately and spent in the local economy. I doubt many lower income households will be spending their money on a lavish trip to London. However, it goes farther than a strictly economics side, and from a pure humanity side of things I would rather live in a country that helps out the poor than the rich.

Monday, August 6, 2012

Politics (random thoughts on the financial side of things)

Why are politics such a difficult discussion topic? It seems like whenever a presidential election is coming up people draw sides and stick to their respective corners. I was born and raised in one of the most conservative states, lived in the only state that didn't vote for Reagan in 1984 and now currently live in the biggest projected swing state of the 2012 election. I can't say that I've seen it all, but I have certainly been introduced to many different viewpoints. And I'm afraid that in my effort to find out why people think a certain way I've offended people by questioning their entrenched ideas of what is right and wrong.

I tend to lean a certain way (if you know me at all), but I like to believe that I reached that conclusion through independent analysis and reflection. My parents aren't very political (or at least it wasn't obvious to me growing up), and until the 2004 election I never really cared who won or lost. After that each election has been a big deal. Maybe it shouldn't be such a big deal since things don't really seem to change that much regardless of who is elected president (my one very political friend thinks the Presidential election is extremely overrated compared to the US congressional elections), but I really tend to judge the country on who they put in the highest office.

Anyway, I've tried to do as much analysis on the overall trends of certain presidents. I've looked at the top marginal tax rate, the national debt by year and the overall 2012 budget proposal by President Obama.  From that I've reached a few conclusions:
  1. If the national debt is an issue then any chance of a balanced budget needs to include an increase in revenue and a decrease in spending. Nobody is suggesting we go back to a top marginal tax rate of 92% (1953), but can we all calm down about possibly increasing the rate to 39.6% (the Clinton years). 39.6% isn't socialism unless you believe that we have been a socialist country since 1932.
  2. From a spending side there is also zero chance of having a balanced budget without cuts in some of the "sacred cows" of social security, defense and medicare/medicaid. The total deficit planned for 2012 was $901B, which is more than the non-defense discretionary spending of $568B. 
  3. I will bet anyone whatever money they want that neither Obama nor Romney will have a balanced budget in the next 4 years. 
  4. Any unique proposals (like Simpson-Bowles) should be considered. Increasing the top marginal tax rate (and the top marginal tax level), getting rid of the mortgage interest tax deduction (among other deductions) and decreasing defense spending shouldn't automatically be off the table.
I think we can improve things with an increase in information. Just like the gay marriage debate has been extremely uplifting (my opinion is that we have made an incredible amount of progress in a short amount of time) I think the facebook/twitter/etc world will make these discussion easier. With more information and exposure should come a better debate. This hasn't happened so far since both sides seem to camp out on their MSNBC/Fox News side right now, but I really believe that is going to change. People growing up now seem to be more cynical about the information given to them, which seems to make them more independent in their thinking. If those people stay independent then they will hopefully do their own research instead of focusing in on the talking points from both sides. From that my hope is that people will make their own decisions based on this research instead of just what their parents or community thinks. For example if they come to the conclusion that the 2nd amendment predicted and protected assault weapons then go ahead and vote Republican. And if maybe their research comes to the conclusion that Democrats are actually much better at managing the budget then they will vote Democrat. 

I really don't mind if someone votes Democrat or Republican as long as they understand what they are voting for and have reached that conclusion on their own. I've gone over my reasons for voting for Obama, but one of the main reasons I won't even consider Romney is because of the lack of information coming from this side. I've tried to follow his campaign by reading magazines (Time), newspapers (NY Times, Columbus Dispatch), anything online (Yahoo news, and by visiting his website. The lack of details are stunning. He talks like a machine version of a Republican candidate. He seems to be extremely afraid of sharing his opinions on anything more than "Obama sucks." From that he doesn't seem to giving independents a viable option to vote for instead of Obama, which makes it seem unlikely that Romney will win this year. Maybe I am wrong and this election will be more of a referendum on Obama than a vote in confidence of Romney? I thought that way in the 2004 election and was proven wrong, so this time around I am feeling fairly confident that Obama will win.

Friday, August 3, 2012

The Mall(s) of America

I've never been that big of a shopper. When I was a kid my Mom always joked about how I had about a 30 minute window at a mall before I was ready to leave. It must be a little ironic now that as a non-shopper one of my job's main functions is traveling to different Victoria's Secret stores. From my count I've now been to 59 (I might be missing a couple) stores in cities like Miami, New York City, Chicago, Detroit, Dallas and Myrtle Beach. This past month I was actually only in Columbus for 15 of the 31 days because I was traveling the rest of the time.

From this I've started to notice the differences in malls and shopping centers. I can pick out the similarities, the differences and the types of malls by a quick glance around. Maybe this doesn't seem too impressive to the general public, but for me it really is something I never would have expected. For me growing up malls were just malls. I never gave much thought to Northpark being that much different than any other malls in the country. I know now how ridiculous that statement is, but at the time I just never really thought of other malls being different from my *local mall.

*You know the saying "all politics is local." Well, there is probably even more truth to "all malls are local." During some of my store visits I end up going to malls that are various friends and coworkers former local malls and whenever I bring that up I am guaranteed to get a spirited conversation.One coworker and I talked for a good 20 minutes about her local mall and why it was superior to the mall just 3 miles down the street.

Anyway, I've developed certain criteria to judge malls and also since it is my normal lunch spot now how to handle the food court dilemma. (Order - 1. Local speciality option, 2. Chick-Fil-A, 3. food court Japanese.) It is actually a lot more exciting than I ever thought it would be. I'm starting to understand the passion certain people have for retail, and that makes my job that much easier. I can't say that I've completely reach the point where *Confucius would be proud of me, but I'm getting closer.

"Choose a job you love, and you will never have to work a day in your life."