Why a Payroll Tax "Holiday" Is Such a Bad Idea

Lately you may be hearing lots of people from the Right and even some advisors to former President Clinton such as Robert Reich and Laura Tyson proposing a payroll tax holiday in order to boost hiring. I do not believe, based on the evidence I've seen, that this will have the effect they claim yet it will have severe repercussions damaging institutions that millions of Americans rely on. It is also somewhat telling that the Clinton era economists that came up with the idea of killing Glass-Steagall are the ones proposing this.

Some Quick Background

On every paycheck you receive, you will see some tax deductions: federal income tax, state income tax, maybe a municipality or county tax, Social Security and Medicare. It's those last two that make up your portion of payroll taxes also known as FICA taxes. Your employer (if you're not self employed) also pays an equal amount of Social Security and Medicare taxes for you. This adds up to 7.65% of your income below $90,000.

This money is then used to fund current beneficiaries of these systems with the promise that future workers will pay for you to collect benefits. Most years, the money being paid in is more than what is paid out to beneficiaries so the money is saved (in treasury bonds for the most part) in order to pay out in worse years. Unfortunately, as I'm sure you've heard, more workers are due to retire in the next several years than new workers entering the workforce. Also, during the current recession, more people are taking early retirement and fewer people are working, which has caused the Social Security Administration to pay out more this past year than it took in. Overall though, it is projected that the trust fund will be able to afford full benefits for at least the next 25-30 years.

Medicare on the other hand is not in quite as good a shape. Health care costs have been rising quickly and again the ratio of workforce to beneficiaries has been steadily shrinking. This has left the Medicare trust fund (PDF) at about 1/7th the size of Social Security.

What a Payroll Tax Holiday Will Mean for Business

Currently, the average worker earns about $32,000 a year which means each business pays less than $2,500 per worker per year in payroll taxes. Just to equal the salary of a minimum wage worker (a little more than $15,000 per year), it would take more than six other employees' payroll taxes. It would take 13-14 employees' payroll taxes to equal a new average worker. That new employee would also require training and time to get up to speed in the new job, not to mention any other benefits the company offers. Then in a year or so, when the "holiday" expires, that average employee will suddenly cost almost $35,000 and all the other employees start to cost $2,500 more as well.

What a Payroll Tax Holiday Will Mean for Workers

In general, most workers won't immediately notice anything. Depending on how it's done, workers may see those FICA deductions no longer in their paycheck, giving them an extra $2,500 per year, but most plans that I've heard about only discuss the holiday in terms of removing it on businesses, since the intent is to get them hiring. However, long term, workers will see significant harm. A retiree's benefits are based on how much they paid into the system and how long they paid. Remove a couple years' payments in and most workers will see a significant drop in projected benefits, ask any woman who has taken an extended maternity leave. Add this on top of the 30-50% drop most people have seen in their invested retirement funds and the drop in home values and you have a significant portion of the population unable to afford retirement, even at 70 or 75.

What a Payroll Tax Holiday Will Mean for Social Security and Medicare

Put simply, these already strained systems may collapse. Unless the funding is replaced by government spending, Medicare could lose $250-500 billion, nearly or completely bankrupting it (their current trust fund is $381 billion). Social Security has a bit more of a cushion, but it too would lose $400-800 billion. This could shave five or more years off of it's trust fund easily. If someone wanted to kill these programs, I can not think of an easier way.

What Would Most Likely Happen

I want to preface this by saying I am not an economist and have nothing on Reich or Krugman when it comes to big economic questions (I'm happy when I can keep my own budget in order). But I can look at what people have done and have been doing and put two and two together. Right now, people aren't buying: many don't have jobs, many more are afraid of losing their job and other have lost sometimes considerable wealth when their home value plummeted and credit dried up. This means companies aren't selling as many products and so don't need as many people on their factory floors or behind their cash registers. If a payroll tax comes through, companies will have more money, but they still won't be selling products and so still won't need workers. Thus, as they have already been doing, most corporations will instead pay their CEOs bonuses for "earning" the company more money and wealthy investors will get a dividend. Meanwhile, unemployment will hardly be affected and workers retirement funds will get that much smaller.

What Should Be Done

As I said above, the problem companies are facing is a demand problem. Same store sales have fallen or are flat for most retailers. Home prices are still falling. 50% more businesses rate sales as the most important problem than any other issue, including taxes. What we have is a catch-22: businesses won't hire because they aren't getting sales, consumers aren't buying because the job market is in the toilet. The thing that will get the most companies hiring again is increasing demand and the only organization willing or capable of doing so is the federal government. This has already been started and had great effect, but what was done was too small for the pit we were put in. When $2-4 trillion worth of wealth has been destroyed, spending $300 billion a year isn't going to replace the demand lost.

Obama has proposed some things that will lead to increasing demand: tax credits for business investments will get companies buying equipment (unlike employees, equipment doesn't cost more each year) increasing demand and creating jobs for equipment manufacturers. A $50 billion infrastructure investment fund, while small, will put people back to work directly and as proposed will pull in private investment, getting money moving again. Tax credits directly related to new hires are already working.

There are ways, both with targeted tax policy and direct government spending to increase hiring. The stimulus act was able to create at least three million jobs (or at least prevent people from getting fired, like police and teachers). But it can't be done with half measures by people who are afraid of a bunch of self absorbed know-nothings.

Congress, get out there and do your job. Go big or go home.

What stands between us and unity

Yesterday, my wife, son and I went to an Obama party to watch the final primary results. Originally it had been scheduled for a restaurant, but the level of response from area Obama supporters was so great, they had to move it to an art gallery at the last minute. When we got there just after six, there were easily fifty people around the room and (horrors) a giant Lou Dobbs on the projector (fortunately, the room was loud enough that his drivel was drowned out).

As the evening wore on toward the time the South Dakota primaries closed, more people crowded in. Eventually, McCain took the stage to a small smattering of "boo"s, but he was largely ignored similar to Dobbs. Every so often, the CNN delegate ticker would roll over as a new super delegate would pledge for Obama, bringing cheers from the whole room. There his counter was at 2114 when the head of the Missouri Democratic Committee took the stage. He and three other Missouri super delegates were still unpledged and had said that they would vote as a block. He told us, five minutes before the SD polls closed, that all four of them had decided to pledge their support to Obama. The applause of the couple hundred people was deafening.

With this enthusiasm we welcomed even Republican pundits calling McCain's just finished speech "the worst ever." We watched as South Dakota was projected for Clinton, but our spirits weren't dampened because we knew this nomination battle was finally won.

Then Senator Clinton took the stage. We applauded her; proud of the fight she had fought; respectful of the enormous effort that her supporters had put out for her as we had for Sen. Obama; glad to have such a strong leader on our side.

Then she began her speech: "I want to start tonight by congratulating Senator Obama and his supporters on the extraordinary race that they have run." "Uh oh," I said to my wife, "this doesn't sound too conciliatory..." In fact, to me it sounded like the sort of thing she would say to the loser of a contest. But we were still optimistic and applauded her praise of Obama.

"Nearly 18 million of you cast your votes for our campaign, carrying the popular vote with more votes than any primary candidate in history." Yup, there it was, the knife in the back. The glaringly misleading half-truth designed to divide the party. The tone in our room immediately changed. We knew that more than 18 million people also cast their vote, as best they could, for Obama. In fact, by all counts except one, Obama won more votes than any primary candidate. Even on that one in which he didn't, more people voted against Clinton than have ever voted against a primary candidate in history.

"And I am committed to uniting our party so we move forward stronger and more ready than ever to take back the White House this November." Ok, we thought, after what she has just said, how does she intend to do that?

"You know, I understand that that a lot of people are asking, 'What does Hillary want? What does she want?'" We are, Mrs. Clinton. We do want to know what you intend to gain by drawing this out with more divisive politics. What do you want?

"I want to end the war in Iraq. I want to turn this economy around. I want health care for every American. I want every child to live up to his or her God-given potential." So do we all. Work with us, help us get Barack Obama elected the next president of the United States and you will see all these things and more. "And I want the nearly 18 million Americans who voted for me to be respected. " Ah, there it is, 'I want to use those people that voted for me as bargaining chips." It couldn't have been said more clearly.

The problem with this is manifold. She herself showed in this speech that she doesn't hold respect for those voters beyond the power it will give her. She has also, with this stance shown that she does not have even that level of respect for the 18 million people who voted for someone else. And she has shown that she doesn't respect her opponent enough to even admit when he has had a clear victory. Even this morning, her communications director couldn't answer when asked whether Obama had won the majority of the delegates needed to become the nominee.

Senator Hillary Clinton, I do not know what drove you to take this stance on the day your own metrics for victory were met by your opponent. What I do know is that you threw away your best remaining chance to bring this party together, not as Clinton or Obama supporters, but as Democrats. Instead, for whatever reason, you have chosen to drive that stake into the heart of this party. You had the opportunity to leave with the strength of a leader, instead you have encouraged the idea that your due was stolen from you.

You, of all political leaders, know what this image means to so many. And yet, rather than leading your supporters past that, you chose to relish in it. You know better than most, that none of those things you hope for will be accomplished under a McCain presidency. You also know that without the support of your followers, we may be doomed to four years of McCain. But still, rather than securing a central role as a Democratic leader, you chose to hold your own party hostage.

I do know that your campaign has said you will concede the nomination this Saturday. My only hope is that such belated words will be strong enough to bring us all back together.

A Time for Unity

Yesterday, the DNC Rules and Bylaws Committee ruled on Florida and Michigan's delegations to the Democratic National Committee Convention. The final ruling gave Florida and Michigan their full delegation, but reduced each delegate's vote to 1/2. Also, in order to more fairly seat Michigan's delegation after Sen. Obama removed his name from the ballot according to his view of the oath he gave following Michigan's early primary, Hillary Clinton was given 69 delegates, and Obama was given 59. These numbers reflect not only the actual primary ballots, but also the exit polling that showed many of Obama's supporters voted for Clinton because only her name was on the ballot. This wound up giving Obama an extra 4 delegates out of Clinton's total. This was worked out as a compromise to Clinton's request that Obama receive no delegates from Michigan and the rules, as laid out last year, that no Michigan delegates would be seated.

This now gives Obama a delegate total of 2052 to Clinton's 1877, with the goal post set (firmly I hope) at 2118. Obama now needs 66 of the remaining 280 unpledged delegates (24%) and Clinton needs 241 (86%). Switching those four delegates would mean Clinton would need 239 (86%) and Obama would need 68 (24%). Unfortunately, as Sen. Clinton made clear beforehand, any seating of Michigan's delegation that gave Obama any votes would be completely unacceptable to her, and as such Harold Ickies, her representative at the meeting, has stated he will fight this ruling to the Convention.

What follows is part of a comment I left over at BAC's blog:

...[T]he votes by this committee could have no effect on [party unity], no matter how they voted. The only way we will see unity is if Sen. Clinton, and her ardent supporters, stop vilifying Sen. Obama as the devil re-incarnate and work to bring unity themselves. The people have spoken; Obama has won more states, more pledged delegates, more "super" delegates, more caucuses, more primaries, and more popular vote.

Sen. Clinton has fought an incredible campaign, but she has lost fairly. If she continues to drive wedges between her supporters and the DNC and the Democratic presidential nominee, not just women, not just Americans, but the whole world will be forced, by her, to suffer under a third George W. Bush term.

As much as we might wish (the more salient of us at least), nothing Sen. Obama could say, nor anything any of his supporters could say, can prevent Hillary Clinton from driving that wedge in if she so wishes. There is no magical speech Obama could make; sometimes the ball is just in the other person's court and there is nothing one can do about it. Insults have been bandied, feelings hurt, but we are willing to lay those aside and apologize for any we have delivered. But we cannot take that step without Sen. Clinton and her supporters.

Unity can only be brought by both sides working together.

New Hampshire Follow-up

Yeah, I know its a couple days late, but I listen to most of my news a day later, just to let it ferment a little. Congratulations to Senators Clinton and McCain. They both fought hard for their victories.

The thing that gets me about this result though, is that the pundits are all acting like it is a complete surprise. With idiotic statements like "No one predicted this would happen" it's no wonder most people would rather watch Howie Mandel smiling like a chipmunk. They themselves predicted exactly this outcome (on the Democratic side) not 10 days before. On the Republican side they were even more accurate. I too predicted exactly this (yay being vague) not 36 hours before voting started.

"Oh, but the polls didn't show this." Two problems with this: 1) Polls only reflect opinions up to the last time they were taken, they can't reflect 11th hour events, like the harsh, sexist media backlash at Hillary's emotional plea. 2) The polls weren't used properly. New Hampshire voters, if they are registered independents, can vote for either party. According to the voters themselves, independents who were Obama supporters, voted for McCain because they expected Obama would win without their vote, but they didn't want Romney to win.

Maybe pollsters need to learn a bit of physics. According to the Uncertainty Principal (sorry, I've been listening to A Brief History of Time so I have been hearing a lot about this along with a lot of other brain hurting things from Hawking), you can either know where a particle is or where it's going, never both at the same time because the act of observing changes the particle. I have the feeling polling does the same thing. You can't take a poll without affecting the data.

Anyway, to throw my hat back into the pundit ring, in South Carolina I see Obama narrowly over Clinton and Edwards (where those two wind up depends on whether or not Edwards's remark Tuesday made it down there...) and similar in Nevada (I will be better able to say something after the debate down there) with not much being decided until February 5th at the earliest. The problem with predicting this is that most Democrats I hear from would be happy with either candidate and so it comes down to last minute, "who do I like more right now?" voting.

The Republican side seems much more interesting, at least from a horse race and ideological point of view. In SC, I see Huckabee edging out McCain with Thomson finally starting to make a bit more than a half-hearted appearance (don't know if it is going to push him to a third place finish though). 9iul1an1 (Thank you Run From Fire, I hope you don't mind me borrowing this.) Will start blipping the radar, but not show much until a second or third place finish in Florida. I see McCain more likely than not winning in FL and if second goes to Huckabee, it will be a very interesting following couple weeks afterwards. What I see the Republican race boiling down to are conservative centrists coalescing around the McCain/9iul1an1 side of the party and the evangelical populists around Huckabee. The way this turns out could redefine the Republican party (or at least finish defining it) or possibly even lead to a cromulent third party.

Politicians losing direction

Many of you have already heard about John Edwards's recent attack against Hillary. Hillary Clinton, in a town hall meeting Monday, was asked how she keeps going with all of the pressures of the campaign. Her response was "It's not easy." and went on to "tear up" (she appeared to get emotional, but I wouldn't so far as most media outlets are classifying it - you be the judge). Edwards, for no reason I can fathom, decided to attack this moment, to his apparent great detriment (current primary results at 8 PM CST have him with about 17%).

This sort of thing is exactly the sort of politics we need to move away from. Petty attacks, especially against the way someone makes and emotional plea, is guaranteed to turn more people away from you than encourage them to vote for you. What strikes me even more is that Edwards himself uses such emotional pleas in his campaign. Any time he evokes his father's life, or random middle class person he too gets emotional. This isn't a sign of weakness, it is often used to be a sign of connection to the subject you are talking about.

Unfortunately, in Hillary's response to the question she decided she should do similar attacks against her opponents, instead of answering the question. I have yet to see her talk about her position directly, at least in the past couple months, she only talks about what she thinks her opponents aren't.

Please people, give me something to vote FOR. I have enough things to vote against, and all the Democratic candidates share my views on these things, to one degree or another.

Debate roundup

Well, the debates were yesterday and boy, what difference you can see in the parties. Completely ignoring Regan's "11th commandment" never to attack a fellow Republican, the candidates were constantly throwing little jabs at each other (or full bitch slaps to Romney on a regular basis). Ron Paul of course took the second hardest hits, barely being allowed to explain his point.

They also showed very effectively how little they know about what is going on. All of them (except for Ron Paul) said we have the best medical system in the world, completely ignoring and actual facts. Ron Paul at least admitted there was a problem, but his solution of letting the market handle the problems ignores the fact that the market has been in control of the problem and it doesn't work. The problem with letting the market control things is that the market is only worried about making money. If you don't have money to be taken, the market will ignore you and you won't be able to get health care.

The Democrats were almost a complete inverse. I wasn't able to watch the entire exchange (bedtime for the little one often interferes with these things...). They were often much more on topic, and there were many fewer snarky comments against each other (I don't remember either, but I wasn't there the whole time). My biggest complaint was that the moderators didn't ask the same questions of the Democrats as they asked of the Republicans. We already know what the candidates think of the war in Iraq; it is repeated back to us on a regular basis. The best question asked of the Republicans was, oddly enough, asked by President Bush. "What would be the underpinning of -- of -- of your decisions?" Huckabee, being the only Republican that actually answered the question, gave the reason that question matters: "because [policies] can change with each generation, with each year, with each circumstances . . . What is it that's deep inside of us that -- that guide us, that direct us, that show the framework of what we're going to do." I know what policies the Democrats (and Republicans) are pushing (largely), what I want to know is how the candidates view the world as this will show how the candidate will handle things that come up unexpectedly. Obama I feel I understand after reading his memior, but not so much the others.

Instead, Gibson took the easy way out. He focused on the things we have heard over and over: Iraq, nuclear terrorists (currently completely irrelevant and for which there is only one response), and a question that started out looking like a domestic policy question and instead changed into a question about change, which we hear about constantly in this campaign. That last question showed a very sharp divide between Obama/Edwards and Clinton/Richardson. Obama and Edwards view change as a change in the political process and the reduction of the lobbyists' power in Washington. Clinton views change as a different person and gender in the White House. Richardson, from how I understand his quote, doesn't think change can happen at all...

All told, I don't believe these debates will have changed much, especially on the Democrat side. On the Republican side of things, Huckabee continued to do well and may have strengthened his position in New Hampshire while Romney continues to fade. My personal prediction for the primary is a much tighter race between Obama and Clinton - it has been much too close to call for a while and I can't tell what, if anything, Edwards's move yesterday to support Obama against Clinton will do. On the Republican side, I'm pretty sure McCain is going to come in first, and a tight race for second between Romney and Huckabee, either way, Romney probably won't last much longer.

Transcripts are available on the New York Times website - Republican/Democrat.(free registration or bug-me-not may be required)

Congratulatons

The caucuses are done and it's on to New Hampshire. Congratulations to Barack Obama on the victory, but the biggest news, in my opinion, is the turn out of the youth vote. This is what the country as a whole needs. Hopefully, the result of this caucus will encourage young people in every state to vote, both in their primaries and in the general election. In the past, people my age and younger didn't vote, I believe (from personal experience) because we were largely ignored in both the polling and the final result.

Strength in (lack of) Numbers

So, it's been a year now with the Democrats in power and many of you are wondering where the change is. We are still stuck endlessly in Iraq. A large number of children will soon fall off the rolls of SCHIP and lose their only access to health care that doesn't come by trading electricity for HMO coverage. The few things that made it out of the House of Representatives have quickly disappeared, never to be heard from again. Meanwhile Bush & Co. are sitting (not quite) contentedly getting the funding they request only cut by 50-60%.

It all comes down to one word that the Republicans of a year and a half ago wanted to strike from the lexicon of the Congress. Something they swore was horrible and obstructionist and that no Senator should stoop to. It is also something the Democrats were going to fight to their death to protect. Something so vital to them that they couldn't imagine a Congress without it.

That word: filibuster. From the American Heritage Dictionary "The use of obstructionist tactics, especially prolonged speechmaking, for the purpose of delaying legislative action." This act, available only to senators, requires 60 votes to override and bring a piece of legislation to be voted on. Back in the good old days of Mr. Smith Goes to Washington a senator would actually have to speak for as long as he wanted the filibuster to last. Now, a senator merely has to say he is filibustering the bill to get a vote (call a Cloture vote) and if the vote fails, the Senate just moves on to more important things, like non-binding resolutions...

And do you know what I say about all of this? It's a damn good thing the filibuster exists. Without it, my generation would have lost the safety net that is Social Security. We would have @$$4073s like Bolton as our representative in the UN getting us nowhere (I know he made it there anyway, but everyone in the UN knew he was a fraud at least). And I can't remember what other idiotic things Bush tried to push through Congress but failed because of that minority.

There is also the power one man wields over all of this, and the real cause of the deadlock now going on in Congress. That is the power of the veto. This lets the president throw out bills he doesn't like unless Congress can override him with a 2/3 vote. Thats 218 votes in the House, and a mere 67 votes in the Senate. Only 7 more than what is needed for cloture, but apparently a very difficult 7 to get. This would be great when used to keep oppressive or bad legislation out. It is a very important check on Congressional power. Unfortunately, this time, it was put in the hands of a d1ck who has nothing to lose. He may be a lame duck in that he can't get any new legislation passed to help him (at least nothing he can't convince a large enough portion of the American public is important...), but he can stop anything he wants with impunity.

Normally, this would be where bi-partisanship and negotiation would take over. But if there is one thing this president has shown us, it's that playing the public for fools and making them think that there are only two ways to do something ("My way or no way" isn't it?) has worked to keep that from happening. This is both the strength and the weakness of a liberal majority: liberals are willing to work with other people to push toward some greater good. Bush has shown in numerous business and political ventures that he will do it only his way, and stick his fingers in his ears screaming "LA, LA, LA" as loud as he can when anyone asks him to do anything different.

Now I hear many of you screaming, "Well, if Bush is doing all of this horrible stuff, just impeach him!" This would be great, he hasn't done anything explicitly defined in the Constitution, but so many of the things he has done could definitely be put under "other high crimes" as the clause goes. But, there's a slight problem. Back in the 2006 elections, the Republicans, knowing they wouldn't have much of a chance, pulled a fast one on the Democrats without them quite noticing. Many Republicans in border line states prognosticated and said things along the lines of "If you vote for a Democrat, nothing will get done and all they will do is start endless hearings." The Democratic candidates were quick to counter "That's not what we will do; we have our first hundred days planned out. We are going to make this country better." Unfortunately, the first 100 days are quickly forgotten 600 days later... If they start serious impeachment proceedings against the president now, they won't be able to end by Nov. 4 because guess what ugly number springs up again: 2/3. To impeach a government official, you need two things: a simple majority vote in the House of Representatives; this labels the president officially "impeached" (bonus points for those who know which two (and only two) presidents have been thusly labeled). Then it is tried in the Senate (by the Chief Justice) and falls to a 2/3 majority vote. If you can't get 67 senators to say that children deserve health care, I doubt you will get more than 50 to say yes on an impeachment vote.

And what happens after the Congress fails to even get this done? The Republicans come back to their home districts and say "See! I told you they were do nothing Democrats!" and it's twelve more years of them being in the majority... I find it sad to say this, but with the cards we are dealt right now, we need the Democrats to continue with (most of) what they are doing. Keep fighting for good legislation, let Bush veto it, and throw something else at him. If you can show the Republicans are being obstructionist, and throw their own dirt back at them, we have a good chance of the Democrats picking up a few more seats.

Then it will be time for some real third (fourth and fifth?) party candidates to push forward with agendas Americans really want.

When is 70 billion not enough but 35 billion too much?

When the 70 is to fund the thing killing more than 100 soldiers a month and the 35 is to provide health care for children that can't see a doctor...

Currently Congress is working on a federal budget. This is the annual budget that is going to fund pretty much all of government, except for the military and a few other things. The Pentagon gets funding through a separate budget process. However, Bush has requested $200 billion of extra funding to pour into Iraq.

Now, you and I know the Democrats aren't going to give in to such a foolish demand. Schumer, Polosi, Reed and all the rest told us they wouldn't give Bush any more blank checks for this war. They even said they would make sure we got out of there as soon as possible (some of them).

But surprise, according to CNN the Democrats are close to a deal that would give him only $70 billion for the next six months. They are trying to claim that this is some sort of victory; that giving him more than $200 from every man, woman and child living in the United States at this moment, and six months from now (not to mention just six months ago...) give him more. This is money that is sending our troops into a country we never should have entered in the first place. It has killed almost four thousand American troops and injured almost thirty thousand, devastating countless families.

And what do they call this gutless capitulation? "[A] partial victory." Why you might ask? Because "Bush is likely to get far less money than he originally requested." I'm sure Bush counts only seventy billion as a failure. I'm sure he will turn around and pull us out of Iraq now. You are sure showing him the bravery that the electorate was hoping for after hearing your promises of no new funding for the war. I mean, whats the difference between no new funding and 70 billion dollars, its nothing compared to the difference between 70 and 200 billion. Surely the voters won't notice.

And do you know the worst part? They are probably right. Most of us only have the choice between someone who will write a 200 billion dollar check that my three year old will need to pay off when he is 10 or a 70 billion dollar one. If there were one good alternative per district, you wouldn't see this crap. Even if these alternatives were in just half, maybe even in just a third of the country we might see change. But right now, it's a handicapped horse race. These two parties, who act so set against one another, are far less worried about disappointing their electorate than they are about saying no to a man that less than 35% of the population cares for.

To get to the second half of my headline, Bush has once more vetoed the SCHIP bill, saying it will be too expensive and its not the right thing for America. This bill that is too expensive is $35 billion for five years of funding, just 1.75% of his Iraq request. Just going by the numbers, this means that allowing 818 American soldiers (the six month average) to die is more than 57 times more worthwhile than helping an extra 4 million children who can't afford health care. That equation doesn't look good from any angle. And this doesn't even bring into account the potential wounded or the Iraqi civilian deaths and injuries.

Democrats, get some balls. Help our troops come home, or rather most of them - I'm not one of those who believe we can pull out completely, maybe I'll get into that soon. And you Republicans, tell this president that the children of this country do matter as more than just future cannon fodder for the war you're planning with Iran; get them the health care they need.

The mortgage crisis, part 2 - Fraud

I already talked about how the Fed is thinking about lowering interest rates Tuesday to help the markets out during this credit crunch brought on by the mortgage lenders. GMB over at I can't believe it's not a democracy! pointed me to this article in the San Fransisco Chronicle about possible reasons for the new "freeze" being proposed. In it the author proposes that the agreement was agreed on to give the mortgage industry time to hide the fraud that is one of the root causes of this problem. I can only speak anecdotally about the subject, but I don't believe the fraud was as rampant as the reporter is claiming.

Don't get me wrong. There was a large amount of fraud happening. Everything from appraisers being paid to give good assessments to websites offering to sell you a paycheck stub (halfway down the page) to inflate your income. There was also the slightly more creative fraud in how these mortgages were presented to the borrowers - "Oh, don't worry about the balloon rate, by the time that kicks in you could sell your house and move in to one twice as big." (never mind the fact that the rate jumps just six months after you sign the paperwork...) However I don't believe, as the article's author said "I assure you it was a minority of borrowers whose loans didn't involve fraud."

Nothing was ever presented to us that would lead me to believe there was any fraud in our house purchase twelve months ago. Our income was just enough to afford this house (although we were told we could technically, according to their math, afford one 10% more expensive, which is shifty salesmanship and probably where a lot of borrowers were mislead), but we never caught wind that there might be a way to "boost" our income. It also just happened that the year after we bought our house it was due for a county re-assessment, and while our lender's assessment was higher than the county assessment (by about 5%) it was not significant and the county assessment was almost exactly what we paid.

Like I said though, this is all anecdotal and just one family's experience in the relatively stable mid-west. Your mileage may vary. I don't think though, that this rate freeze would work as a panacea to escape the fraud issue. There are a few issues that the article brought up, but didn't point out all the implications. First, and this was not brought up, much of the sub-prime lending was done through mortgage brokers and other third party institutions, which is where most of this fraud would have taken place. These people find the borrowers (often through agreements with real-estate agents), sucker them in with promises like what I described above, and then within days of closing on the mortgage sell it to a bank or other large institution, and never worry about it again. These people, currently, are getting off scott free, except for the fact that their business is drying up. Don't get me wrong, not all of them were bad. In fact, the one we finally went through was very helpful and upfront with us, and not pushy about how much to borrow.

The other problem is that these mortgages are only having their rates frozen, and just for five years. I don't know for sure about most of you, but my wages haven't increased significantly (outside of getting a new job) in the last five years, and according to the government, average wages for working class Americans has barely kept pace with inflation. This means that the five year freeze is just a gamble that the same thing won't happen again then, or maybe not a gamble, maybe Bush just doesn't want this to be as easy to stick to him...

Related to that is the fact that house values aren't likely, as of now, to appreciate significantly over this time frame either. Houses still aren't getting sold now, and people are still finding it harder to get financing to buy houses. It's so bad for one seller near me that they are advertising the price on the for sale sign. And like I said before, a drop in rates won't help most buyers because the banks are still more wary about lending.

He also, in the article, mentions that the FHA is being brought in to help some borrowers (the ones that won't get the freeze) to refinance. He says this is so that "[t]hey could say, 'Fraud? What fraud?! You knew the borrower's real income and asset information later when he refinanced!'" The problem though is that these borrowers would need to get approved for this new financing. This just won't happen in most of these cases as their houses clearly aren't worth as much now as when they bought it, even six months previously, and many won't be able to afford a standard FHA rate, which is why they got the ARM in the first place.

A little of column A, but also some of column B

BAC over at Yikes pointed me to this:

During a Press Club event David Gregory, of NBC News, complained about the polarized nature of politics and how it affects them. When asked later by Hellen Thomas who he thought caused the polarization, he blamed it largely on the internet and the bloggers. While the soapbox nature of blogging does contribute to this problem, it was not the originator, and definitely not the only, and probably not the greatest contributor to the problem.

The polarization first started long before the internet became popular. Rush Limbaugh has not changed his format since he started up in 1988. Bill Clinton wasn't attacked time and again by bloggers. The Christian Right wasn't started by bloggers. George W. Bush is not, to my knowledge, a blogger. Fox News, Rupert Murdoch and the like were not, until recently, bloggers. Rove didn't use the internet originally. Michael Moore's primary medium isn't the internet.

What caused the polarized nature of politics today is the way the media classifies everything as a black or white issue where only one party can be right. It doesn't want to make its viewers think by explaining what each side is saying and what the truth is, it just wants to sell you a pack of Bud, a Happy Meal, and get you to watch the next show. When you are given only the back and forth and not any of the facts that the different sides are both manipulating, people are left to figure out what is true on their own. They will then side with whichever one they are already a part of, and since they are never given a real consensus on the facts, they can always shelter in their own world.

Blogs just allow this to continue. Many blogs, especially political blogs, are used, as I described above, as a soap box. The problem is that everyone has a soap box and few people get off long enough to look for whats really going on. They change from being a way to share your ideas to a way to reinforce your narrow view. I hope to go outside of that on this blog. I will attempt to research, and give you access to my research, my topics (when its not a pure opinion piece). I also ask that, if I am wrong, that you, my readers, show me where I went wrong and help me correct it.

So, David Gregory, you are not correct about where it started, you would have been right, though, to have said that the internet magnifies it.

I am not a criminal

And my government shouldn't treat me like one

I suffer from allergies. Not just the seasonal, don't play in cut grass/ragweed/etc. allergies. The year round, I must be allergic to oxygen allergies. (Or as a former co-worker in a hospital once told me, I must be allergic to work). Sudafed has, until recently, been one of my very close friends. Back in 2005 the Missouri legislature took any drug containing pseudoephedrine off the shelves and required that anyone purchasing the products to present a state ID. They did this because pseudoephedrine is one of the ingredients in meth, a very addictive drug that does horrible things to people. Two years later and we still have a serious meth problem, and its been spreading.

Now, I know the government has the right to control access to dangerous drugs. And meth is definitely a dangerous drug (people who are on it will ignore everything else just to stay on it, including children, themselves, and their houses, which often burn down in the process of making the drug if the maker is not careful). But pseudoephedrine is not a dangerous drug. In fact it can be one of the only drugs that can help some allergy sufferers like myself. I am not going to use the drug to make another one, I have a perfectly good use for it as it is. I should not have to give my personal information away to some random desk clerk, who in turn gives it to every law enforcement organization that asks for it. My information is not for you to mine.

For the first year and change, I suffered through allergy attacks relying on Benedryl and hoping I didn't have to drive much while on it (great at bedtime though...). This spring I decided that I wouldn't make the rest of my family suffer with me and went down to the local Walgreens to get some Sudafed. Unsurprisingly, I got tons of dirty looks from the pharmacy techs for buying this and grumbling about having to give my information. They probably sent my information to the FBI immediately just for that... The next time we ran out (several months later as I buy the biggest pack possible and ration myself so I don't have to go through that often) my wife got it for me because she knows how I feel. I had to go again today and get it, and again with the dirty looks.

If this system worked, I might have some sympathy for it. It still restricts my rights, but compared to the general benefits it could have brought about ... oh, who am I kidding, people are so desperate to escape this reality that they will drink even fermented deer's blood. Let me live my life peacefully and find a better, more targeted way of stopping meth production. You don't have to worry about me misusing it.

Amendment IV

The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no warrants shall issue, but upon probable cause, supported by oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.

Now, I know this whole Constitution thing has already been sent through the shredder a couple times in the past 7 years (well, and before that too, but I'm not going to go into it right now), but this is becoming ridiculous. The government has been saying for a long time that internet communications should have no expectation of privacy. This case is being fought currently in the federal courts to determine that fact for sure.

The way I see it. Anything I post on a bulletin board, blog, forum, or any other publicly read webpage is fair game. Read it all you want, thats why I put it there. If it is sent in a "private" email however, I expect it to be treated the same as any snail mail envelope. You can read who its from and who it is to, but without a court's approval, you should not be allowed to read the contents.

The government argues, however, that email, for the most part, is sent as plain text and that if they look at the full packet, they didn't really open it... Personally I believe that the headers constitute the envelope and the content is inside it, but if thats the way you want to play it, I am not waiting for a court to give the government a blank check. I have just recently downloaded and installed GNU Privacy Guard on my system. I already had Thunderbird (a great mail client, for anyone out there looking for one, a good replacement for Outlook or hopping between web mail clients). I also downloaded the engimail extension for Thunderbird. Now all of my email is signed (so no one can mess with it and anyone can tell I sent it), and if anyone wants to send me their public key (see sidebar links for more information on what these are and for my public key) I will send them only encrypted emails. Trianglman is the address, gmail is the domain.

Protect your rights. Demand that the Constitution be upheld. Don't sell your rights for a false sense of safety.

Those who would sacrifice their liberty for security deserve neither and will lose both.

Poli from the Latin means many, tics - little blood sucking insects

Figured I might as well start here (whats the worst that can happen?). Like I have said before I consider myself a proud liberal. However, I believe this word/label is over-used and no longer means what it is used to mean. I personally believe that the word should take from its Latin root - Liber. Thus I believe that a true liberal believes in their core in freedom. I also think that in order to allow such freedom, one must keep an open mind about other's beliefs.

If I say that I have the right to live my life as I choose, who am I to tell someone else how to live. Unfortunately, many who wear the liberal label these days, or are given it, are not willing to do that. This makes them fanatics, not liberals, no matter what causes they are fanatical about. As Nietzsche said "He who fights with monsters might take care lest he thereby become a monster."

I believe, however, that with freedom comes responsibility, and this is where government comes in. Unfortunately, it is the (apparent) nature of man that when presented with total freedom, what emerges is anarchy. Society cannot survive true freedom. Thus rules and laws are put in place which, if done properly, curtail some freedoms, but enhance the lives of all. I believe that a government is the right entity to create and enforce these laws, not for authoritarian reasons, but to protect the members of the society. This is why I believe the government's sole purpose should be protection of its citizens, both from outside dangers and from one another. Anything else the government does should be in support of these two goals.

This means that I think the government has the right to impose taxes. It has the right to engage in diplomacy with other societies/governments. It has the right to create a military. It has the right to create statutes prohibiting harm between members of its society. It has the right to try and prosecute those who break those statutes. These are the only reasons for it to exist.

It does not, however, have the right to restrain society members' rights unless the exercise of those rights infringe on someone else's rights. This is where the real trickiness comes in. A good pair of examples of this are the current debates over gay marriage and public smoking bans.

In the gay marriage debate, I believe that government oversteps its bounds when it says two people who love each other cannot be allowed to take care of one another just because they happen to share the same sex. One's ability to sign a contract saying they will take care of another, in sickness and health and everything else has no bearing, whatsoever, on anyone else's ability to do the same for someone else. I view civil marriage, which is all the government should be dealing with, as a legal contract between two people. Religions can ban gay marriage all they like; that doesn't remove a person's rights.

Public smoking bans, however, are a different beast entirely. I believe that the government does have the right to institute these. This is because when you smoke in a public space, you are, according to a large body of scientific evidence (and personal experience), causing others harm. Smoking where it is not going to cause innocent bystanders harm is your own prerogative; I think you should be able to do most anything you like to yourself. But when you involve others, unwillingly, in your personal choice, to their detriment, it infringes on their rights and government has the duty to say whose right takes precedence.

This is only scratching the surface, but I think I have bored you enough.

Hello

It is generally agreed that "Hello" is an appropriate greeting because if you entered a room and said "Goodbye," it could confuse a lot of people

Welcome to the dusty corners of my brain. I am a mid/upper 20s programmer from the Midwest. Born and raised a Catholic, I am now an agnostic Taoist. Politically, I am a liberal (from the Latin liber – free), which includes an open mind for other ways of doing things.

My Family

I consider myself to be a very lucky man. I have a beautiful wife that I love more than anything. She is my better half. Our three year old son is one of the sweetest kids I have seen. And, if I do say so myself, he is brilliant. He started wanting to use my laptop before he was one. He became obsessed with Windows Media Player and iTunes by the time he was 18 months (he loved the visualizations, "flowers" as he called it). He now knows more about how to use them than I do. He knows how to read about 100 words, not just through memorization of the books.

Me

As I said before, I am a programmer. I'm not just a programmer for a job, I enjoy it. If I am not reading, playing with my son, or playing a game, I'm likely hacking some small project together, studying a new programming language (how I met my wife), or reading up about other technologies. I believe in open source, although I am torn philosophically between free as in beer and free as in speech. I am a Linux user by choice and a Windows user by necessity; I don't use Macs for a number of reasons, which my wife harangues me about regularly...

My Blog

I have a number of reasons for starting this blog. A large part of it is peer pressure. Almost everyone I know is a blogger now. My wife has been doing it well (and much better than I'm sure I will) for a while now. Many of my friends have blogs. And most of the people I admire in the industry do as well. I also just need a place to rant sometimes and let other shoot me down and show me where I am being an idiot. I also try to keep up to date on what is happening in the world and sometimes I find something that needs to be echoed far and wide and I just don't have the vocal cords for that.

I want this blog to be an open place for people to talk. Like I said before, I try to be open minded. If you think what I am saying is wrong, please shoot me down and show me your point of view. My opinion is based on the knowledge I have; if you have better information, I will appreciate being enlightened. But please keep it civil. Too often these days what once could be civil discussions break down to "You're just a right-wing nut job/war mongerer/etc." "You're just a leftist snob/You hate our country/etc." That's not what this blog is for.