DISQUS

I agree - our system is hosed. But it's not the fact that insurance costs are out of line - it's because our health industry is screwed up! (Not that I like insurance companies by the way.

It perplexes me that people talk about "insurance" as the issue. It's the cost of care that's the issue. My son was in the hospital for an infection. Nearly $100k. But with insurance, $0! Oh, by the way, the "negotiated cost" between the insurance company and the hospital (I say "hospital" when I really mean hospital+doctors+medications+procedures+godknowswhatotherbloodsuckingpigs) was less than $10k. How does that work?

If I didn't have insurance, I'm bankrupt. If I do have insurance, my costs are a fraction of what they are for a person who cannot afford insurance! Perverse?

On to the main point - the stimulus provision for the COBRA subsidy is a god-send for literally millions of "laid-off" workers. Without it, we would have to settle for working at a job that wasn't our first, fifth, or even tenth choice (I'm talking fast food for a lot of former bankers and accountant types).

I agree with plonkee. When people lose their jobs, a few tend to return to where they had their last success. For many people, especially people in their 20s, they return to school.

And don't forget that the Enron, WorldComm, and [insert crappy company here] scandals, which pointed lots of fingers at Accounting and Auditing firms, only made those industries stronger. This calamity will do the same.

Congress will over-react and put a lot more regulations in place. Smart folks with accounting and auditing backgrounds will be in greater demand than ever, just to "watch over the hen house."

It may be painful to get an MBA, but it will pay off, especially since it seems everybody nowadays has a college degree.

One more thing: Do you read andrewtobias.com? I think you'd like what he has to say about personal finance, the economy, politics, and social issues.

Steve, this is a reply to your reply and also a comment on a later post you made about this -- the securities we're talking about aren't fairly-valued. They're priced far lower than a rational market would value them. Therefore, IF the market returns to sanity (and I think it will and I think it will much more quickly with a government instilling confidence in the economy and financial system), the government limited its downside risk by buying the securities at a depressed price. Therefore, it's sort of boosted the risk-reward equation over to the reward side.

It's apparent that you're skeptical of the administration. So am I. I've been VERY vocal about that (read my Rants blog). They're careless, at best, reckless at worst.

However, I'd begin to listen to people like Bernanke (even though I think he missed the party on this), who's academic career encompassed studying the cause, effect, and solutions of and to the Great Depression. He's finally seen the light. And I think he's terribly afraid of how clearly bright that light is!

I HOPE I'm wrong. I REALLY don't want to say "I told you so." Because I have a lot of money in this market, too. I'm just like everyone else here: I work, pay my bills, and count on my investments to fund my retirement. Those 3 things are in jeopardy right now.

I agree with you about priorities: Healthcare, education, and energy reform would all be worthwhile endeavors, along with tax reform and government spending reform.

But the point that a LOT of people miss is this: Without this "bailout," none of this matters.

People certainly can disagree, but I think they're wrong. Just look at how the market reacted to this. EVERY money manager I've seen interviewed or quoted is for this, in some form or another.

The reason: The government has done a poor job instilling confidence and TRUST in the financial industry. I just wonder when there will be a full-fledged run on the Bank of the US (i.e., the Treasury), when every foreign entity cashed out of their US-backed bonds. Interest rates will skyrocket and the Fed will have to PAY people to buy bonds (negative interest rate). It's not unlike what's going on now; it'll just be far more severe.

This is NOT a BAIL OUT of financial institutions. This is saving a patient whose arm has been severed from bleeding to death. We can worry about the arm later. Let's keep the patient alive to live another day.

Wow, those are startling statistics (did you know that 82.7 percent of all statistics are made up? I made that up)! My wife and I, too, read to our very young children, and have done so since before they were born. I guess we like to read and want to inspire the same in our kids.

Here's something I haven't seen -- attend a community college for the first two years. You automatically save about half. Then, apply to whatever college you want along with scholarships and whatnot. You'll have had two more years to save and figure out what you like (which can still change, of course), but you'll get a great education (smaller class sizes, professors who aren't in the business of writing books, etc.) and you'll still be able to say that you graduated from Harvard (or wherever).

All of the comments above are valid. It all boils down to what you believe is "fair." Sure, corporations are treated like individuals in the sense that they are afforded certain provisions (like bankruptcy, individual indemnity from lawsuits against the corporation, etc.) but they truly aren't people.

People should pay taxes. People run corporations. The best way that people would pay their "fair share" is through a national sales tax: Generally speaking, the more you consume, the more you pay in taxes. There could (should) be provisions in there that say milk gets taxed at 2% but yachts at 35%. You could make a non-regressive/progressive tax out of an income-neutral tax. It would be all about consumption.

(I hate double taxation. It affects each one of us every day. To buy a TV, for example, you pay tax on the income you made to buy it in the first place and you pay sales tax. OR, you pay an income tax on the dividend and/or capital gain you made on an investment, then you pay a sales tax. Furthermore, the company you work for or invested in has presumably been taxed on any income it derived from doing business.)

If you don't have any employment income but you're able to buy yachts and planes, you'll pay your fair share in taxes (i.e., your source of funds comes through passive or investment income). If you're rich, but don't work (inheritance?), and you spend little money, you pay less in taxes.

You'll still pay a good sum -- after all, your need for food, shelter, and clothing will always exist, and with those necessities come goods and services that you have to buy -- and best of all, you can't cheat the system.

Okay, you can cheat the system by participating in the black market. But that's against the law and nobody would do that, right? :)

I don't remember where I read it, but it goes something like this:

Want to earn six figures blogging?
Step 1: Find a job that pays six figures
Step 2: Blog at work

I think a lot of people are doing this!

As the economy worsens (or at least our collective outlook), it's difficult to not fall into the trap of "I'm going to be laid off, so I'll goof off at work," but it may be the goofing off at work that gets you fired!

Now may be the time to jump off the corporate ladder OR really dive in and be better than your peers. It just might save your job.

As in everything, it's a personal choice. You made some great points in this post.

Great post! I think you hit on what's wrong with America's version of capitalism. In a true capitalist society, there would be many competitors vying for your business; however, in many industries, especially where heavy infrastructure is involved, there are two, or at most, three competitors even willing to provide you with a service.

Oh, they'll sell you a service, but they often won't deliver.

For industries like telecommunications (energy is another), it might not be a bad idea for the government to fund the build out, and let service providers compete to provide the content and delivery. Then, there might be dozens upon dozens of competitors begging for your business.

Competition breeds innovation, efficiency, and, most of all, excellent customer service. If you cannot provide those things and I have viable alternatives, I walk next door to your competition and sign right up. In this case, there would be no riff-raff, either, about having to "re-connect" or set up my service: It's already on. Billing would simply have to be switched.

It would seem to me that we have to do "all of the above" to improve our lot. People all too often focus on the "one best solution" when there are multiple "good solutions." Some of the solutions we can try are good in the short-term but not so good in the medium- to long-term. Conversely, some of our possible solutions have great long-term prospects but poor short-term prospects.

We need a sensible energy policy. Right now, we have NO energy policy, unless you count the one Cheney and "Kenny Boy" Lay put together to gouge us in the first place.

And don't say it didn't happen. How can it be possible that costs to the "oil companies" like Exxon and Chevron rise, yet they make HUGE (bigger than ever) profits, all the while saying they're just passing on the costs to poor little American consumers.

It also doesn't help that the value of the dollar has eroded precipitously (don't forget, oil -- at least from OPEC -- is denominated in US dollars. Value of dollar goes down, price of oil, by definition, goes up).

Why has the dollar eroded? Many reasons, but when this has happened in the past, you can bet your bottom dollar (pun intended) that the US government put some pressure on some countries to de-value their own currency.

Bottom line: We need a government to provide incentives (not give-aways, per se) to businesses to supply more energy -- in various forms -- and to individuals to demand less. This policy needs to be comprehensive, covering tax breaks, rebates, negotiations with other countries, deals made with innovators. The works.

And don't get me started on giving money to state sponsors of terror, who then use our money to kill us on our own soil. That ought to be enough to have gotten us a LOT farther down the road of energy independence.

DAMN, we've had 7 years and WE HAVE DONE NOTHING.

Nice summary of how to calculate investment returns.

@four pillars: I think you're right. There may be a double whammy, too: American company stocks rise as the economy begins to turn around (stock market is a leading indicator) AND the dollar rises, giving foreign investors more of their own currency when they "cash out."

Could be the best deal on the planet. Provided, of course, that our government doesn't screw it all up (that's a big IF)

Read this post! It's about the banks, the economy, and YOU! Don't make the situation worse by pulling your money out of the bank!

Steve, I hear ya on the kids and work thing. It's terribly difficult to work from home with little ones. You're constantly aware of how much effort they are and how tired your wife is from lack of sleep, recovery, etc.

It's so refreshing to "go back to work" so you can relax a little and still feel good about it because you're contributing to your family's well-being.

Best of luck to you. I think you'll beat that 2017 goal by a lot.

Great post, Steve!

Steve,

Love this post! It's amazing how many of our lives have similarities. For example, you say to move to a place with good schools. I live in the bay area in California, where the good schools are in the richest neighborhoods, so I'd have to move out of the whole area. I'm thinking Washington or Oregon. Home values haven't gone completely nuts there yet.

My wife and I just had our second child, another boy, so we have saved a bit on clothing. And they will be able to share a room. But it's tough having the second child and NOT have one of you (you or your spouse) stay home. The daycare we provide our first child is expensive. Adding our second would be cost-prohibitive. But one salary where I live is ridiculously hard to make stretch; I, too, am exploring ways not only to save, but to earn. Multiple streams of income, I think you called it wealthstreaming, is a prudent thing to do in today's society.

It's akin to NOT putting all your eggs in one basket.

Keep up the great work. I really enjoy your point of view.

Great concept, though I don't like the name. Wealth, to me, implies net worth, which is great, but what you're talking about is multiple streams of income, right?

Incomestreaming? Earnstreaming? Revenuestreaming? Now that sounds like a winner to me...

Congratulations! You'll be fine. You found out the first time around that the 2nd brick (as well as the first, of course) is survivable -- you did it!

Speaking from experience (my wife and I have two boys, one 2 1/2 year old, the other is 7 months old), the second baby is easier. That's the good news.

The bad news is, the first one becomes more difficult! When my wife was pregnant with our youngest boy, a friend with two small children of his own, calmly told me,

"It's not twice as hard. It's more like 4 times!"

I will never forget that! You won't either.

Best of luck to you and the family.