Episode-331- Listener Questions for 12-07-09 — 5 Comments

  1. So what about taxing those who heat with wood, oil , gas? I bet that is next.
    Great show.. Climate gate.. put Al Gore in Jail.

  2. Jack,

    Thanks for your work on the Survival Podcast. I particularly appreciate your notion of “everyday preparedness,” rather than an excessive focus on low-probability, high-impact events.

    Kudos on a nice economic analysis of cap and trade. It will be interesting to see what happens.

    I think your answer to whether massive inflation helps a debtor was mostly correct, but I’d suggest clarifying your explanation a bit. One of the first things economics teaches is that inflation is the debtor’s friend (and saver’s enemy).

    You said that “money is harder to make.” It may seem that way from the reports we hear about unemployment, but it’s not actually the case for anyone who is employed and has seen their wages rise with inflation over the years. If I borrowed a fixed amount in 1980, and my wages have increased since then due to inflation, I am actually better off repaying 1980 dollars with 2009 dollars. Put another way, a widget that cost $10,000 in 1980 would cost about $25,800 in 2008. Because each 2008 dollar is worth less, it would be to my benefit to have obtained the widget in 1980 for $10,000, and repay that dollar-for-dollar with a 2008 salary. (For the sake of simplicity, this analysis obviously excludes the cost of any interest).

    I am not necessarily advocating that people take on debt, only that people understand how economics and inflation affect your borrowing and saving decisions.

    Thanks again for your great work.

  3. @Tom,

    Problem is the factors you are leaving out.

    One most shit from 1980 is absolutely worthless today, other then real property. Hence your time line is to long for anything other then a mortgage. As debt on real property is the only debt I advocate I guess that one has to get left out right? So any other consumer crap you bought in 1980 is hopefully paid off by 85 when it is in most cases already at end of life.

    Two you are not using the recent ten years, wages fell between 99-09. Not just unemployment but the wages of the employed.

    Third go ahead use your time line from 1980 again, tell me how many hours did the average worker put in in 1980, how many do they put in today. As I said the money is harder to make, no harder to find.

    The problem with you view is it is the exact one conveyed by most advisers, it isn’t wong really, it just isn’t right either because it doesn’t apply to the lives of most individuals that they serve. A person with a multi millon dollar income an utilize these concepts because of the volume of leverage and because they can afford to pay quality people to time the actions and make sure they occur. The average person is only misled by this shit, carried into a life time of debt and then faces number four in the reality of the time line you leave out.

    Four 1980 was 20 years ago if you were say 35 then buying shit with debt and continued to live this concept up till now you are now 55. A wonderful age when you don’t get to retire and people stop wanting you. I can’t tell you how many 55-65 year old people I have met doing jobs like security guard, night watchmen, pulling cable and other low paying jobs. My reaction to these people when I was very young and arrogant was, “what losers still doing shit jobs at 55”, three such men worked for me when I was 22 and contracting at Lockheed. I was the lead tech out there and made a shit wage of 13.50 an hour. Each of these men was older then my father, reported to me and made less than me.

    The education from them was priceless, all 3 in their past had very successful careers, were downsized, put out to pasture early, etc. They all had the type of success in their past I was working for in my future. Now you tell me their 1994 wages were “better” then their 1974 wages. I realized in that early time of my life that career and wage success were very temporary things, you could use them but you had better have an exit strategy and be out of the system where others control your income very early in life.

    The inflation favors the debtor formula to a degree is true but acting on it ensures a life of misery and slavery for many and often is what forces our older men and women to work for young arrogant punks like a 22 year old Jack Spirko that makes the current version look like a very humble man,


  4. I know this is a late comment, but I listen on podcast :).

    The most damaging part of Cap and Tax is actually the unnecessary and artificial burden it puts on our economy.

    They may very well reduce the cap to the degree that it becomes difficult for things like coal fired power generation to run. At first it will probably only bring prices up a bit. That’s all well and good for awhile. However, as soon as you get a hot summer in the northeast, where it’s mostly coal fired generation (And I believe you emit more carbon per MW at that time too), those emissions credits are going to start getting expensive as the coal gens start trying to out bid each other to buy them.

    Or maybe they invest early in sequestration technology, and THAT drives up the cost per MW. It really doesn’t matter, cap and trade introduces artificial inefficiencies and will drive up energy prices, and that’s always bad for economies.

    Now add in to that it’s absolutely useless to sequester carbon and it just gets ridiculous.

    Tin foil hat time:
    You know, I got to thinking about it a little more. The govt basically get’s a dial for how many tax dollars they take in. -IF- there is a percentage based tax on these, say 5%, then all congress has to do is vote to decrease the quota and the value goes up, people start trading them because there is a new number and tax dollars start flowing in. Hell, they could increase the number of permits and ppl would trade them and dollars would roll in.

    That’s only if there is that % based tax per tonne, but interesting thought.

  5. I, too got a couple days behind, and just caught up to today’s show. As far as the listener questions, I have remarks on almost all of them, but I don’t want to write a book! So, just a couple comments:

    @credit cards-if you do business online, you are still advocating debit cards over credit cards, right? I’ve had trouble twice with debit cards, but not with a credit card. If you have a significant amount in your bank account, it can go away real quickly, let me tell you. With a credit card [assuming you use physically use it and pay it all off monthly], you at least wouldn’t be losing funds, and then have to fight to get them back.

    @cartridges- great topic, I’d like to see a whole program on it. Advantages and disadvantages of various ones, which ones are “the same” [5.56 and 223?], [308 and nato?], the ones with all the “sweet spot” like the Swedish Mauser