Episode-645- Listener Feedback 4-18-11 — 36 Comments

  1. Jack, the first caller Tom might be able to solve his waterproofing issue by other means. Does he have gutters and downspouts on the house? Can he install a swale or bury a drain pipe in a gravel trench to direct the water away?

  2. i think chocolate milk in schools is fine. i wouldnt get too upset about it. chocolate milk, big deal, let the kids enjoy something at school.

    • @womule, it isn’t the point is it? The point is the school says a parent doesn’t have the right and the intellegence to send their kids to school with a “healthy meal”, they then turn around and give them sugar laden milk and call it “healthy”.

  3. I was just wondering the other day the question asked today about “how does Jack find time to fit everything in?” The show, the book, the research, getting sponsors, running the MSB, sorting the e-mails, youtube videos, the garden. To say nothing of your family, pets, hobbies and of course: moving house!

    I loved the shows over the last week. They’ve been very intimate, like sitting down with an old friend and hearing about the details of a hectic part of their life.

    Good luck finishing the move.

    P.S. Jamie Oliver used to be a slightly annoying TV chef. But he’s won a huge amount of acclaim in this country for drawing people’s attention to how much garbage was being served in our schools. Good to see he’s doing good work over there too.

  4. If chocolate milk were the only crappy item on the school lunch trays, it wouldn’t be such a big deal.

    When I was teaching, I cringed as I watched my students come to the table with hamburgers, fries, a canned veggie that was so gross and mushy that no one would touch it and who cares b/c it probably had no nutrition left anyway, mostly fake milk and a sugary dessert.

    I have to say that at least, a few yrs ago, Dallas ISD started to offer fresh fruits/veggies and a little less fried junk.

    I had one girl one yr who would never eat anything from her tray except the fruit. I never forced her to try anything else, like other teachers would. I figured she was eating the healthiest of any of her peers. Smart 5-yr-old.

  5. Jack, you said you didn’t understand why people even bother to pick up COBRA after a job loss/resignation when it would be cheaper to go out and get individual insurance.

    By picking up COBRA, they are able to maintain the exact same coverage they’ve enjoyed all this time, including coverage of any recently-developed ailments/disabilities that cropped up during their tennure at that prior job. But if they dump their old insurance and go for a new private policy, the new policy will most likely deny them coverage on any “pre-existing conditions” of those ailments/disabilities that cropped up during their tennure that that job. If cancer or heart disease is one of those ailments, you better believe they’re going to do the COBRA.

  6. @Oil Lady

    Sorry wrong! If you leave a job and replace your job provided insurance with private insurance you CAN NOT be turned down for pre existing conditions. It is exactly the same as COBRA, the rates of COBRA are insane, as one who fired my fair share of people and did the severance thing with them I can tell you that the rates are terrible.

    You can always replace one plan with another and get all previously covered conditions covered.

  7. RE: Mandatory annuity participation as a future aspect/requirement of Social Security

    Jack, I must concur.

    I used to administer 401(k) plans. And the standard choices available to most people upon retirement for how they might like to take their 401(k) payout include:

    1) Lump sum distribution
    2) Rollover
    3) Annuity

    While I was never allowed by my company to actively discourage the annuity choice, I (as did just about all of my colleagues) always did my best to steer people away from it. Annuities LOOK like an awesome deal, and on paper and in a perfect world they are. But in the real world there are two suck-factors to annuities that most people never see, and which few investment advisors even warn people about. Suck-factor #1) an annuity locks up your money for many years –sometimes decades– leaving you stuck with a small monthly disbursement which you are unable to alter or cash out of without serious wrangling and often severe penalties. In a perfect world, no emregency will every arise that would force you to resort to a premature cashout. But again, this is not a perfect world. Suck-factor #2) an annuity is only good for as long as the investment company that administers the annuity doesn’t go bankrupt, and so a 20-year annuity means you are married to that investment firm for two decades, praying they do not go under. And in the scenario you are suggesting, the holding company that we do not want to see go bankrupt would be the United States Treasury. In a perfect world, the US Treasury would of course never go bankrupt. But we all know better than to believe in fairy tales like that.


    Depending upon how the government sets up this hypothetical annuity fund you are suggesting, once Social Security dollars get scuttled sideways into such an annuity, those dollars might very well NOT be pretected/insured/guaranteed. And THAT is why I never let myself suggest annuities to people. So many other types of accounts out there have proections and guarantees in the event of the financial firm going insolvent. But annuities run around completely naked with no protection, sometimes for 20 years. This might be Uncle Sam’s way of writing themselves a get-out-of-jail-free card to let people’s Social Security default into the hands of Uncle Sam, and Uncle Sam will be under no obligation to pay it back. It would be a brilliantly evil shell game, Jack, as evil as the big banks that bet against bad sub-prime loans, rooting for those sub-prime loans to default. Uncle Sam can’t lose in that instance.

  9. @ Jack on COBRA,

    New one on me, Jack. Is there a window of time starting from the day of severence to get that replacement insurance AND be guaranteed that pre-existing conditions will not be turned down?

  10. @James that doesn’t look too bad! Most if not all the food groups covered, and is that white tuna sushi in the top middle!? 😉 If I had kids they’d be bringing their own.

  11. About how tax dollars are spent: I had trouble keeping up with the exact numbers you were using, but I will add that any time you hear govt numbers there are a couple things to remember:

    1) They use a system of “funds” which are treated independently of each other. For example, Social Security is one fund while most other spending will be in a “General” fund.

    2)They use a sort of “cash basis” accounting. The result is that only cash in or out is treated as revenue or expenditure. Also, there is disparate treatment between how bonds held are treated compared to how fund debt is recorded. So in the link above for example, notice it shows 100% of your SS contribution goes to Social Security. This is true if you accept the funds as truly separate. However, if any publicly traded company used something like fund acctg they would go to jail.

    Here is the reality:

    Money goes into the SS fund, it is treated as revenue and the overall value of the fund is increased. Then that money is “loaned” to the General fund. But the govt “owns” both funds so really the govt is just spending the money. The result is an IOU from the govt to itself and the money is spent.

    From the perspective of the SS fund, there is no decrease in the fund. The “securities” (treasuries) the SS fund now owns are kept on the fund books at fair value. From the perspective of the general fund there is revenue, but govt accounting only includes the value of current (matures within 1 year) debt on a fund. So for the purposes of the value of the funds, the long-term debt kind of just disappears and it looks like both funds are better off.

    Incidentally, I suspect if interest rates rise substantially the value of the social security fund will be destroyed. It may be one of the main unspoken political motivators behind keeping rates so low. For those who may not know, lower rates equal higher prices where bonds are concerned. So this suppression of rates by the Fed is probably having a huge impact in propping up the market value of the SS fund since it really probably has very little cash and is mostly comprised of US treasuries.

  12. what was the link for the non-profit “gardening” organization? Anyone start a forum thread yet? Discussing with someone who started several community non-profits and want to share this podcast and the info with him.

  13. Here is a non-profit trying to help people who really need it with food:

    There is a similar organization locally that I want to get involved with. As I told my friend who runs the site, growing food could be life-changing or even world-changing!

    Ken is running 30 miles per day for 7 days to raise food for people who need it. I’m in for 210 cans (website might not be updated yet, but 1 can for every mile, IF he completes it). We had a long chat tonight about what he is doing, community gardens, and helping people who really need it.

    Just wanted to share with the community.

    P.S. Gift cards are accepted in lieu of cans for out of state people. But not trying to solicit donations here, just sharing based on Jack’s podcast. Non-profits = real help. Government = bureaucracy.

  14. As a public school teacher I see insane amounts of food thrown away every day. At least… the cafeteria is labeling it as food. I have never willingly eaten a school lunch in all my 15 years of teaching except for the Thanksgiving meal and even that was fairly awful.

    On the milk… it isn’t even just strawberry and chocolate you have to worry about any more. They have vanilla shake milk and cookies and cream milk. I kid you not. Sugar laden disgusting monstrosities of no nutritional value.

    The meals that I see kids bring typically include a sandwich, chips, and a juice box which isn’t overly healthy but compared to what the lunch ladies are serving, it’s nutrition paradise.

    Don’t get me started on obese and lazy children. I have seen kids so lazy that at 9 years old, they can’t touch their toes and whine about being tired after 5 minutes of mild exercise. Pathetic.

  15. Hey Jack, quit talking about the possibility that the government will raid 401(k)’s…you’re giving them “good” ideas on how to do it. lol

  16. @Oil Lady

    In the past there window has been none, you had to have no lapse. This was a good reason to allow for extortion for say a week or two of COBRA till you found private insurance.

    Better option, call up an agent, get a temp policy (catastrophic only for 30 days), this are dirt cheap as they only last one month. Use that time to find a permanent policy.

    Also one of the few good things about Obamacare is no more turning anyone down on preexisting, but you can rate the hell out of them, which really doesn’t solve the issue unless the person qualifies for the “high risk pool”, which alone may bankrupt the US.

  17. Jack,

    The advice you gave to the fellow with the silver has one small issue that you failed to talk about….TAXES! If the guy is going to be selling $3000 worth of silver, he really needs to send uncle sam a tax payment….if his cost was $10/oz he will owe (very) roughly $500.

    If anyone issues him a 1099 on his sale he MUST declare the income….the .gov will find him and demand their money!

  18. @James,

    Thanks for the link! Now doesn’t that look like a nourishing lunch? How did you find the pic?

  19. @GomerPile

    First you declare your own basis. What he paid vs. what he says he paid is hard to prove. Secondly all one has to do is sell it in 450 dollar lots to several sources.

    Or sell it privately to another private person. That would be really easy to do at say a buck under spot which is better than what you get from most dealers. Selling silver for cash really isn’t hard.

  20. @Modern Survival

    Agreed on the selling silver for cash. I was thinking about eBay that may send you a 1099. Ebay is where the best sale prices seem to be happening right now.

    Soon I think a lot of PM holders (esp gold) will be getting ready to cut their holdings in half. Many will fear .gov confiscation. And many will want to switch into something more tangible like their house, land, guns, etc. If you sell 2004 Maple Leafs today and there is no way to prove cost basis, will the IRS force you into the cost of a 2004 maple leaf? Or do they just take your word for it? Something that will be on their radar soon IMO.

    Did not know that about selling Eagles. I assume that the law is only for Eagles and not for silver in general (IE Maple Leafs)?

  21. @GomerPile

    The basis is pretty much what you say it is. With new paperwork being put in place on future purchases that may change but for now it is what you say it is, unless you get stupid there are generally no issues.

    Also eBay will never be sending 1099s to anyone but an eBay affiliate for referral income. The 1099 would be cut by the merchant account provider such a Verisign or PayPal.

    The smart way to do this is say Craig’s List, meet in a public place, exchange for cash. If I can buy silver for a buck or two under spot from a private person, I am happy to do it.

    No shipping, no problems, etc. You can also go to any coin shop, pawn shop, etc. Sell it again at lots of 450 each, done. They are closing some metal loop holes but many still exist.

    Of course you are still “required” to report the profit on those sales, but that is between you and the fence post.

  22. @Modern Survival
    The older page was cached on another server. A facebook friend used Readability and it must use some sort of cache, they saw the image and shared it

  23. Thanks for all the input.

    Regarding gutters and ditches, I have gutters and the downspouts direct the water about ten feet from the foundation. I do want to dig a drainage ditch across the back of the property, behind the house, as the house is built into a hillside. The house is kind of like a raised ranch and the basement is really a living room with a fireplace. However, because of the dampness, we haven’t really been using it. Not to mention I had to remove some of the sheetrock due to mold.

    As for silver, I will/would only sell if the deal is private and anonymous.

    Jack, I have a guy coming out today to give me an estimate. I believe that it is going to cost somewhere along the lines of $5-8K. I have a couple more guys coming out for estimates, as well.

  24. In response to,

    “I believe that it is going to cost somewhere along the lines of $5-8K.”

    Ouch! I am really not sure what to suggest at this point than. It seems like a repair you must make, I hate to say it but you may have to finance some portion of it with debt. I would do as LITTLE of that as possible though. God I hate saying it but I don’t really know what else to advise you.

  25. Yeah, I don’t really want more debt, but unless I sell all my metal, I don’t think I can avoid it. I will let you know what the actual number(s) are once I have them.

    Incidentally, the $15K I had on the credit card (now $3K) and the $7500 second mortgage was for a new septic we had to have put in last year.

    This has been a bad year for getting out of debt.

  26. Jack I also like Jamie Oliver great show. There are also great movies out there that talk about our food. I am sure you have watched them but I thought I would mention them just incase. The first and more famous one is “Food inc”, this movie is a real slap in the face. It is real graphic and points a lot of problems but offers not a lot answers. The Second movie is “Fresh the Movie”. Points out the same issues with our food as Food inc but does it in a more subtle way. What I really like about this movie is all the answers and alternatives that are out there for our food.
    I like both movies but I can and do watch Fresh more often. I think it gives me more hope that we can fix our food system and get back to a nation of farmers as we should be. Here is a link for Fresh.

  27. At the bottom of that Chicago lunch article is the following footnote (still doesn’t look as good as mom or dad would make though…hard even to tell what it is!):

    (UPDATE: An earlier version of this story was illustrated by an AP photo of a student’s lunch in Gleed, Washington, which was labelled as such but some readers complained was misleading. To see a photo of a sample lunch served at Chicago’s Little Village Academy, click here.)

  28. Wow, you have snakes, wasn’t expecting that… 🙂
    I like snakes as long as they arent going going to hurt me seriously when they bite me :P. Awesome show jack, Keep up the AWESOME work 🙂

  29. Jack, i don’t know if these are avialble to the population there, but there are taser varents which are … basicly a low powered shotgun, which fires a capacitoer with barbs to get though clothing.
    this would be the multi fire taser.

  30. On the tax calculator, seems like they also do not account for taxes they receive from companies. They might say well we take 30% of what we get from companies and put it towards the interest, rather than 7.4%. Of course we know that is BS – it all goes into the same pot.

    It’s interesting, if you do the $10k in income as you did on the show, you get your numbers. Then whatever you put in the other two fields (SS and Medicare) gets 100% allocated to those “separate” pots. Yeah…. right. Oh boy… some hope & change & transparency all right.