The headline read: HOUSEHOLD INCOME IN SERIOUS DECLINE. I thought "gee, that sounds serious" so I decided to give it some thought. I would try to consider the issue in terms that I could understand and express and not rely on someone else to tell me what was happening and what it meant. Economics sounds impossible to understand anyway so I made my model as simple as possible.
I started with one family in one household. They've been married for 25 years. He's an engineer who makes $100k per year. She's been a housewife and is licensed to sell real estate. She's had a part time income of $30k per year. They have one child who has just graduated from college. They're very proud. So the household income in my model at the first year is $130k per year.
But there's trouble in paradise. It turns out, that the husband and wife really don't have much in common besides the child, who will now be leaving home, and don't want to remain married. And so they divorce. Now the model looks like this. He is an engineer and still has an income of $100k per year. She now sells real estate full time and has an income of $75k per year. Their child has (as mentioned) graduated from college and has accepted a job offer of $65k per year. So the total income is now 100 + 75 + 65 = $240k per year but the number of households is three instead of one, so the average household income in my model is $80k per year down from $130k per year which represents a 39% decrease.
In my model (simple though it may be) there was a 39% decrease in household income but it can easily be argued that no one suffered financially from it. I'm not arguing that this is how things are in a larger economy at all, but I do think it important to realize that when looking at economic headlines one must try to break free from the story that's already running in ones head and the one the headline writer wants to tell. In the case of households there are many factors that effect the "household" income. How many people in the household? (Lower marriage rates and smaller families will result in lower household income). The age of the household. (Younger families or individuals will have fewer skills, and less experience and so will naturally have less income. In a growing population the "household income" number will decline on its own even in an unchanging economy). How many households are being considered? (Even in an economy where individual incomes remain constant "household" income will change based on the number of households used in the calculation).
Also to be considered is the motive of the people who bring you the news of the declining or increasing statistic. What is it they want for you to think and why?
But then that's just what an average guy thinks.
Sunday, July 27, 2014
Monday, May 26, 2014
Medication As The Solution
A story appeared not terribly long ago in a natural health magazine that I happened across. In it was detailed the saga of a man who, years ago, had been diagnosed with some bothersome but not life threatening condition for which his doctor had prescribed some medication. Everything was fine for a while and then the man started to develop one of the publicized side effects of the medication. He went back to his doctor who knew exactly what to prescribe to make him feel better again, and he did.
Again, time passed and the man grew older, and as happens he developed another minor, but bothersome condition, but now there was a new doctor who had no real knowledge of the man, or access to his records, but still the doctor was sure of what prescription would be necessary to return the man to normal.
Toward the end of the story it was mentioned that after 20 years the man now had 10 prescriptions that he had to use a sorting device and a spread sheet to keep straight. Some with meals, some on an empty stomach. Some in the morning, some at night. Some every day, some every other day, and all to manage what he has come to suspect was a condition brought on by his diet and lifestyle choices. His employer provided him with access to decent insurance and his co-pays were always generous but even in the best of times he didn’t really feel “good” he just didn’t feel “bad”.
The story ended with him shucking all of his medications except the one or two that his doctor warned him not to suddenly quit and he has found a new doctor who is helping him to wean himself even from those using an intense program of improved diet and physical exercise.
The authors of the story made their points very clear. Many times we seek an easy solution to our problems that then in there turn create problems that require solutions of their own.
LADIES AND GENTLEMEN. CHILDREN OF ALL AGES. I GIVE YOU THE FEDERAL GOVERNMENT OF THE UNITED STATES OF AMERICA.
Something happens we don’t like? Make a law….. but of course we have to put something in there to keep our friends from being negatively affected. Next year we learn that something else has happened and so now the automatic re-action is to make yet another law…..and another and another, until no one can tell you what the law is.
The complexity of law promotes chicanery, because it makes it easier for those who would abuse us to blend in. Complex laws provide cover for the unethical.
“Comprehensive” and “OMNIBUS” legislation are the enemies of the people of the United States of America.
But that’s just what an average guy thinks.
Again, time passed and the man grew older, and as happens he developed another minor, but bothersome condition, but now there was a new doctor who had no real knowledge of the man, or access to his records, but still the doctor was sure of what prescription would be necessary to return the man to normal.
Toward the end of the story it was mentioned that after 20 years the man now had 10 prescriptions that he had to use a sorting device and a spread sheet to keep straight. Some with meals, some on an empty stomach. Some in the morning, some at night. Some every day, some every other day, and all to manage what he has come to suspect was a condition brought on by his diet and lifestyle choices. His employer provided him with access to decent insurance and his co-pays were always generous but even in the best of times he didn’t really feel “good” he just didn’t feel “bad”.
The story ended with him shucking all of his medications except the one or two that his doctor warned him not to suddenly quit and he has found a new doctor who is helping him to wean himself even from those using an intense program of improved diet and physical exercise.
The authors of the story made their points very clear. Many times we seek an easy solution to our problems that then in there turn create problems that require solutions of their own.
LADIES AND GENTLEMEN. CHILDREN OF ALL AGES. I GIVE YOU THE FEDERAL GOVERNMENT OF THE UNITED STATES OF AMERICA.
Something happens we don’t like? Make a law….. but of course we have to put something in there to keep our friends from being negatively affected. Next year we learn that something else has happened and so now the automatic re-action is to make yet another law…..and another and another, until no one can tell you what the law is.
The complexity of law promotes chicanery, because it makes it easier for those who would abuse us to blend in. Complex laws provide cover for the unethical.
“Comprehensive” and “OMNIBUS” legislation are the enemies of the people of the United States of America.
But that’s just what an average guy thinks.
Sunday, March 9, 2014
Do-Nothing Congress
There it was again today. Someone berating the congress for “doing-nothing”, and it was put forward again that this is one of the reasons voters are unhappy with their representatives.
“The congress needs to get busy doing the “people’s work”” is a common refrain which aims to take advantage of voter ignorance of what that really means. What it DOESN’T mean is that the congress will be doing any “work” for us. They won’t be mowing our lawns, doing our laundry, or painting our houses. “Doing the people’s work” is a euphemism as foul as any ever uttered that they slid in there while no one was paying attention. What they have convinced voters it means is that the congress is standing up for their interests, but what it really means is that they are making more and more rules about what we the people can do, and can't. They are developing more and more new programs, bureaus, and departments that will grow and grow into the future, requiring ever increasing revenue streams that exist only in the minds of ivory tower economists and progressive ideologues.
Our do “something” congresses have spent us into a $22 T debt hole that our children’s children won’t see the end of. We should ALL be ashamed. And even more troubling than the monies we already owe, are the unfunded liabilities…. the monies that our elected representatives IN OUR NAMES have promised to pay in the future. Now 123 TRILLION DOLLARS.
These were not “Do-Nothing” congresses. No. These congresses were, indeed, doing the people’s work. And this is what we have to show for it.
But that’s just what an average guy thinks.
“The congress needs to get busy doing the “people’s work”” is a common refrain which aims to take advantage of voter ignorance of what that really means. What it DOESN’T mean is that the congress will be doing any “work” for us. They won’t be mowing our lawns, doing our laundry, or painting our houses. “Doing the people’s work” is a euphemism as foul as any ever uttered that they slid in there while no one was paying attention. What they have convinced voters it means is that the congress is standing up for their interests, but what it really means is that they are making more and more rules about what we the people can do, and can't. They are developing more and more new programs, bureaus, and departments that will grow and grow into the future, requiring ever increasing revenue streams that exist only in the minds of ivory tower economists and progressive ideologues.
Our do “something” congresses have spent us into a $22 T debt hole that our children’s children won’t see the end of. We should ALL be ashamed. And even more troubling than the monies we already owe, are the unfunded liabilities…. the monies that our elected representatives IN OUR NAMES have promised to pay in the future. Now 123 TRILLION DOLLARS.
These were not “Do-Nothing” congresses. No. These congresses were, indeed, doing the people’s work. And this is what we have to show for it.
But that’s just what an average guy thinks.
Tuesday, February 4, 2014
Loss Of 2.3 Million Jobs Offers Welcome Choices To American Workers
Today the non partisan Congressional Budget Office released a report that said that because of the effects of the implementation of 0bamaCare 2.3 million jobs would be lost over the next ten years. Also today in the White House press briefing room the presidents chief economist Jason Furman was putting lipstick on this pig and claiming that it was a net positive because now families would have the chance to make choices. He even went so far as to pose what he must not have realized was such an absurd hypothetical that I almost fell out of my chair.
He said something like: suppose someone is working at a job 65 hours a week only because they need the employer provided health care benefit. NOW they will be able to work say….. 35 hours a week, collect a subsidy and still have “insurance”. Never mind of course that even though their premium payments will be subsidized, their co-pays at the doctor and pharmacy will be hiked up and their deductible is sure to increase.
But beyond that absurdity this attitude illustrates just how ignorant these government elitists are of what it’s like to work for, and actually earn a living. Even if you take as an example a semi-skilled worker earning $15/hr. Sixty five long hours of work would give you a gross monthly income of just over $4,900. Of course there are payroll taxes and your contribution to your health care, but that’s where you start from. At thirty five hours your gross pay for the month would drop to $2,220. What working person with responsibilities would voluntarily choose to take a 54% cut in pay? No one in the lower or middle class I can tell you that much for certain.
And what of battle against “income inequality”? Does this “choice” not cut this family’s income in half? Does this not increase income inequality rather than reduce it?
HELP!!! I’VE FALLEN OUT OF MY CHAIR…. AND I CAN’T GET UP!!!
But that's just what an average guy thinks
He said something like: suppose someone is working at a job 65 hours a week only because they need the employer provided health care benefit. NOW they will be able to work say….. 35 hours a week, collect a subsidy and still have “insurance”. Never mind of course that even though their premium payments will be subsidized, their co-pays at the doctor and pharmacy will be hiked up and their deductible is sure to increase.
But beyond that absurdity this attitude illustrates just how ignorant these government elitists are of what it’s like to work for, and actually earn a living. Even if you take as an example a semi-skilled worker earning $15/hr. Sixty five long hours of work would give you a gross monthly income of just over $4,900. Of course there are payroll taxes and your contribution to your health care, but that’s where you start from. At thirty five hours your gross pay for the month would drop to $2,220. What working person with responsibilities would voluntarily choose to take a 54% cut in pay? No one in the lower or middle class I can tell you that much for certain.
And what of battle against “income inequality”? Does this “choice” not cut this family’s income in half? Does this not increase income inequality rather than reduce it?
HELP!!! I’VE FALLEN OUT OF MY CHAIR…. AND I CAN’T GET UP!!!
But that's just what an average guy thinks
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