Monday, February 28, 2022

End Games

Putin spontaneously kisses a young boy on the stomach, because that is what rational world leaders do, right?

Everyone is caught up watching the war in Ukraine to the point where no one thinks - or wants to think - about where it is going.  It is weird, but Vietnam was the first televised war and perhaps Iraq the first social media war.  We get videos of battle actions as they take place, or the grisly results afterwords.  Ukraine has even set up a hotline for worried Russian parents to call, to check on the status of soldiers who have been taken captive.  Imagine that during World War II - "Honey, it's our son!  He's calling from Stalag 17!  No, operator, we don't accept collect calls!"

It is weird.  But it is interesting to see how things are playing out.  The resistance of Ukraine is admirable and Putin has united the West after spending decades trying to divide us.  Worse yet, he has exposed the Russian military as the paper tiger it is - and Russian technology as unreliable and shoddily made.  Of course, I knew this already, as I owned a Russian motorcycle, which needed my constant attention just to keep it running!  It doesn't surprise me that Russian vehicles would break down, get stuck, or be poorly maintained.

But of course, Russia hasn't really gone all-out in this war.  We may see, even later today, the use of air power and indiscriminate bombing to try to bring Ukraine to its knees.  But in a way, Putin has already blinked - offering cease-fire negotiations as the body count of dead Russian soldiers climbs.

America, other than issuing sanctions, is being pretty quiet about all of this.  After all, we can't claim the high ground after invading Iraq and Afghanistan and killing tens of thousands (if not far more) of their citizens and bombing their infrastructure to ruins.   So we keep quiet and let our European proxies do our work for us.

But where is this going?  Is this the beginning of World War Three or the end of the Putin autocracy?  There are a number of possible outcomes, but none of them are very pretty.  Some are less pretty than others.

1. World War Three: It is hard to believe that annihilation of pretty much all life on the planet would start this way.  But then again, it is possible.  Putin hasn't shown himself to be a rational actor, but rather capricious, spontaneous, crafty, calculating, and paranoid.  When you poison your opponents with Polonium, well, all bets are off.

The likely scenario for this to happen would be by accident.  Putin put Russia's nuclear arsenal on "high alert" and even with Russian technology, some missiles will get through if fired.  Meanwhile, the West is no doubt gone to Def Con Three or whatever, so everyone has a sweaty finger on the red button.  All it would take is for one false radar report or a war games simulation to be accidentally loaded into a computer, for someone to panic.  We can only hope the systems are more robust than that.

2. Limited Nuclear War: Putin might try to use battlefield nuclear weapons to start a limited nuclear war, for example, by bombing Kyiv.  While we think of nuclear weapons in terms of enormous Intercontinental Ballistic Missiles, there are much smaller munitions in everyone's arsenal.  We even had nuclear shells that can be fired from a howitzer.  We even experimented with what was little more than a nuclear hand-grenade.

The point is, you could use nuclear weapons in a limited way - to destroy just part of a city or the city center - or to get after certain leadership and command and control.  Putin might calculate that such a limited use of nuclear weapons might not result in a retaliation by the West, which would arguably trigger Armageddon.  The problem with this approach is that once one nation "gets away" with using limited nuclear war, it won't be the last time it is done.  It is a scary possibility.

3. Annexation of Donetsk and Luhansk:  This was what people were expecting all along - that Putin wanted the Russian-populated regions of Ukraine, and would "invade" those regions to support the minority Russian population.  He would use a pretext of genocide against Russians in the region (which he did) which is ridiculous on its face.  But he used similar arguments to annex Crimea, which had strategic significance and of course, the West let that slide at the time.

I am sure their negotiating position in the cease-fire talks is to allow Russia to maintain a presence in those two districts.  The idea, of course, would be to nibble away at Ukraine, much as it already has done, and has done with Georgia and Chechnya.

The problem with this approach is that by de facto declaring war on all of Ukraine, the West isn't content to look the other way this time.  Just as Hitler nibbled away at Europe, one piece at a time, eventually there reaches a point where the intent to take over is clear, and other countries band together and say, "enough is enough!"

4. Overthrow of Putin:  While there are many protests in Russia and Belarus right now, the police are beating and rounding up protesters.  Putin has created a police state, complete with an effective propaganda machine (and we know this, as he used it against us!).  It is unclear whether the Russian people are brave enough or knowledgeable enough to rally to overthrow Putin and install a new, hopefully more democratic government.

There is precedence for this of course.  After the Soviet Union's disastrous invasion of Afghanistan (you would think we would have learned from that!) the Berlin wall fell.  The occupation of Afghanistan was not popular with the Russian people and it nearly bankrupted the country.  People wanted change, and the fall of the Soviet Union ushered in that change, as well as an increase in the standard of living for the average Russian - no more waiting in lines for brown bread!

Well, thanks to years of sanctions and more recently imposed stiff sanctions, breadlines are back.  Maybe eventually even the Police will get sick of it all.

But then again, the Soviet Union fell not because of protesters or revolution, but because Gorbachev saw the writing on the wall and thought it wiser to go quietly into the night.  It is not clear to me that Putin will make such a noble gesture.  In fact, it seems like he would hang on until the bitter end.  The result could be civil war in Russia.  But then again, it is hard to gauge public opinion in Russia these days.  Sure, there are protests, but are the protesters willing to revolt?  We'll have to wait-and-see.

I wonder if a revolution or coup-d'etate did occur, it would be orchestrated by the Oligarchs who are the power-behind-the-throne.  War is one thing - if it is profitable.  But when it starts costing money, the money people may pull the plug.

6.  Putin Withdraws:  Obviously Ukraine would like to see all Russian troops gone from its territories and the war ended.  But even if Putin agrees to this - leaving all of Ukraine with his tail between his legs, what then?

Does Ukraine sue for war damages - the infrastructure, dwellings, and factories destroyed by shelling, bombs, and missiles?  What about the war dead - civilians and soldiers?  Does Russia pay reparations for their actions?

And when - if ever - do we drop sanctions?  Do we go back to "business as usual" with Russia - buying its gas and oil and pretending the bad things didn't happen or are not happening even then?   This is a tricky question and since we are all caught up in watching the war, I don't think many are contemplating this end game.

If we don't lift at least some sanctions, what carrot (or stick) do we have to offer Putin?  Why would he bother stopping the war, if we didn't at least dangle out the possibility of a return to normalcy?

There are, of course, many other scenarios and the situation is so fluid right now.  Kyiv could fall today - or tomorrow.  Or the West may be drawn directly into the conflict.  I guess what worries me right now is that we are so caught up in the visuals of war and the brave stand of the Ukrainians, that we are not thinking through where this is going.  Even if the war ended today, it is going to be very awkward moving forward, if Putin stays in power.

The only "good" scenario is if he steps down or is assassinated.  With a new government in place, Russia could return to some sense of normalcy, and once sanctions are lifted and Russia is no longer a pariah state, their economy could thrive.

Anything less than that, and, well, we are right back where we started.

Sunday, February 27, 2022

Do You Need a Domain Name? Probably Not.

Before Google, a domain name was your street address on the Internet.  Today, people have Internet GPS to find you - search engines.

NOTE:  This is an older posting I just got aaround to finishing today.

I wrote an article many years back about the .xyz domain name scam.  To summarize, they came up with this new .xyz domain name extension, and some domain name hosts automatically signed you up for these for free - for a year.  After the year was up, they would start dunning you to pay for the unnecessary and unordered domain name, saying that you had "ordered" it.  No doubt many small companies paid, thinking their main domain name was expiring.

But I raised the question in that article, are domain names still worth anything?  Back in the heyday of the Internet, you could register and then ransom it to the company.  They have since passed laws about this, so it is harder to do - with registered trademarks.  In fact, it was pretty hard to do to begin with.  The most you could expect is to sell a domain name for less money than the legal fees involved in forcing your to give it up.

It is like the McDonald's cup-o-coffee case, which has acquired urban legend status.  Depending on your political views, it is either an example of a heartless big mean corporation intentionally scalding the vaginas of old ladies, or an example of a litigation system run amok.  The answer is somewhere in-between.  No, McDonald's coffee wasn't hotter than coffee made elsewhere (including in your own home, as I illustrated with a thermometer).  And yes, the lady was injured horribly - but then again, who uses their crotch as a cupholder for hot coffee? Personal responsibility comes into play.   And since that case, well, the Starbucks you buy today is the same temperature as the evil McDonald's coffee.  The only difference is we put warning notices on the cups today, and every car sold in America has 20 cupholders.

The urban legend around domain names is about the same.  Yes, some people made money registering domain names and selling them to the companies that rightfully should have had them.  Others, well, they didn't fare as well.  The whole thing blew over after a few court cases and when the law was changed.  The problem is, of course, that two companies can have the same name. One reason I use my full name Robert Platt Bell is not vanity, but because there are a LOT of Robert Bells out there, including some sort of preacher dude and more than one professional athlete.  In fact, my YouTube channel is named Robert Bell and I am sure the minister guy isn't happy about that!  Maybe that is why he goes as "Rob Bell" instead.  Just a guess.

The grand-daddy case involving this was the Panavision case.  A guy went out and registered a plethora of domain names of famous companies and trademarks, including "Panavision" which is a name of a particular filming format which squeezed wide-screen images into standard 35 mm film (back in the day).  He set up a website with a few photos of "Pana, Illinois" and claimed this was legitimate use of the domain name.  After all, he wasn't profiting from it, right?  I mean, other than the money he hoped to make selling the domain name to the Panavision people.

The urban legend at the time was that this guy was making millions selling these domain names.  But in reality, he was asking only a few thousand dollars apiece for the domain names in question, so it is unclear that he made any amount of money over this.  In fact, after legal expenses, he probably was cleaned out.  But the whole story plays to the idea that "the little guy" can score big by being wily and clever.  It is another example of poverty stories - which keep people down.

Sure, maybe Coca-Cola needs an easily recognizable domain name.    But what about you and me?  What about small businesses?   There, the need is far less.  I registered but never really used the domain for much.  I wasn't interested in developing a website and in fact, most law firm websites seem to me to be cobwebsites - not a lot of information in them, and this is often by design.  You never want to hand out free advice to clients, right?  And so much gets outdated so quickly that older articles can be bad advice or even malpractice - which is why I erased much of my old website as it was woefully outdated (and of course, I am retired).

I paid to register the domain name with network solutions, which at the time, had a monopoly on the business.  My domain name expires in 2036, and is not set to auto-renew.  I am not sure why I even paid for it until then - after all, I am retired.  Maybe I will put up some pictures on the site or articles or link it to my blog or something. Today, you can register your domain name with a number of companies, including Google or Go-Daddy (who advertises a lot).  Myself, I don't think they are all that important anymore.  People find your business through Search Engine Optimization or through word-of-mouth.  SEO is fine and all, but I for one am skeptical of the first five hits on Google.  I tend to scroll down to find things, and often, I have to search several times on Google to get away from what they want to show me versus what I am looking for.  The system is broken.

Once in a while, though, domain names do direct you to the proper site.  However, I notice lately that Chrome is basically a google search engine - you type in a URL and Chrome goes to Google which shows you that site - along with competing sites from advertisers.  For example, we have an old church pew that we use in our dining room on one side of the dining table (a 200-year-old slab of wood from Mark's Dad's rest home he ran in Westcheser). We wanted a cushion for it, and jokingly, I typed in and sure enough found the best place to get church pew cushions made!   But such results are usually few and far between.

I am not sure what the point of all this is, other that it is interesting how, at one time, domain names seemed oh-so-important but today they are hardly thought of.  If you have a company and want to register a domain name and it is already taken, well, you can register something else and hardly be affected.  If you have a micro-brewery and the name of your brewery is already registered to someone else, well, you can pick something like "" and it will work as well, if not better.  People will likely find your website through Google anyway, if they even bother to look for your website in the first place. Sadly, your Facebook page is probably more important today, and I notice that most companies put a lot of effort into their Facebook presence and their website is usually outdated.

How long before that changes?  That's why Zuckerstein is jumping on this "Metaverse" nonsense, hoping to catch the next big wave as the old one peters out.  And in that regard he is being smart - but he has to hope it is a big wave and not just a splash in a puddle.

The Internet changes dramatically in a very short period of time.  Things we think of as "institutions" on the Internet are usually only a few years old - maybe a decade at most.  And as suddenly as they hit the scene, they evaporate - like AOL or MySpace or Second Life.

Domain names are the same way.  Sure, like AOL, Myspace, or Second Life they are still around - and still used.  But the critical importance we attached to them at one time seems, in retrospect, to be overblown.

There is a lesson in there somewhere, if we bother to look.

Saturday, February 26, 2022

Ultra-Low-Mileage Cars

Any piece of machinery works best when it is used regularly.

A reader writes that their neighbor has a nine-year-old Subaru with only 3,000 miles on the odometer.  They never drive it, and claim they are "saving the planet" by not doing so.  I am not so sure about that - the energy costs and resources used just in the construction of the vehicle outweigh the energy cost of regular usage.  If they really want to save the planet, they should just not own a car - and rent one or take a taxi when needed.  Of course, if they really, really wanted to "save the planet" they would kill themselves, because the big problem with humanity is too much of it.  But I don't think that is a workable solution.  Besides, a few more pandemics, wars, and an occasional asteroid impact, and it will all even out.  Wait for it.

The neighbor has had to call AAA repeatedly to jump-start the car.  "The battery is nearly new!" they say.  The AAA man says it might be defective.  He may be right about that.  But it illustrates the folly of keeping a car - or any piece of machinery - and not using it.  You are not "saving" it for later, just wasting it.

It reminds me of the house about seven doors down from us that has been abandoned for 20 years.  The owner lives in Florida and she is "saving" the house for her daughter, she says.  Well, there isn't much left to save at this point - there are plants growing inside the house and the power has been off for two decades.  It is full of mildew and rot.  It is a teardown at this point.  But I digress - or did I?  Houses are machines for living, and like any expensive machine, they turn to rot when left unused over time.  An occupied and used house lasts longer than an unoccupied and abandoned one.

Same is true for cars.  A car not driven falls apart, and collectors of old cars know this and take steps to stop the decay.  What sort of things am I talking about?

1. Battery:  Modern cars have a lot of computer systems that are "on" all the time, such as the remote keyless entry and alarm system.  Our old 1997 BMW would drain its battery in 30-45 days when we left it at the airport in Ft Lauderdale. So long as we traveled to Florida more often than that, we had no problem.  The reason why this lady's battery is going dead is probably because of simple lack of use.

Worse yet, if you let a conventional car battery go dead more than a few times, it kills the battery.  So a "brand new" car battery, drained flat three or four times, may not hold much of a change anymore.  So another new battery is in order.

Car collectors know this and put a "maintenance charger" on the car, which trickle-charges the battery over time.  Some plug into the cigarette lighter, but lately many cars have the cigarette lighter go dead when the ignition is off, so the maintenance charger has to be connected to the battery with cable clamps.

They also sell solar trickle chargers that roll out on your dashboard - handy for people who store a car outside or at long-term parking.  Again, most plug into the cigarette lighter, and if the car is wired so this isn't "hot" when the key is out, well, it won't work unless you run a wire to the battery.

2. Fuel: Gasoline does weird things as it ages, particularly in hot weather.  It will form varnish and clog fuel filters and engine components.  I had a friend who had a house in Key West - they went there in the winter months only.  He left a Jeep there to tool around in, and every year, he had to have it towed to the shop, the tank dropped, and the fuel filter replaced.  I turned him on to fuel stabilizer (such as STA-BIL) and gave him a quart of it (a lifetime supply!) and no more problems.  Without fuel stabilizer, gasoline goes stale, forms varnish, and clogs things up.  It gets expensive to fix and can leave you stranded on the highway.

Diesel is no better - and often worse.  Algae will actually form in diesel fuel tanks, as any mariner will tell you.  They make diesel fuel stabilizers, too. But like any other engine, diesels don't like to sit.

3.  Oil: Oil degrades over time. Granted, it degrades faster when the car is being used.  But a car run regularly - fully warmed up and run for an hour or more - will heat the oil and boil off any water or other volatiles (e.g., gasoline) which may contaminate it.  Some folks with intermittedly used cars (or boats, or airplanes, or whatever) will start them and run them to "charge the battery" - but unless they let the engine really warm up and run hard, it doesn't get rid of the moisture and other containants and in fact, may make the situation worse.

Granted, the closed-loop crankcase ventilation of modern cars has eliminated much of this problem - but not all.  For example, my BMW X5 had an oil separator in the PCV (Positive Crankcase Ventilation) system, to extract oil vapors and condense them and return them to the crankcase.  All very well and fine, but BMW discovered that in cold climates, the separator (a cyclone separator like in a Dyson vacuum) would fill with water (from water vapor) which would then freeze and crack the plastic housing.  They recalled the cars to install an insulated housing.  Yes, there is a lot of water vapor in your crankcase, which leads to corrosion (more about that below) of things like camshafts and other assemblies.

Most oil companies recommend changing your oil every so many miles or so many months - often 6 months to a year.  I change the oil annually in the hamster, which gets about 5,000 miles a year.  I use synthetic, which costs more, but ages better.  This lady with the Subaru probably has the "factory oil" in it, and it is not providing very much lubrication at this point.

So oil changes are still required for a car that sits.  But even then, if not driven regularly, the interior of the engine can still rust.

4.  Coolant:  Modern coolants last a long time - some manufacturers claim 100,000 miles or more, with normal use.  But over time, coolant ages and corrosion forms in the cooling system. Engines which have a combination of aluminum and cast-iron parts are particularly susceptible due to electrolytic action - which is why it pays to use the correct coolant and sometimes even a "water wetter" additive per manufacturer's specifications.  Just because you don't drive the car doesn't mean that the coolant is still good or that corrosion isn't happening.  Just another expense - if you want to keep the car running and reliable.

5.  Tires:  Tires will dry-rot in as little as five years. They also take a "set" or have "flat spots" when sitting for months or years on end.  Usually, the flat spots will go away after you drive a few miles, but as the tires age, they harden and flat spots may persist, making the car vibrate and the steering wheel shake and affect the ride.  Dry-rot is a lot more dangerous - dry-rotted tires can blow out at a moment's notice.  Note also that all tires lose pressure over time.  In as little as a few months, they can lose enough air to be unsafe (which is why you check your tire pressures regularly, right?).  The intermittent car user might drive off on dangerously low pressure and in combination with dry-rot, experience a blowout.  Tires may need to be replaced after five years or so, even if there is a lot of tread on them.  This is an expensive way to travel, if you drive only 3,000 miles in nine years!

6. Cylinders:  When any IC piston engine shuts down, there is always at least one cylinder whose intake or exhaust valve is left open and the piston is in a down position.  This means the interior of the cylinder - the piston, head, and cylinder walls - are open to the environment.  In damp environments, this means corrosion, over time.  With iron-block engines this is a particular problem but even aluminum corrodes over time.  When the car is started, it can mean stuck piston rings (which if they break, necessitate an engine rebuild) or just excessive wear in that one cylinder, as the rust (iron or aluminium oxide) is a great abrasive (what do you think they make sandpaper out of?).

Again, this is a well-known problem with car collectors and many a "collector car" is burning oil as a result of this problem.  People who buy "barn find" cars often remove the spark plugs and squirt oil in the cylinders and then crank the engine by hand to help alleviate the rust situation and break rusted rings free.  Of course, you have to make sure all that oil is gone before you try to start it - otherwise you have hydrolock and you bend a connecting rod - new engine time.

Because of this cylinder wall issue (as well as other issues like stuck valves) cars that are allowed to sit for months or years on end often end up having an engine rebuild long before they accumulate any significant mileage.

7. Appearance:  My reader tells me the car is left outside and the garage is full of old boxes of junk.  This is sad.  Cars left outside degrade quickly.  The sun and rain erode the paint job and leave it chalky and faded. Clear-coat will oxidize and turn brown and peel off. Headlights get cloudy and look like your Dad's old toenail. Dashboards fade, get brittle, and crack. Upholstery fades from UV light.  And if there is even one tiny leak, water gets in and starts a mildew festival.  Garage your car if you have a garage - and throw out those boxes of junk!

Of course, crazy people like that claim they don't care about appearances, but it degrades the value of the vehicle, and paintjobs and upholstery are staggeringly expensive these days.  Dashboards are so hard to replace that few people ever do so.  A car left outside can easily degrade into nothing in a decade.

This is not an exhaustive list, of course.  Many other components don't like to "sit" and others need to be replaced based on age, not mileage.  Oxygen sensors, for example, can go bad due to age, even if they are not near their scheduled mileage replacement.  Bear in mind that when a manufacturer says "replace every 50,000 miles" they are assuming you drive 12,000-15,000 miles a year like most "normal" people do.

Taking care of a car is costly.  And many of these costs are fixed, no matter how much or how little you drive.  In fact, given the nature of these fixed costs, the cost of driving a car - per mile - goes up sometimes, the less you drive. Driving  car only 3,000 miles in nine years isn't "smart" - it is dumb as hell.  Imagine how much money this lady has spent on insurance, registration fees, and taxes alone - probably a few dollars a mile at this point.  And let's not even talk about depreciation. If this car cost $25,000 nine years ago, it is likely worth only about $7,000 today, given that cars depreciate 50% every five years (taking aside, today's crazy car market). That's six dollars a mile in depreciation alone!  As I learned the hard way with five hobby cars, low miles doesn't add much to resale value.  High mileage can ruin it, but low mileage doesn't add much!  Why?  Because (in a normal market) there are new cars with 0 miles on them for sale.  You can't expect your decade-old car to be worth what it was new, just because it has only 3,000 miles on it.  And no, a Subaru is not a "collector car".

What is sad to me is that not only is this lady not "saving the planet" she is not saving her pocketbook. Given all of the above, she could have hired a limousine to take her those 3,000 miles and it would have cost far less than letting a car "sit" in her driveway - and the "environmental impact" would have been less as well.  And hell, riding in a limo beats driving in an unreliable ratted-out old Subie, any day!

As it is, she now has an old car, not worth much, that she paid a lot for and used little.  Anyone buying it would be smart to change all the fluids, put on new tires, and replace the battery.  And likely the brakes might need attention as well, as I am sure the parking brake cable is rusted and one or more calipers might be frozen too.

I said long ago that this blog wasn't about saving pocket lint to knit as a sweater.  I get calls all the time from "reality" show producers who want people like that Subaru lady - people who are so frugal that they actually end up costing themselves more money.  Not driving your car can save money- up to a point.  But 3,000 miles in nine years?  That's just stupid.

And we don't play stupid, here!  Living better on less, is the key - not squandering money to make a "point" or for no reason whatsoever.

Act rationally in an irrational world.

Friday, February 25, 2022


Living in the dark is not good for your mental health.

It is funny, but we walk around our neighborhood and see so many houses with curtains drawn tight, all of the time.  Some of these houses have beautiful views, but they'd never know it, because the curtains are always drawn.  I wonder sometimes why these folks even have windows.  And sadly, in many modern houses, they have cut to the chase and eliminated most windows.  Why do people live in the dark like this?

I think there are a number of reasons. Television is one, paranoid privacy fears are another.  I mentioned before how people turn screen porches into glassed-in porches, and then decide to put the television on the porch.  But the ambient light reflects off the television screen, so they close the curtains.  So much for the "sun porch" - eh?  I mean, why bother?  The former living room becomes an empty room full of random furniture, that you walk through to get to the "new" living room which used to be a porch.

I think the same effect is happening with these closed-off houses.  They have the television in the front room, and the pesky sun keeps reflecting off the Tee-Vee and so they close the curtains - never to reopen them again.

The other half, I think is a paranoid fear of someone looking in. I see this a lot, particularly with women.  I think they are afraid that mean old men want nothing else but to see them butt-nekkid and perhaps glimpse the holy-grail itself.  They fear the vagina-peeper above all else!  I've seen women get so worked up over this that they cannot even live with louvered shutters or Venetian blinds.  If they can see out, the vagina peeper can see in!  I try to explain to them that line-of-sight doesn't bend around curves, and just because they can see light through the cracks doesn't mean anyone can see in.  And besides, there is no one to see in.  The road is 50 yards away and no one really wants to see your naughty bits anyway.

The other side of the coin is that light tends to reflect off of glass.  So if you are inside during the day, someone outside sees.... their reflection.  Unless they have their face pressed up against the glass, people on the outside aren't seeing in.  You'd have to have the curtains wide open, at night, and be standing silhouetted in bright light, with someone outside only feet away, for them to see anything "of interest" - and believe me, no one is that interested, particularly as most of us are rather unattractive. Screen porches, by the way, act the same way - like a one-way mirror.  All people on the outside see is black, unless you are standing in front of a bright light at night  - and maybe not even then.

So what's the harm in any of this?  Well, I think living in the dark affects your mind.  We need sun - it produces vitamin D in your skin.  And lack of vitamin D may lead to depression.  People who live in darkened houses seem to be depressed.  And if they spend all day watching television, looking at their phone or computer or playing video games, well doubly so.

So.... let the sunshine in.  Sunlight is also a good disinfectant.  No one is going to see your cooch - nor are they interested in seeing it.  Stop being paranoid.  And cut back on the screen time!

Living in the dark isn't fun at all!

Wednesday, February 23, 2022

Insure Yourself Into The Poorhouse!

Is it possible to have too much insurance?  Certainly!  Insurance companies will sell you poor bargains and insurance against long-shot outcomes.  It is up to you to decide what is worth insuring and what isn't.

NOTE:  This is a posting I started in 2018 and only finished today.  What a procrastinator!

A reader writes asking if short-term disability insurance is worthwhile.  And of course, it could be, if it cost $1 a year and provided $1,000,000 in coverage.  I suspect it doesn't though.  So the reader will have to answer that question for themselves.  Myself, I think that if you took that premium money and invested it in an after-tax account, it would quickly grow to an amount to cover "short-term disability" or what we used to call a "rainy-day fund" and if you didn't need the money (far more likely than being disabled, long-term or short-term) you could use it in retirement (when eventual disability is sort of a guaranteed thing).

But the question illustrates how a lot of Americans think.  Many of us live "paycheck to paycheck" in our lives so we can have a nice house and a fancy car, cable TV, the latest $1000 smartphone, designer coffee drinks twice a day, and restaurant meals four nights a week - plus lunches.  We live in fear of losing our jobs, because our carefully crafted house of cards will collapse around us if we miss even one paycheck.

And I know this, as I used to live this way, and it kind of sucked.  I had a good job - paying the vaunted six-figures (20 years ago, when that actually meant something) but I had little or no after-tax savings, a credit card debt that never seemed to go away, and a host of toys parked in my driveway or lawn.   I sort of figured, when I was very young, that if the shit hit the fan, maybe I would ask Mom and Dad for help - as my siblings did well into their 40's.  Later on, I figured I could borrow against my 401(k) or life insurance or cash out money from an IRA (and pay a hefty tax penalty) if something went horribly wrong. Those were horrible "what if" scenarios, as I would be cashing in assets protected from bankruptcy in order to protect assets not protected in bankruptcy, namely my house and cars and toys and junk.

Later on in life, I accumulated more after-tax wealth and worried less about "what if" scenarios and started to realize that eventually I would get sick and die - and in about the next 20-30 years or so.   And what I realized is that trying to insure against this wasn't insuring myself from harm, but insuring my assets - my house and toys - against loss of income or high medical bills.

My insurance agent tried to sell me long-term care insurance.   It would kick in if you needed to go to a nursing home, for example, if you had a stroke or something.  Seems like a good idea, but this sort of insurance is what nearly bankrupted GE, and I suspect that even if I bought the policy, the insurance company would probably have gone bust by the time I could file a claim on it.  That is to say, if I needed to file a claim on it.  Not everyone ends up needing long-term care. Just because grandma ended up in a nursing home or needing a home aide doesn't mean you will.  You just might keel over dead - as my neighbor did - and not be able to cash in on that swell deal!

In any event, the cost - about $500 for each of us, per month, for the rest of our lives - was just too much to pay.  And what I realized is that what I was insuring wasn't me, but my "stuff."  The agent explained it succinctly.  If I ended up needing long-term care, Medicaid would kick in, but only after I had exhausted my assets - my savings, my "stuff", my house, etc.   Although in the case of a married couple, usually the spouse gets to stay in the house - the government doesn't need to create more homeless people.

So you burn through your life's savings in the last few months or years of life, and then medicaid kicks in and pays for long-term care.  Where you are going, you don't need money.  So what's the big deal?  Sure, maybe a long-term care policy might put you in a nicer rest home, but chances are, a rest home isn't going to be much nicer and you'll be oblivious to the difference.   The long-term care policy protects your assets, not your ass.

And if you want to leave an inheritance to your children, I guess that is a swell idea.  On the other hand, let them earn their own damn money.  Or if you really want to leave money to them, try doing it while you are still alive. Use inter-vivos transfers to send them about $20,000 a year (consult your tax adviser for the exact amount this year) tax-free.  Deposit it right into their 401(k) or into an IRA (which may give them a tax deduction and tax credit) and they will have an inheritance to live on later in life.   Just a thought.  Leaving money to people when you are dead gets tricky.  Oftentimes your wishes aren't carried out the way you wanted them to be.

Insurance companies make money selling policies where the premiums pay them more than they pay out.  Seems like a simple proposition, but it is lost on most people.  You can't have an insurance policy where you take in $100 and pay out $1000.  You can, but you'll end up bankrupt before long, as GE is finding out with its long-term disability policies. Most mainstream insurance plans are pretty competitive, however.  Homeowners and car insurance, for example, is sold widely and there are many companies in the business.  So rates are pretty uniform across the board.  Some companies claim in their advertisements that they can save you hundreds of dollars over another company's premiums.  In most cases, however, this really isn't true, unless you are comparing apples to oranges - a "cradle to grave" coverage versus a stripped-down high-deductible coverage.

So there isn't a huge amount of profit to be made in typical insurance coverage.  However, you can make a shitload of money selling long-shot insurance policies, mostly to poor and middle-class people.  These are policies where the payoffs are trivial or non-existent, and the premiums are pretty hefty.  And these policies are sold on fear - fear of death, fear of car repairs, fear of debt, or whatever.  What sort of policies am I talking about?  Well here are a few examples:
1.  Burial Insurance - I wrote about this before, "Life insurance for over 50" which is a ripoff.  They want to sell the idea that you can "leave behind" a legacy for your children, for only pennies a day.  But the amount of the policy is trivial - $5,000 to $10,000 or so, and the premiums, while advertised as being tiny, end up costing a lot of money per year - enough that if you simply put that money in the bank, you'd likely end up with more cash in a few years than the policy could pay out.

This is insurance sold to people who didn't save up money in life - people who are not sophisticated and think you can get something-for-nothing.   "No medical exam required!" they say.  So you can have terminal cancer and get a policy, right?  Wrong.  You have to sign a paper saying you don't have some serious illness, and if you lie about this, that is grounds for them not to pay out.  And guess what?  They'll find grounds not to pay out. 
Many of these companies are fly-by-night.  They sell a lot of policies, declare bankruptcy and then start over - leaving the policy holders high and dry.
In terms of bang-for-the-buck, it just isn't worthwhile.  Insurance companies are no fools.  They aren't going to sell life insurance to dying people.  But they will sell overpriced trivial policies to old people who have  many years left - and likely will stop paying on the policy before they die, anyway.

2.  Junk Car Insurance - I wrote about this before.  You sign up for car insurance and they tack on "rental car" coverage and "towing and roadside assistance".  The "rental car" coverage provides you with a rental car if your own car is wrecked.  Yes, it only costs a few tens of dollars a year, but the likelihood is, you won't get into an accident but once every 11 years or so (on average).  Add up the money here and you can see the car insurance company is coming out way ahead.

On car discussion groups, I read about people who get into a wreck and then bitch that the insurance company didn't provide them with a "comparable car" (usually comparable to their BMW).   To them, it is an outrage they have to drive a Chevy Malibu for a week while their car is in the shop.   There are more important things in life, I think.  And wrecking your car should not be like an all-expenses paid spa vacation.   And if your own insurance is paying, odds are, you were at fault, and thus you should be contrite and take the fucking bus to work or get a ride with a friend (which you probably should be doing anyway, rather than travelling alone in a car).

The towing insurance falls along the same line.  They sell this on fear - fear you will break down on the road on a dark and windy night, and since your credit cards are all maxed out and you have no money in the bank, what will you do?  Of course, if you have AAA - which is usually cheaper than towing insurance, they will pay to tow your car.  The only time I have had a car towed in the last 30 years, I used AAA and it was no big deal.

Bear in mind that if you have a new car or a "certified pre-owned" car, you may have roadside assistance included.  That is the most profitable insurance of all - insurance that insures something that is already insured!  The beauty of towing and rental coverage is that most people don't even know they have it, and thus when they need a tow, they get out their wallet and pay and never think to bill the insurance company.  Or they use AAA or their car company's "free roadside assistance" and don't need the towing coverage.

Like I said, many companies - even GEICO - add this on to policies without asking.  GEICO at least itemizes this on their website, and a simple click of a mouse and remove it from your policy.

3.  Extended Warranties are really a form of insurance. Yes, they are a contract - so is insurance. You are betting your car is going to fall apart, and the warranty company is betting it won't - or they will be out of business (it happens) before they have to pay.  Again, these policies are sold on fear to people who don't have two nickels in the bank (because they buy junk insurance!) with the argument that "a new transmission could cost $10,000!  Paying $5,000 for this warranty is a bargain!" which might be true if your transmission fails under warranty, they pay out a claim (after you've followed the esoteric procedures and filled out all paperwork correctly) they are still in business by that time (many third party companies go belly up, by design, every few years).

But most cars don't fall apart, so you pay $5,000 for.... nothing.   It is pure profit to them and no benefit to you - or rarely one.  My own experience with this is illustrative.  I bought a boat from a guy who bought a third-party extended warranty.   It was "transferable" and I sent in the paperwork with the $100 transfer fee.  The output coupling on the engine broke, and I called the company, wrote to them, sent certified letters, etc., and they simply refused to respond.  My only option would have been to go to court and sue them for a $3,000 repair, which would have cost more in attorney's fees to prosecute.

Even if I could have gone to small claims court myself, collecting from the company - located in another State - would have been difficult and costly.   I just counted myself lucky that I didn't pay for this policy and kicked myself for even sending in the $100 transfer fee.  With factory-backed warranties you at least have a shot at getting repairs paid for.  But they aren't cheap, which is why the fly-by-night people offer lower prices and get suckers to sign up (these are the types of folks who call you on the phone with dire warnings that your warranty is about to expire).

4.  Loan Insurance - My credit union used to sell this.  They are supposed to be on your side, but they can't turn away a surefire income generator.  The gag is this - you borrow $10,000 for a used car loan, and the loan officer, at closing, says, "suppose you die before the loan is paid off?  What then?  For only a few dollars more a month, you can get loan insurance that pays off the loan!"

Again, they use fear to sell these kind of policies.  But what is the real danger?  That your car - a depreciating asset you no longer need (you are dead) will be repossessed and your credit rating destroyed?  Again, you are dead, so who cares?  And the odds of a young, healthy person dying in the 4-5 year term of a car loan are nearly nil.  For the price of loan insurance, you could buy a term policy with five times as much coverage, whose payoff would not decline over time.

And yes, I signed up for "loan insurance" when I was younger - in fact, twice.  I was an idiot.
The list goes on and on.  The bottom line is these types of junk insurance are sold based on fear - the fear that you will have an "unexpected expense" at some point in the future, and since you are living "paycheck to paycheck" you won't be able to handle such expenses.   But of course, one reason you are living "paycheck to paycheck" is that you are making bonehead financial decisions like buying junk insurance.

And I guess for a lot of people, this is the only way they think life can work.  They will never have money, because a dollar in their pocket is a dollar spent, and of course, they borrow a dollar more. Insuring against every trivial possibility is, in a way, a sort of perverse forced-savings plan.  If they didn't purchase this junk coverage, they would spend the premium money on more toys or take-out meals.  They would not put it aside for a rainy day fund. And statistics show this to be true - a staggering number of Americans have nothing set aside for a rainy day.

Does this mean you don't need any insurance? Of course it doesn't - and I hate it when people take things to extremes.  When you own something that you can't easily afford to replace, then you should insure it.  And you should insure open-ended liabilities.  Of course, one way to save on insurance is to own less things or own less expensive things.

Your house is an expensive item, so yes, homeowner's insurance is necessary.   But whether you need a low- or no-deductible plan is another question.  I try to use high deductibles to keep my premiums low.  I am not interested in insuring trivial things, like a broken window, but big things, like a house fire or a hurricane.   You'd be surprised how many people choose the former and then regale folks with how they got a "free window" out of the insurance company. Myself, I would just go to Home Depot, order a new window, install it myself, and pocket the difference between the cost of that coverage and the cost of the window.  Again, insurance companies are not going to pay out more than they take in, and if you file a lot of claims, expect your premiums to rise.

And that is one reason why higher deductible plans are so much less expensive.  They know you are not the type to waste their time with spurious and trivial claims. You just want catastrophic coverage, which is really all you should need.  Bear in mind your mortgage company may require a lower deductible, so check with them before making any changes.

Liability insurance is a biggie.  But again, since most Americans are broke and living "paycheck to paycheck" they have little in the way of real liability.  Once you have money and equity in your home, you have something to protect.  And again, insurance here is protecting your assets from attachment in a lawsuit.  Most plaintiffs are happy to go after your insurance company, who will quickly settle, than to try to take away your house and car.   This is one area where most folks don't think too hard.  They get minimal coverage, even though coverage is cheap.  An umbrella liability policy of $1M or more can be had for a few hundred a year.

With cars, it gets trickier.  Yes, if you have a new car costing tens of thousands of dollars, you may need collision and comprehensive coverage.  If you have a loan on said car, the bank will require you to have it - and require fairly low deductibles sometimes ($500 usually).   Sometimes the bank or loan company will accept a higher deductible ($1000) and this can lower premiums considerably.  But there does reach a time where you have to evaluate whether this coverage is still needed.

I have friends who have hoary old cars with over 250,000 miles on them.  These are cars from the 1990's and the "book value" on them is about $500 or so.   If you get into even a minor wreck with a car like that, the insurance company will write you a check for the book value, minus the deductible, which in this case would be.... zero dollars.   Even if the car books at $1000, all you can expect is $500 or so.  They are not going to spend $5000 repairing a $500 car.  So spending even $50 a year on such coverage is probably a waste of money.

Again, you have to do the math.  If you are young and have a shitty driving record, you may have no choice.   Collision insurance may cost you thousands a year - for a car worth only thousands.  What's the point?   You might as well just put that money in the bank towards your next car - the insurance company seems certain you are going to wreck the one you have.  In other cases, it gets tricky, and again you have to make a judgement call.   But as I noted in earlier postings, a lot of poor people will spend a lot of money insuring older cars for collision and comprehensive coverage, based on fear.   "What will happen to me if my car is wrecked?  Where will I go?  What will I do?"   So they spend more on insurance, over a period of years, than the car is worth in resale value.   It makes no friggin sense, but then again, that is why poor people are poor - they do shit that makes no friggin sense whatsoever.

Your life is something that might be worth insuring, again depending on your life circumstances.  If you are young and staring out and making a good salary and have a wife and kids who depend on that salary, a simple term-life policy might be a good idea.   If you are killed in a car wreck (as happened to a friend of mine, right after I persuaded him to buy a term policy!) it will pay out to your widow, which can help with expenses after you are gone.

But over time, the premiums will creep up - as they did with my term life policy.   Eventually, the odds of you dying reach 1:1 and the premiums reflect this.   By the time you are 50 or 60 years old, the premiums are very steep.  And by then, you (hopefully) have some assets so that your next of kin can get along without you.  At that point, it might make sense to drop the policy.

Whole life, I've gone into detail before.  As an investment vehicle, it pretty much sucks.  I ended up converting my policies to "paid up" status and others to use dividends to pay premiums, so they are self-funding.  The total premiums every month were killing me, financially, and I simply couldn't afford to keep paying.  I would have been better off, in retrospect, putting that money into a 401(k) or IRA account, but at least I put the money into something, as opposed into more toys and restaurant meals.

But other than those three - home, car, life, (and liability) - there really is no need for insurance, in my opinion (which may be wrong) other than, of course, health insurance - but that's a whole 'nuther can of worms.   

Tuesday, February 22, 2022

Pickup Truckers

A pickup truck is not a "truck".

The Canadian "Trucker" protests are winding down, mostly because people have to go to work and no one really cares about mask and vaccine mandates.  It is all manufactured controversy and a few useful idiots being egged on by social media, funded by right-wing operatives in America and the Russian Internet Research Agency.

And the "truckers" - most don't even own a truck.  They own a pickup truck.  Real truckers know that every minute a truck sits idle is money out the door.  You get paid by the load as an owner/operator, paid by the mile as a company driver.  So if you are not driving, you are losing money. Most don't have time or money for this sort of nonsense, hence why "trucker's strikes" in America never amount to much, other than minor local disruptions on occasion.

What was interesting to me was that a lot of the "truckers" showing up weren't actually truckers, or so it appears.  They were the sort of people who buy a four-door dually Ram diesel pickup as their personal transportation (often leasing them!) to commute to work.  You can spot these sort of posers as their truck bed never gets dirty and they have some sort of half-assed four-way ball hitch on the back, which is suitable only for towing only little gay trailers and runabout boats.  These sort of trucks are just penis enlargers - part of the culture of belligerence which seems to permeate the world today, not just the USA.

Of course,we can blame the bad actors behind the scenes who are pulling the levers of social media.  People like Peter Thiel, who is sponsoring a lot of this Trumpian nonsense or Vladimir Putin, who wants to divide and distract us while he invades neighboring countries.  This riles up a lot of people, and some of them are even truckers.  But Canadians, by and large, have gone along with the pandemic "restrictions" - immunization rates are over 80% and rising, so this "protest" doesn't represent a popular uprising.

And like Antifarts before them and Qanonsense idiots storming the capitol, rioting is not protesting.  Protesting is marching with signs and shouting slogans.  It isn't blocking roads, setting fire to a McDonald's or assaulting police officers and vandalizing the Capitol.  When they started arresting these Bozos and towing their "trucks" away, most people cheered.

But it raises the question - in my mind, at least - who are these people who have so much time on their hands?  It isn't just "trucker" protesters, but the Wall Street occupiers, the Antifarts setting fire to Portland, and any other protester who has days, weeks, or even months to camp out and cause trouble.  Don't these people have jobs?

I suspect not. I suspect many of the "truckers" were these folks with pickup trucks, probably on disability for their obesity, spending all day on social media getting riled up.  Or they are folks who get so caught up in these social media rabbit-holes they forget their obligations to their family, society, and themselves.  The head of this "trucker" protest said, after one night in jail, that he "wants to go home" as jail was all mean and scary.  I mean, a Gandhi or MLK this guy isn't.  But it was the same refrain being repeated by the January 6th crowd.  They thought they were leading some great cause, but when the dust settled, they found their friends, family, employers, and customers no longer wanted anything to do with them. They lost everything they held dear - for nothing.

It is like these "Herman Cain Award" victims, who, on their deathbed, say, "shoulda got the vaccine!" but in the months prior, spent all their time on social media mocking "the sheeple" for wearing "a muzzle" and getting "the jab".

Or consider the "Pizzagate" guy who left his home, job, and family to drive to DC to free the imprisoned children in the basement of a pizza parlor.  Problem was, of course, there wasn't even a basement.  Too late, in court, he realizes he was manipulated and abused - by people on social media.

I guess these folks can't save themselves, so they engage in a hero-fantasy where they save the world.  Everyone will applaud them for their actions, in their fantasy minds, and those unseen people on Social Media (who for some reason, don't speak English very well) will applaud them for their actions.   Too late, they find out that no one will come to their rescue, and they've ruined their lives over nothing.

Consider the baby-faced kid who shot those protesters in Wisconsin.  Sure, he was acquitted on self-defense, and today the far-right is lauding him as a hero.  But where do you think his life is going in 10, 20, or 30 years when the spotlight is turned off and no one cares anymore - and people start to wonder about parents who let their kids go to protests and kids who illegally buy guns to "protect" a used car dealer?   Like Bernhard Goetz or George Zimmerman, their lives will fade to obscurity and not be enhanced, but detracted, by their actions.

Sadly, it seems this sort of thing isn't dying down just yet, but getting worse.  The culture of belligerence is turning into a culture of violence or even a death cult.  We are seeing people more willing to carry guns and use them.  People willing to beat the crap out of people they just don't like because of the color of their skin or their political beliefs or who they sleep with.  Sure, they are "isolated incidents" right now - or are they?  Assaults on Asian people are now an everyday occurrence.

What is frightening to me is that a whole generation - it seems - wants to be paid not to work.  They called it "guaranteed income" or some such bullshit.  We are seeing right now what happens when you have hoards of people with nothing to do all day long.  It is like the bread and circuses of Rome - the plebes had nothing to do all day long, so they needed to be entertained - and the government catered to them (quite literally) hoping they wouldn't revolt.  It is how a society rots from within.

Work is good for the soul and moreover it keeps people out of trouble, much as sleep keeps animals out of trouble for half the day and prevents them from being eaten by predators.  Life without work is life without meaning.  And maybe that is why these people who spend all day on social media feel the need to be a causista and be a "hero" to some stupid cause.  They desperately want their lives to have greater meaning, so they think that storming the capitol, occupying Wall Street, setting fire to Portland, or blocking the Ambassador bridge will "make a difference" and change their world.

But in each case, it hasn't.  In fact, each of these "activists" has set back whatever cause they had, through their actions.  The storming of the capitol on January 6th insured victory in Georgia for the Senate on January 7th.  No one has rallied to the causes of Antifarts or Qanonsense or whatever, as a result of these protests and criminal acts.  If anything, people have been repelled by them.

Maybe this nonsense will die down.  Perhaps Putin's invasion of Europe will unite us against a common enemy.  But not anytime soon.  Remember it was years after Hitler invaded Poland that people in the United States started to realize that fascism wasn't such a keen idea.  It may be years again, before a new generation of domestic Nazis realizes the same thing.

Monday, February 21, 2022

It Pays To Be Poor!

The standard deduction is about $25,000.  Earn more than that, and pay 10% or more in taxes!

In 2020, our income was pretty low.  A flood in the condo meant that our tenant didn't pay rent for three months. As a result, our rental income was a paltry $1000 for the year.  In addition, I had only withdrawn $25,000 from my 401(k) which in addition to some miscellaneous income meant that our overall income was about $28,000 for the year.  After the standard deduction (and business deduction) we ended up paying a few hundred in taxes.

For 2021, our income went up by $8,232 as our tenant paid rent all year, earning us $5000 from rental income (that is to say, net profit after expenses - overall rent was over $15,000).  In addition, I took $30,000 out of our 401(k).  As a result, our Federal taxes increased by $735 and our Georgia state tax increased by $473 for a total of $1208 in increased taxes on an $8232 increase in income. That's like a marginal rate of 14%!

Granted, this is still lower than the marginal rates paid by most working people.  We are in the 10% bracket, which is a nice place to be, after you put all that money in the 401(k) when you were working and in the 35% bracket (plus State!).

I had money left over in my after-tax savings account last year, so it wasn't like I needed to take $30,000 out of my 401(k) - the excess money was "wasted" in a matter of speaking, on excess taxes. On the other hand, I suppose I need to build-up my after-tax nest egg for that new roof or new driveway or other "emergency" need that might arise.  If I had to take all that money out in one year, it might boost me into a higher bracket.

Of course, people are puzzled as to how we live so well on so little (the mantra of this blog - no?) and the answer is, no debt.  It costs us about $1000 a month to pay for the house expenses (property taxes, utilities, minor repairs) and since we have no car payments, no mortgage payments, no credit card debt, no student loan debt, we can live on fairly little, in terms of annual income.  To most folks older than I am, the idea of being debt-free is alien - they all have pensions, car payments, and mortgages.  The 401(k) generation doesn't have that luxury.  Well, some do, but it is a good way to squander your income, paying it all to banks and paying higher taxes as well.  If we had to pull out another $24,000 a year out of our 401(k) to service a mortgage, well, it would push us into a higher tax bracket, which means we'd have to take out even more to pay the taxes - and more to pay the taxes on the more we took out to pay the taxes on the more we took out to pay the mortgage interest to the bank!

(It reminds me of when Oprah gave away Pontiacs to homeless people.  Suddenly, they had an income tax problem on a $25,000 car.  So Oprah gave them money to pay the taxes.  Fine.  Now they needed yet more money to pay the taxes on the money she gave them to pay the taxes on the car.  So she gives them that.  Now they need money to pay the taxes on the money she gave to pay the taxes on the car.  It is like a calculus equation - you can calculate the amount you need, it is a derivative!).

Debt-free is the way to be.  Sure, I could "make more" in the stock market - maybe.  But by not paying $2000 a month in mortgage interest to the bank, it is like earning $2000 a month in the most stable risk-free investment of all time.  Add in the tax savings and, well, you may be beating the stock market much of the time.

Of course, this only works when you are retired and taking money out of a 401(k). When you are younger, you have a huge income (let's hope) doing computer thingies and have a huge mortgage to service because you don't have a half-million in cash laying around to buy a house with.   You seek out those deductions - the IRA and 401(k) and mortgage interest - to reduce your tax bill. If you are really clever, the depreciation deduction on income property may help even further.  Sadly, we've fully depreciated our last remaining income property and only have Capital Gains tax to look forward to - but there are ways of avoiding even that!

But if you can work toward paying down and paying off that debt, when you retire, well, you are sitting in the proverbial catbird seat.  I'm not saying you have to live on $30,000 a year - that is something I choose to do (quite frankly, as I noted above, I am having trouble spending even that - but this too, shall change).  But the less you have to pull from your 401(k) the better off you are, in terms of tax bills.

And that was the whole bleeding point of the IRA and 401(k) - you pay in during a time in your life when your tax rate is 25% or more and avoid taxes on that money.  Take it out at a time in your life when your tax rate is 10-15% or less.  Cheat the tax man - legally!

What makes no sense is taking money out of your 401(k) and paying 30% or more in taxes - sometimes more than what you were paying when you were working.  And yet some people do just that.  Probably shoulda had a Roth IRA instead, I guess.

I already took out $30,000 from my 401(k) (which is actually a rollover IRA at this point) for 2022.  In retrospect, I should have done this in tranches (a trendy word, no?) and thus limited my tax bill in 2023.  Worse yet, I may lose my phone subsidy next year!

Now I just need to figure out how to get that big slab of gubment chee...

Sunday, February 20, 2022

Obamaphone versus Bidenphone

If your income is low enough, you may qualify for free or subsidized phone service.

I keep getting text messages from AT&T exhorting me to apply for "ACP" which stands for "Affordable Connectivity Benefit" which is different than the "Lifeline" (Obamaphone) service offered in the past (which continues today as well).  Lifeline offers free phones or tablets and free service and is available to people making less than 135% of the poverty line or about $23,000 for a family of two.  ACP provides discounts for prepaid wireless phone service and internet broadband service, and is available for people making less than 200% of the poverty line, or about $34,000 for a family of two.

ACP which started December 31, 2021, replaces the Emergency Broadband Benefit (EBB) program, which was enacted during the pandemic to help people stay connected.  Just to remind those late for class, this nonsense all started back during the Reagan era, when people were literally dying because they could not afford a basic dial phone to call 911 with.  Phone service was like $30 a month back then (which was a lot of money in the 1980's!), so they created a poverty base rate of $10 a month, which allowed you to make limited local calls (in your own county - long distance meant something different back then!) and of course to 911.  Over the years, it morphed into a cell phone service (as landlines died off) and conservatves derisively referred to it as the "Obamaphone" which I talked about before.

So, no doubt, the Rush Limbaugh types will call ACP the "Bidenphone" plan.  Just wait for it.

The discounts are pretty decent, but you can only get one discount per household.  More information can be found at   One trick to applying is to apply only for the program you want - Lifeline or ACP.  I mistakenly clicked on "Lifeline" not knowing the difference between the two programs, and it locked me out of the ACP program (I did not qualify for Lifeline, based on income).

I had to call their help number (1-833-511-0311) to get the Lifeline application "closed" so I could apply to ACP.  I filled out the ACP form, uploaded my 2020 tax return and we'll see where it goes. They said they'd get back to me with results.  My 2020 income should qualify me.  I am not sure about 2021 income, but I have not filed that return yet.

I will update and see what they say.  (UPDATE: They approved the application in less than an hour!)  It is interesting, but the less money I make, the less money I need.  I am sure some economists would point out that this actually discourages people from making money and rewards poverty.  And like so many other government programs, it is based on income, not on overall wealth.  Yes, in theory, millionaires could collect food stamps - but they are closing that loophole, State by State.

UPDATE:  I went on the AT&T website ( and one of the options is for a 100GB hotspot for $25 a month with the $30 subsidy (!!!).  Me likey!  I will dump the hotspot coverage from our phones and use a dedicated hotspot device instead.  This may mean I have to buy a 5G hotspot device, of course.

I filled out the form and AT&T will supposedly call or text me in 48 hours....

Here is some more information from the ACP website:

What is the Affordable Connectivity Program?

The Affordable Connectivity Program (ACP) is a Federal Communications Commission (FCC) program that replaces the Emergency Broadband Benefit Program (EBB Program) to help low-income households pay for internet service and connected devices.

If your household is eligible, you can receive:

  • Up to a $30/month discount on your internet service
  • Up to a $75/month discount if your household is on qualifying Tribal lands
  • A one-time discount of up to $100 for a laptop, tablet, or desktop computer (with a co-payment of more than $10 but less than $50)

Only one monthly service discount and one device discount is allowed per household. To receive the connected device discount, consumers need to enroll in the ACP with a participating provider that offers connected devices (Note: not all internet company offer device discounts.) The internet company will provide the discount to the consumer.

The table below reflects 200% of the 2021 Federal Poverty Guidelines.

Household Size48 Contiguous States, D.C., and TerritoriesAlaskaHawaii
For each additional person, add:$9,080$11,360$10,440