Another trip around the sun

Today marks another trip I’ve made around the sun (outside of my mother’s womb anyway…did you know Koreans celebrate their birthday 9 months before they “emerge”?  Fascinating…).

I’ve done a lot of long posts here, so I’ll keep this one short.

This past year has been a great one.  Way more good than bad to the point that I can only hope this next year comes close.  For this next year, I hope that there is alignment between my thoughts, feelings and actions more often than not and that the energy motivating all three is more often love than fear.

Ponderous, really ponderous…and trascendent

A few quotes that have my attention today.  The first an from  an old, dead, smart Greek guys.  The middle on from an old, dead, smart nun. The last one from an old, alive, smart (but scary) American guy:

And what is my sort? you will ask. I am one of those who are very willing to be refuted if I say anything which is not true, and very willing to refute any one else who says what is not true, and quite as ready to be refuted as to refute-I for I hold that this is the greater gain of the two, just as the gain is greater of being cured of a very great evil than of curing another. For I imagine that there is no evil which a man can endure so great as an erroneous opinion about the matters of which we are speaking and if you claim to be one of my sort, let us have the discussion out, but if you would rather have done, no matter-let us make an end of it.

- Plato, Georgias

The argument is conducted in a spirit of inquiry and love and truth.  If, in the course of the discussion, one disputant sees that the opponent’s view is true and that whoch he has advanced is false, he may be justly said to have won the argument because he has gained truth, which, he know sees, his opponent had at the start

- Sister Miriam Joseph, The Trivium

Imagine if this is the way people you knew looked at being proved wrong in an argument…

The process of automation that began in England two hundred years ago—and continues today at an ever accelerating pace (as per the Law of Accelerating Returns)—eliminates jobs at the bottom of the skill ladder and creates new ones at the top of the skill ladder. Hence increasing investment in education. But what happens when the skill ladder extends beyond the abilities of the bulk of the human population, and ultimately beyond the ability of any human, educational innovations notwithstanding? The answer we can predict from the Law of Accelerating Returns is that the ladder will nonetheless continue to reach ever higher, implying that humans will need to become more capable by other means. Education can only accomplish so much. The only way for the species to keep pace will be for humans to gain greater competence from the computational technology we have created, that is, for the species to merge with its technology.

Not everyone will find this prospect appealing, so the Luddite issue will broaden in the twenty‐first century from an anxiety about human livelihoods to one concerning the essential nature of human beings. However, the Luddite movement is not likely to fare any better in the next century than it has in the past two. it suffers from the lack of a viable alternative agenda.

- Ray Kurzweil, The Age of Spiritual Machines

This last one is timely with Transcendence opening tomorrow.  I agree with Kurzweil on the “why” education is the way it is and that it needs to change to meet modern needs.  Not sure I want to wire up a computer to my brain as the answer to the problem though)

Three way on tax day

 

three-way

Note those of you that clicked on the link thinking of another kind of three way, this was the kind I was thinking of when I wrote it.  Pictured: food of the gods, a skyline three way chili-cheese-spaghetti

(Note: I had every intention of getting this post out on “Tax Day”, which of course is not today…life got in the way, but I think it’s interesting enough to still post today…the “Day After”)

I was admittedly a little grumpy today.  For a second year in a year in a row I owed “extra” federal income taxes.  Of course I had figured this out sometime back in February, but today was the day that I was actually separated from my money.  It wasn’t too much as a percentage of what I had paid overall (if it had been I would have owed a penalty of course), but it was still enough to make make me grumpy that I no longer had it.

In between my bouts of yelling “get off my lawn” at imaginary kids, I did wonder a bit about what the money that I had been separated from was going to be used for?  So I took a look at the national budget (that’s what everyone does when they have questions like this….right?).  I started by trying to use primary sources, but quickly found that government websites are less than user friendly…so I let the great folks at Wikipedia give me the data in a form I could understand and do something with.

Since the 2014 budget is still just a projection, I looked at 2013 numbers – they are literally and figuratively “in the books”.  In 2013 to US Government spent a total of 3.45 Trillion US Dollars.  That would be $3,450,000,000,000.00.  About a quarter of that was spent on health and human services (including medicare and medicaid), nearly as much on social security and then about 18% on defense.  So my money was most likely being spent on healthcare for someone else, retirement for someone or missiles for someone else (at least for now they are for someone else…).  I guess I shouldn’t be so grumpy since I’m going to have really good karma, what with being so generous and all.

Having answered my initial question, I started to wonder where the Federal government actually got a hold of that much money?  The amount debited from my bank account last year on this date was less than 0.0000002% of that, so where did the rest come from?

As I have already mentioned I paid a majority of my tax bill throughout the year (based on the idea that the pain is less if equally distributed I supposed).  If I factor in the total amount that was extracted from my income in 2012, I personally contributed less that 0.000002% (lopped a zero off) of the 2013 spending.  What could I possible have to be grumpy about – its such a small contribution.  Leaving the issue of my selfishness alone for a moment, I still wondered where the rest came from?

Of course I wasn’t the only one grumpy yesterday or a year before yesterday- I bet a lot of you were too.  Altogether we paid in over 1.3 Trillion US Dollars in individual Income Taxes and another 947 Billion US Dollars in Social Security (which despite Al Gore’s calls for a Lock Box still just goes into the general fund every year) for a total of 2.26 Trillion US Dollars.  Now we are getting somewhere – that accounts for more than 2/3rds (66%) of the overall expenditures.  Getting closer for sure, but where does the rest come from?

Well there is corporate tax of course (which is just another way of taxing individuals – anything the business has to pay gets passed along to their customers of course) which was a little more than 273 Billion US Dollars in 2013.  Throw that in and we have almost 74% of the bill covered.  Then there are excise taxes and “other” income.  What are excise taxes and who pays them?  You guessed it: you and me.  Every time we fill up our gas tank or buy a beer we pay excise tax.  Other includes things like rent from various properties the US government owns.  Together those totaled another 237 Billion US Dollars, which gets us almost, but not quite there.

Taken altogether individual income taxes, social security taxes, corporate taxes, excise taxes and “other” covers a little more than 80% of what the total expenditures.  Where did the rest come from?  The answer is the same place it comes from when you or I are a little short at the end of the month – it gets borrowed.

The Federal Government doesn’t have a VISA or MasterCard, so instead they sell bonds.  At various times throughout 2012, the Treasury department issued bonds at an auction.  The auction actually determines the interest rate at which the bonds are sold (rather than the of the price).  Like bonds from corporations and municipalities, the interest rates on government bonds are an indication of risk.  A low interest rate indicates a sure thing whereas a high interest rate includes a necessary risk premium.  So what have the interest rates looked like over the last few years?  Back to google which sent me over to treasury.gov (Wikipedia didn’t have an entry with the historical data that I could find):

10year

 

If low rate equals low risk, this data would indicate that the Federal Government has become a lower and lower risk over the last 15 years.  I’ve never been to a fed auction so I can’t say exactly what factors that bond buyers have been using in their risk calculations.  But I have been involved lending/borrowing transactions (always on one side of the equation) and there are typically three factors used to determine the risk of an individual borrower: income, debt and assets.  The first two are pretty easy to find:

debt_v_income

 

The red line shows the average total income per year from all the sources I listed above over the last 15 years.  Two trillion a year is a pretty good income line, but its not growing all that much year over year.  Not so much of a risk, but not a real positive either.  The blue line is the cumulative debt, which is a clear negative risk indicator.

So of the two factors I could find easily, one is neutral and one is negative.  That must mean that the one I couldn’t find easily, assets, must be a huge positive.  National Parks are nice, but could they really overcome a 9 to 1 debt to income ratio?  I think not.  Maybe its all the military hardware we’ve accumulated since WWII?  Based on the prices at the last surplus auction if this is what they are counting I don’t think that’s it either (of course there weren’t any Trident subs or Abrams tanks up for auction).  The gold in Fort Knox?  Even the most ardent support of the state doesn’t believe that’s there anymore.

My guess is it comes down to two things: the security of the income and the power of the (printing) press.  The red line in the chart above shows that while the income isn’t growing all that much, it is a very secure income stream = it’s not going away…maybe there is some value in that military hardware after all.  Then there’s the printing press (I know its just a computer entry)…that has to loom large in most risk calculations.

To summarize, your three way for tax day is this:

  •  I think we have a pretty good idea (black budget projects excepted) how much they are spending and what they’re spending it on.
  • We have an even better idea of where they are getting it from – taxes, taxes and borrowing.
  • The question I don’t have a solid answer for is why can they keep borrowing to make up the difference, especially at such low rates when all easily discoverable indicators would put them in the high risk category?  Having a solid answer to this question would lead to some pretty interesting next questions.

Two stories from Nevada

Although it hasn’t gotten nearly the media coverage it deserves, most everyone is at least somewhat aware of what’s been going on in Nevada between Rancher Cliven Bundy and the BLM.  If you’re not part of the almost, the short version is that the BLM claimed that Rancher Bundy’s cattle was grazing on “their” land illegally and Rancher Bundy claimed that the BLM was managing his grazing land illegally.  Push almost came to shove before the BLM (and some very operator looking fellows) decided to pull up stakes (for now) and head back to whatever mall ninja shop they hole up in.

There are a few stories that have come out recently that are worth mentioning:

  • The “purge” of documents from public records that link Senate Majority Leader Harry Reid to a land scheme which would have enabled a Chinese company to put in a solar farm on the land currently occupied by Bundy’s cattle.  I am generally not a fan of the sensational sort of news that Alex Jones puts out, but I honestly think he and his team broke and important story here.  You might be tempted to dismiss the evidence as circumstantial, but the fact that the records have been purged, the land that the Chinese firm wanted to use for the solar farm is being used by Bundy’s cattle, the BLM was exterminating the tortoise before they were protecting it (the environmental version of “I was before it before I was against it”) and (the kicker), Sen. Reid’s son is a representative of the Chinese firm…to me it seems like a pattern.
  • Facebook blocking the video of the confrontation and eventual (for now) retreat of the BLM “solidiers”.  Unlike Mr. Jones reporting, I generally like what Ben Swann and his network have to say.  In this case, however, there is one sentence that made me question the perspective of the writer:

Facebook’s lean to the left becomes more prevalent as the days go on.

I’ve been questioning some of Facebook’s decisions about how they filter and promote content for a while now.  I really do think they are making  themselves less useful to me as an information source.  Every time I go there I wonder about all the posts from people and pages that I have said I am interested in that they are hiding from me because they think they know what I am interested in better than I do.  They are becoming what they replaced – the mainstream media.  But I think Mr. Lofti (writer for benswann.com on this article) misses the point when he says that Facebook is leaning to the left when the censor this kind of content.  Where they are really leaning is towards the state, regardless of which side of the same left/right coin gets to be king that year.

Bitcoin report: 1 week in

Not an in depth post today, but it’s been about a week since I dove back into the bitcoin pool so I thought I would quickly chronicle what I’ve done and what I plan to do next.

Bitcoin related stuff that I’ve done in the past week:

  • I finally read the original whitepaper.  I understood most of it, but it did make me take a note to learn a bit more about cryptography.  After reading it, I really appreciate the beauty of the approach and how it solves things like the double spending problem.
  • I setup accounts with two online wallet providers – coinbase and blockchain.info.  Quick view is that coinbase is very easy to use (anyone that uses payapl could figure it out) and the blockchain.info is very flexible (which of course makes it a little harder to use).
  • I downloaded and installed two desktop wallets – Hive and Electrum.  I read enough to know (or think I know) that its best (or at least most secure) practice to store a majority of your bitcoin in local wallets rather than online services.  I found out later these two are “light” wallets in that they use a remote service for the block chain instead of downloading it and using it locally.
  • I purchased some bitcoin on coinbase.  It was a direct debit of my bank account and took about 4 business days to clear.  In the week after I purchased it it dropped from $580 to $430…so I bought some more ;-).
  • I transferred some bitcoin from my coinbase account (after my purchase cleared) to my hive desktop wallet.  It showed up immediately, but took some time to move off of “pending” in Hive – I guess it was balancing things out of the remote
  • I made my first purchase using bitcoin. I bought myself a ticket to Porcfest, a couple tickets to the one pot cookoff (my son is coming with me – he got a ticket for free to the event itself since he’s 13) and a t-shirt.  There was an option to login to coinbase directly and pay, but I used the payment address to send coins from my desktop wallet to see how it works for most users.  It was pretty easy overall but I have no idea how my push was connected to the purchase.  I was in one window to buy the tickets, clicked purchase and was presented with a bitcoin address to send my payment to with a warning that I had 10 minutes to complete the transaction.  I went to my wallet, pasted in the address and typed in the requested amount of bitcoin.  Almost instantly the cart page gave me a success message.  Pretty cool.
  • I listened to a podcast I was already subscribed to that did an episode on bitcoin and as a result subscribed to a new podcast that is all about bitcoin.

Bitcoin stuff I want to do next:

  • I’d like to find a good wallet for mac that actually downloads the full block chain.
  • I’d like to understand how paper wallets work.
  • I’m going to dig deeper into altcoins and specifically “token” systems like LTBcoin.  I think “token” systems could be huge – an actual monetization of social currency.
  • I’m also going to look into NXTCoin.  I don’t think its actually an altcoin (not sure its a meta coin either) – rather its takes a completely different approach than bitcoin for mining (proof of stake vs. proof of work).  That will of course force me to figure out what proof of work and proof of stake (and all the other “proof of” concepts that are out there) actually are and how they work.
  • I’d like to execute a face to face bitcoin transaction.  There is a coffee shop in Covington that takes bitcoin.  Coffee sounds like a perfect first thing to buy.
  • I’m going to try to find out what is being done to develop analogs to existing financial services like lending.  Seems to me there could be some interesting models built as mash-ups of micro-lending and crowd funding, all without intermediaries of course.
  • I am going to download a namecoin wallet and transmutate some bitcoin into namecoin which I’ll use to register a .bit domain to then route to my blog and/or my home server as a backup to my blog.

After a week in, I have literally just seen the tip of the iceberg.  But its interesting enough to keep sailing.

How you measure things decides what things you will do: food, health and cars.

Another podcast inspired post.  I discovered Tom Woods recently from a Facebook fan page on homeschooling (he’s coming out with a pretty interesting history course for the Ron Paul curriculum) and subscribed to his podcast.  I listened to a few episodes on the way to work today (nice that they are only 30 minutes long) to get a sense for his show (so far so good).  One episode that caught my attention was an interview with Joel Salatin.  In the interview he says around the 6 minute mark that “the US spends less on food per capita than any other country and more on healthcare”.

That struck a cord with me since I’ve been doing some thinking lately on how much the way we measure something impacts the choices we make.  There is the old saw (from either Hewlett or Packard I think) ‘what get’s measured gets done’ and while I think that’s true, I think what is more valuable to understand is that the way things are measured determine what gets done.

Before looking deeper into the choices most Americans are making about healthcare and food, lets look at another example: the cars that most Americas choose to drive, or more specifically the fuel their engines use.  I purchased my first diesel passenger car nearly 9 years ago, a 2006.5 VW Jetta TDI.  A year later, I bought a (used) 2000 F-250, also a diesel vehicle.  Just a few years ago I purchased a MB E320 Bluetec for my wife, completing the conversion – every vehicle my family owns is an oil burner.

When most people find this out, they usually ask me something along the lines of ‘isn’t that expensive?  Diesel costs way more than gas.‘  My answer always consists of some form of the following:

  • Yes, diesel fuel does cost more than gas – anywhere from 10-30% more (as I type this, my local corner gas station has 87 octane for $3.49 and diesel for $4.09 = 17% price differential).
  • The Jetta is available in both a gas and diesel edition.  According to published numbers the 2006 gas version got 22 MPG city and 30 MPG highway = a straight average of 26 MPG.  According to the same numbers the diesel version gets 36 MPG City / 41 Highway = 38.5 MPG average (although I regularly get 42-45 MPG).  Using the standard numbers, the diesel version gets 48% more MPG than its gas cousin.
  • Since I really don’t care how much it costs me to fill up, but rather what it costs me to go a mile.  As long as diesel is no more than 48% more expensive than gas, its actually cheaper for me to have diesel cars than gas if I measure things based on what it costs me to go a mile vs. what it costs me to fill up my tank.
  • And this is to say nothing of the time I save by only filling up less often (it adds up over the life of the vehicle), the lower maintenance costs (oil changes only every 10K) and the longer service life of the vehicle (I have 225K on my TDI, 213K on my F-250 and nearly 100K on the MB…and they are all running like tops).

So back to food and healthcare.  Although I have every reason to trust what Joel said on Tom’s podcast, I also have an inquiring mind and access to google so I set out to get some more detail on how much Americas spend on food vs. healthcare.  A few quick searches and downloads, followed by some spreadsheet work and I arrive at this:

foodvhealthcare

 

 

 

 

 

 

 

 

 

The red lines shows the % of income spent by Americans on food since 1995.  The green line shows the % spent on health care in the same time period.  I was able to find data for income and health care spending that was already inflation adjusted to 2005 dollars – I had to use an inflation calculator to adjust the food spending data from inflation adjusted data normalized to 1988.

In the 17 years between 1995 and 2012 the % of income Americans spend on food has dropped 1.8% while the amount they spend on healthcare has increased 3.8%.  Nearly every percentage point of income less we spend on food means a two point increase in the amount we spend on healthcare.  I am not trying to confuse correlation with causation – however I’ve made the decision to measure things a little differently here too: its not the cost of a meal that I am most worried about – its the effects, both near and long term that matter most.

I make the choice to spend more on milk straight from a farmer because I know that it makes my family healthier.  I make the choice to spend 2-3x on grass fed beef because I know that it has a far better nutrient profile (not to mention is a better cared for animal).  I make the choice to grow some of my own vegetables and get the rest from known, local sources because I know that my body is setup to eat non-GMO foods that aren’t sprayed with chemicals.  All of that costs me more when measured in dollars – but far less when measured in terms of things that actually matter.

 

Fool’s news

Reading the news is a rather interesting venture on the first day of April.  There are reports of Russia annexing Alaska, recipes posted about cooking eggs in urine and of course a whole bag of tricks from Google.  I will admit that one of the links in the previous list actually got me.  All of them together got me thinking about reading the news on any other day…

I’ve been (slowly) making my way through The Trivium (non affiliate link…just there for your convenience) as part of my quest to develop better critical thinking skills.  It hasn’t been an easy read and as is pointed out in the introduction, the difficulty it has given me is another sign of how much we have lost in the last century.  What was once a standard school text about a pretty basic life skill (thinking) is now not only nearly forgotten, but becoming unapproachable.

There is a quote from the book that I think is applicable here:

the human mind is made for truth and instinctively seeks the truth; that it often embraces error along with truth because it fails to distinguish the error that is mixed with the truth

It’s easy to avoid mistaking the “gotcha” stories put out on April Fools for “real news” because they always contain a little more error than they do truth.  But what about the other 364 days a year – when the error is scaled back just a bit and there is just a little more truth?  I think we far too readily accept those stories – error and all.

We all might be better off if we read “news” every day like we do today – with a dose of healthy skepticism and the assumption that someone is trying to fool us.  That may be closer to the truth than we’d like to admit.

Job creation (for my kids)

As a natural consequence of  trying my best to lead an online marketing team as my day job, being generally interested in all things tech and just being a nice guy, I get asked quite often to help people with their websites.  Sometimes its simply taking a look and making some suggestions, other times they have nothing and want to get started.  I do most of the work without pay – but there is value exchange: I stay sharp on what is really needed to make a site work – design, infrastructure, content, advertising, search, social, etc.

This past Friday my family and I went to the opening of a new restaurant right down the road from where we live.  Those of you that have been to my house or no where I live know that we don’t have many restaurants nearby, so when I heard about this one opening I was pretty excited – and when I found out they were focusing on local foods, grass fed beef and from scratch cooking I knew it was something that I wanted to support.

How do these two stories fit together? You might have noticed from the link I included to the restaurant in the previous paragraph that the restaurant doesn’t have a website – their online presence is hosted solely on Facebook.  This is a fine place to start, but certainly doesn’t give you as many options long term to manage your brand as a well constructed and regularly updated website.   I want to help them out, but honestly I barely have time for the sites I am running now, much less one more…what to do?

It hit me yesterday that there is another opportunity lurking here: getting my kids some practical job experience.  I could get the site setup, but then I would let them run it.  The owners could contact them for content updates, reports, etc.  I could help them out on things they didn’t know how to do, but it would be theirs to run and make successful.  It would teach them the responsibility of working for someone on a project (different than the relationship you have with a teacher that gives you assignments) and would also give them a real resume item to point to – “I built this”.  It would give the restaurant some cheap resources to get off the ground.  And I would have another outlet to stay in touch with what was happening.  And grass fed beef hamburgers with lamb bacon only minutes from my house anytime I wanted them.  Sounds like win-win-win to me.

I contacted the owners yesterday and am not even sure that they will want me to help them with my site, much less have my kids be responsible for the updates under my supervision.  But even if they aren’t I think this idea has legs – surely there are some local businesses that need some help that would work with me on a project like this?

Porcfest

I first heard about Porcfest a year ago or so on the Bad Quaker podcast.  Flash forward a year and I’m going to head up there for a few days in June.  Not sure what it’s all about, but I don’t think I’ll know unless I actually go, so I’m going.

Turns out the guy I heard it from needs some help in getting there, so if you are so inclined, throw a few bucks his way:

Help Ben Stone the Bad Quaker get to Porcfest!

http://igg.me/at/benstone-porcfest/x/5769470

IFTF event on bitcoin

I just missed signing up for an IFTF event on crypto currency (but the event videos look like they will be posted next week).  Just flipped through this slideshare deck from one of the presenters and saw a few interesting topics (specifically the “green” aspect of crypto currency vs. physical currency) and some points I have seen before (its a loosing proposition to be a miner at an individual level with the current difficulty level in solving a hash…that doesn’t make me want a butterfly labs jalapeño any less though…).

(PS – this is a little bit of a test…after my #bitcoin post yesterday my blog host got a lot of “love” from some machines in North Korea…seeing if lightening strikes twice).