My Texas Billboard Story. A lawyer advertising "Gun Trusts". What is a Gun Trust? Find out here. FASCINATING!!!

In December of 2011 I move from Texas (after living there for 27 years) to Illinois.

This weekend I am visiting Texas A&M in College Station.

On the drive from Houston along FM 105 I saw this sign (don't remember the town).  I have never heard of, or seen advertised, legal services to establish  a "Gun Trust". 

Of course, I was curious and had to find out what it was all about.

A trust is a legal entity where someone can place physical and/or financial assets and it (1) ensures continuity of ownership of the assets by the trust (not the "real owner" of the assets) and (2) keeps the assets from being subjected to the estate tax OR seizure from the government for tax purposes---the trust never dies!

But a trust confers some addtional benefits that will delight gun owners and irritate gun control proponents.

The National Firearms Act ("NFA") requires purchasers of certain categories of weapons (i.e. machine guns) to register them with the Bureal of Alcohol, Tobacco and Firearms ("BATF").

"All NFA items  must be registered with the Bureau of Alcohol, Tobacco, , and Explosives (ATF). Private owners wishing to purchase an NFA item must obtain approval from the ATF, obtain a signature from the Chief Law Enforcement Officer (CLEO) who is the county sheriff or city or town chief of police (not necessarily permission), pass an extensive background check to include submitting a photograph and fingerprints, fully register the firearm, receive ATF written permission before moving the firearm across state lines, and pay a tax"---Wikipedia
 

Don't want to do that? Too intrusive?  Then establish a  "Gun Trust" and place ownership of them in it. Note the significant reporting requirement changes:

"NFA items may also be transferred to corporations (or other legal entities such as a trust). When the paperwork to request transfer of an NFA item is initiated by an officer of a corporation, a signature from local law enforcement is not required, and fingerprint cards and photographs do not need to be submitted with the transfer request. Therefore, an individual who lives in a location where the chief law enforcement officer will not sign a transfer form can still own an NFA item if he or she owns a corporation("trust")"---Wikipedia.

So, a Gun Trust helps one shelter their weapons (specific ones) from taxation and seizure AND registration/scrutiny.

Now you will know the story of this billboard as well.  If you see it you can dazzle your friends with your new found knowledge.

You are welcome... :) 

Nice map showing each States level of taxation on a pack of cigarettes. I am quite surprised how LOW the taxes are in many States.

One way to discourage the consumption of a good that imposes negative outcomes on individuals, but perhaps more importantly on society at large, is to impose a tax on the good proportionate to the damage it creates. 

Cigarettes seem to be a good that is ripe for taxation of this sort.  As you can see from the map below the level of taxes imposed on a pack of cigarettes varies a lot across state lines.

Keep in mind the numbers you see are taxes levied by the each State.

There is also a $1.01 FEDERAL tax levied on a pack as well.  So, add that to the number in the map to get the total level of taxation.

Observations:  (1) Taxes in the tobacco producing States have VERY low State taxes on cigarettes.  Probably should be no surprise there.  Having said that, what is up with Missouri ("MO")?? Seventeen cents? (2)  States with low level of taxes on cigarettes are States known to have, in general, the poorest individual (and collective) health outcomes overall.  I am not suggesting low taxes on cigarettes are the cause...but it certainly does not help, it seems.



Source: KPC

Why do so many people start to collect Social Security benefits in January and so few in December? Nice graphs showing monthly data that prompt such fascinating questions!!

I was looking at Social Security benefit data and noticed a couple of things.  Below you will see the monthly (starting in 1995) Social Security benefit awards to both retired workers and their spouses. The long term trend line is in RED.

First observation:  Notice the tall shoots that tower above the trend line at predictable intervals?  EVERY ONE of those shoots marks January of the particular year.  Notice the shoots that go BELOW the trend line?  With a couple of exceptions, those are all Decembers.

I did a Google search and could not find a suitable answer as to why January is far and above the preferable month for people to claim benefits en mass.  Can anyone help me out?



Source: Created by Cara Hayward

Second observation:  the shoots above the trend line got larger in magnitude as time passed, and the shoots below, with the exception of the mid-2000's, got smaller in magnitude especially in the last couple of years.

Keep in mind, while the graph measures benefit awards in a given month, the totals will be cumulative of ALL those points.

Using the same graph above, I inserted lines to eye-ball averages that represent time spans and benefit award levels. Eerie, isn't it?  Nice stair step and duration almost predictable.

Hmm...Predictable.  Do you hear that politicians and policy-makers?  Why were we not ready for this?  Rhetorical question, I suppose...

Why the Labor Force Participation Rate might be falling. Where has everyone gone???

Lots of talk about why the "Labor Force Participation Rate" in the US decreased last month by almost 500,000 people. The 2 schools are thought are, (1) people are giving up looking for work and/or collecting disability compensation instead, (2) due to demographic shifts more people are retiring.

Below I crudely copied and pasted the latest beneficiary data from the Social Security Administration that shows the number of awards granted for benefits in March and February for (1) people eligible for Social Security benefits and (2) people eligible for Federal disability compensation.

The number of additional "Retired Workers" compared to February barely budged, as did total OASI awards (blue arrows)

More significant movement in "DI Trust Fund" activity (red arrows), however, as approx 21,000 additional people compared to February were awarded disability benefits.

Not enough, I don't think, to move the needle on the "leaving to retire" reason. There is some evidence that people moving to disability compensation and are no longer counted in the unemployment statistic. 

That leaves a lot of people unaccounted for the gap in the participation rate. 

Source:  Go to the SSA website to make your own custom graphs/charts

How much would you have to earn in a job in order to not take Federal Disability Compensation (assuming you qualify)? I do the math for you and ask: "What would YOU do in this situation?"?

This post comes as a result of thinking about the much discussed NPR story on the Federal Disability program and the real (or perceived) abuses.

I want to put the benefit amount recieved by qualified recipients in perspective.

The average monthly check a person receives from the Federal Disability program is $1,202.96 (Source HERE).

If this person were working and earning a wage, to earn this amount after taxes, they would have to make about $1,382.00 (I took $1,202.96 and multiplied by 1.15 to add on 15% in various taxes and deductions--this may be high OR low)

If this person were to work 4.3 weeks a month (on average) and work 40 hours per week, then that would work out to an hourly wage of $8.03 (40 X 4.3 = 172.  $1382/172 = $8.03)

Opportunity Cost.  Presumably, the incentive to "get off" Federal Disability compensation would require a nominal wage of AT LEAST $8.03 per hour, but it is probably much higher. This is assuming there are no addtional benefits being collected.  There are also additonal costs of going to work---transportation costs, clothing costs, daycare, etc that people have to factor in.

The minimum wage is $7.25 per hour (some States it is higher).

This is the choice people face. It is the incentive before them.

WHAT WOULD YOU DO?!?!?!?

The story of 7 million missing horses and mules in the 1920's and why it was a good thing for YOU today!!

I have really enjoyed reading some very old published reports on prices and other data from the 1920's and 1930's.

I found this gem in a 1930 report from the Bureau of Labor on the effect the transition from a horse and mule economy to a mechanized one (cars, trucks, farm implements, etc). 

Note the yellow highlighted numbers. During the decade of 1920 to 1930 the number of horses and mules used in cities and on the farm decreased by 7.037 million.  This freed up 18.5 million acres to produce food for human consumption instead of feeding those horses and mules.

For reference, the WHOLE State of South Carolina is 19.26 million acres.  So, in the decade of the 1920's alone there was the equivalent of the state of S.C. put into play food production to feed people rather than to feed  animals.

The usual story is that mechanization, especially on the farm, increased productivity in terms of food production as if the equipment itself produced those higher yields.

At least in the beginning, the fact that agricultural yields did not have to be used to "fuel"  animals and could instead head to market for HUMAN consumption seems to be a better explanation. The supply of food increased and decreased prices---a BIG DEAL!!



Source: HERE

Another great tidbit from this report is the suggestion that mechanization was a BAD thing for farmers AND people in general:

 LOL! I think history has answered that question!

 And this (sorry it is so small---Blogspot really stinks sometimes).  Notice the reasoning on why mechanization will produce negative results for agriculture:

And finally this:

Decorating Easter Eggs and feeling nostalgic? How much did eggs cost during The Depression era compared to today? I think you will find this interesting...

The idea for this blog entry comes from HERE, but I have wanted to use for a while the historical data from the link below.  Now is my chance!

Let's go back 80 years to the depths of The Great Depression and see how the price of eggs to make the traditional Easter decoration has changed.

A dozen eggs in 1933 cost 22.3 cents (source HERE and noted below from the document)


Source: HERE

Today, the US average for a dozen eggs is $1.93 (Source: CPI Detailed Report (complete text and tables) February 2013 (PDF))

In inflation adjusted dollars, 22.3 cents in 1933 would be $3.98 in 2013.

The $1.93 we would pay for a dozen eggs today would be the same as 11 cents in 1933. 

What people in 1933 would have given to get eggs half price!!

Eggs are a bargain TODAY compared to Depression Era prices.

If you are a teacher, THIS link is great for finding prices and wages from the 1920's and up.  A terrific way to teach inflation and standard of living.

Oppa, Kim Jong-un style...Here is my entry into the "Why Austin?" for nuclear annihilation. :)

Kim Jong-un and company. 



For my Aggie friends...

Nice graph showing the change in "Routine vs Non-Routine" jobs over time. If you are in the first category you need to look over your shoulder. See here why...

This graph blows me away (Source: AEI).  It shows over time, the change in the share of jobs that are "routine" or "non-routine" in nature. 

"Routine" jobs are ones that entail performing tasks that have become so standardized and simple they require very little skill to accomplish.  Labor contributes a relatively small amount to the overall value of the product or service created. They can be replaced by technology to perform the routine tasks or by low wage workers around the world.  

"Non-Routine" jobs are ones that require the labor performed to evolve and actively participate in creating a product or service.  Labor contributes a relatively large amount to the overall value of the product or service created.  Non-routine jobs depend on the use of technology and higher level skills (education) to create that value.

Technology and competition from low wage workers globally can be a substitutes for routine jobs.  Technology and higher level skills are complements to non-routine jobs.

Source: American Enterprise Institute

As you can see from the graph, this trend in the labor market has been going on for a LONG time.

How do we address and change this?  How do we get people to want to stay in school, get additional training, and constantly upgrade their skills to keep up in a changing world.

Dunno.  But seems like that is what we should think about as a country.

If your high school granted admissions on the basis of a single test what would the demographics look like? Well, NYC does this and the results are quite amazing. See the numbers here...

I did not know NYC did this for admission to various high schools. Quite extraordinary.

Here are the results of admitting students to select high schools in New York City based SOLELY on a competitive exam to get in (HT: Newmarksdoor).

—Stuyvesant offered admission to 9 black students; 24 Latino students; 177 white students; and 620 students who identify as Asian. 

—Bronx Science offered admission to 25 black students; 54 Latino students; 239 white students; 489 Asian students; and 3 American Indian/Alaskan Native students. 

—Brooklyn Tech offered admission to 110 black students; 134 Latino students; 451 white students; 960 Asian students; and 5 American Indian/Alaskan Native students.

Read more here:  Most Eighth Graders Matched to a High School of Their Choice

Read more on the use of a single test to determine admissions:  Debate of Single-Test Admissions Policy Divides on Access and Race

Immigration is a feature of a Market Economy not a bug. We need to get on the right side of this issue. Read here why I think so...

We need more immigrants, not fewer. The benefits, in my opinion, far outweigh the costs.  We just don't seem to be aware of (or acknowledge) the benefits as much as we do the costs. 

Shame on us for not measuring twice and cutting once. 

Please read this whole posting that the following excerpt comes from: Why The Red States Will Profit Most From More U.S. Immigration.

Most immigrants come to the US but they GO to work:

Over time, the immigrant impact may prove greatest in terms of economics. Immigrants, in a word, tend to be resilient, and opportunistic by nature. Although many immigrants and their offspring still lag behind economically, over time they appear to be integrating. Overall their rate of home ownership still lags that of native born Americans, but appears to have held up better since the recession. 

Nowhere is the impact greater than in the entrepreneurial sector. Between 1982 and 2007, the number of businesses owned by the primary immigrant groups, Asian Americans and Hispanics grew by 545% and 696% respectfully. In contrast businesses owned by whites grew by only 81%.

Perhaps more important still, even in the midst of the recession, newcomers continued to form businesses at a record rate, even as those by native-born entrepreneurs declined. The immigrant share of all new businesses, notes Kauffman, more than doubled from from 13.4% in 1996 to 29.5% in 2010.

 

Where are these industrious immigrants moving to and which political party should benefit from their presence?:

(In addition to #1 Nashville)...Other cities are equally surprising, including #2 Birmingham, AL; #3 Indianapolis, IN; #4 Louisville, KY and#5 Charlotte, NC, all of which doubled their foreign born population between 2000 and 2011. Right behind them are #6 Richmond,VA, #7 Raleigh,NC , #8 Orlando, Fl, #9 Jacksonville,Fl and #10 Columbus, OH. All these states either voted for Mitt Romney last year or have state governments under Republican control. None easily fit the impression of liberally minded immigrant attracting bastions from only a decade ago. 

 The Republican Party has the biggest incentive to appeal to these immigrant groups, but fails to do so.  

You can't be pro-business and entrepreneurship and at the same time hold harm against those same people, who also share those values, because of their country of origin.

We all fight our own battles no matter how insignificant... :)

Creating poor incentives: "The Startling Rise of Disability in America"

National Public Radio (NPR) has a terrific article (and graphs!!) on the rise in the number of people receiving Federal Disability Compensation.  It is quite eye-opening.

Seems like this program has resulted in TONS of un-intended consequences.

People have an incentive to lie and they are enabled to do so by government and other self-interested parties (read the part about the "disability-industrial complex"). 

It creates a lack of respect for a well-intentioned program and causes the rest of the population to be more cynical about government than is necessary.    

"...The federal government spends more money each year on cash payments for disabled former  workers than it spends on food stamps and welfare combined. Yet people relying on disability payments are often overlooked in discussions of the social safety net.  

People on federal disability do not work. Yet because they are not technically part of the labor force, they are not counted among the unemployed.

In other words, people on disability don't show up in any of the places we usually look to see how the economy is doing. But the story of these programs -- who goes on them, and why, and what happens after that -- is, to a large extent, the story of the U.S. economy. It's the story not only of an aging workforce, but also of a hidden, increasingly expensive safety net...."  NPR. "Unfit for Work: The startling rise in disability in America"

I encourage you to read it.  It is important for understanding the citizen-to-government relationship and how a breakdown in this relationship (mainly a lack of respect) is very harmful to the nation.

A little more information on why our main Federal budget issue will be Medicare, primarily, and Social Security in the coming decades. You gotta see these numbers, especially if you are under 25 years of age!!

A little more information on why our main Federal budget issue will be Medicare, primarily, and Social Security in the coming decades.

Here are the projected changes in US population from 2015 to 2030, just 17 years from now. (ATTENTION STUDENTS: this is right in the round house punch of your careers!!). 

Age 18 to 64
    Year 2015---199,150,000
    Year 2030---205,349,000

An increase in this age group of 6,199,000 or a 3.1% increase.

Age 65 and older
   Year 2015---47,695,000
   Year 2030---72,774,000

An increase in this age group of 25,070,000 or a 52.5% increase

In 2015 there will be 4.1 people between the age of 18 to 64 for every 1 over the age of 65.

In 2030 there will be 2.8 people between the age of 18 to 64 for every 1 over the age of 65.

That is a 31.7% DECREASE.

Data from US Census: Table 2. Projections of the Population by Selected Age Groups and Sex for the United States: 2015 to 2060

My short, in simple terms, take on why Medicare will continue to cost more and be a bigger part of the Federal budget for many years to come.

My short, in simple terms, take on why Medicare will continue to cost more and be a bigger part of the Federal budget for many years to come.

Let's use a very simplistic example to illustrate.

Assume there are 100 retired people receiving $100 per year in Medicare benefits.  The total cost for Medicare is $10,000 for year 1.

Assume in Year 2 we add 10% more retirees.  Now we have 110 retirees receiving $100 (assume no increases in prices) in Medicare benefits.  The total cost for Medicare is $11,000 in Year 2. 

Assume in Year 3 we add 10% more retirees BUT we cut the amount we spend on Medicare payments by 5% (arbitrary number I choose). Now we have 121 retiress receiving $95 in Medicare benefits. The total cost for Medicare is $11,495.

We cut payments ("saved" money!), but the overall cost of the program increased.

While we may be able to slow the "per person" payments (cost) for Medicare, the overall cost of Medicare is going to INCREASE because of the sheer number of recipients moving into eligibility for the program.  We may be able slow the growth in cost ("bend the cost curve") relative to projections, but we will not be able to make it less expensive overall. 

That is the reality.  That is the budget challenge, it seems to me. 

Ezra Kline (Washington Post) has a post on this topic (where I got the idea) and has this paragraph that highlights the issue for me:

"...There’s a reason that policymakers prefer to talk about health-care costs than old people. If the problem is just rising costs, then perhaps there’s some cost control “silver buller” — maybe premium support, or paying for quality rather than service — that will cut costs without hurting anyone. But if the problem is more people, then the answer, really, is higher taxes, lower benefits, more debt or some combination of the three..." (emphasis/underline mine)