It’s time to sit back, relax and enjoy a little joeâ€¦
Welcome to another rousing edition of Black Coffee, your off-beat weekly round-up of whatâ€™s been going on in the world of money and personal finance. Hereâ€™s what caught my attention over the past weekâ€¦
Blogs I’ve Been Following This Week
Afford Anything – Yo, Warren Buffett, Can I Crash on Your Couch? Hey, the next time you’re going to be in Omaha, Nebraska and need a place to stay — try sending billionaire Warren Buffett a post card asking if you can crash at his place. If you’re like Paula’s friend, Andrew, you might get lucky.
PT Money – 35 Christmas Gift Ideas for Under $35. This is a terrific list for those struggling to come up with holiday season gift ideas. By the way, I’ve got one more that PT can add to his list: $34.99. Well … it’s true.
L. Bee and the Money Tree - Two Savings Rules to Live By. Says Lauren: “I had a girlfriend who put away 10 dollars per week for four years and then went to Italy.” Uh huh. Are you thinking what I’m thinking? Why didn’t Lauren’s girlfriend just send Warren Buffett a post card asking about his Lake Como timeshare? Then she wouldn’t have had to wait so long.
Money Counselor - Do You Invent Needs? Are you the kind of person who will buy anything if the price is right, whether you really need it or not? If so, be sure to check out Kurt’s wise counsel regarding better ways to shop.
The Millionaire Nurse Blog – Hotel Rewards Clubs: 5 Reasons You Should Join. I originally thought this was a pretty smart article — but now I’m not so sure. After all, who needs hotel rewards clubs when there’s a chance you could stay anywhere in the world Mr. Buffett has a home-away-from-home for nothing more than the price of a post card? What am I missing here?
The Way-Back Machine: Past Posts Of Mine You May Have Missed
From December 2009:
How to Avoid Paying a Mandatory Gratuity for Bad Service – It used to be that tipping was meant to reward and encourage your server for exemplary service. Not any more. Especially, if you eat at a restaurant with a party of six or more.
Credits and Debits
Credit: Who says the economy sucks? According to the National Retail Federation, 247 million Americans visited stores and websites during the Black Friday weekend; that’s up 9% from 2011.
Debit: Then again, the Weekly Standard points out if that’s really true, then every American over 14 went shopping last weekend — including 40,397 Americans who are currently older than 100 years-old. I know.
Debit: And if you believe that, you probably also believe the US unemployment rate was only 7.9% in October.
Debit: You’d probably also believe that the revised third-quarter GDP estimate of 2.7% is the sign of a booming economy. Not even close. At best, GDP growth has been anemic since the stimulus bill was passed in early 2009.
Debit: Remember, GDP growth was just 2.0% for the first quarter of 2012 and only 1.3% during the second. In fact, GDP growth has only been above 4% once since the recession officially ended, as this chart shows:
Debit: Unfortunately, since the third quarter of 2009, GDP growth has averaged a paltry 2.2%. In a $16-trillion economy, that translates to, at best, just $352 billion in increased GDP from the $800 billion stimulus program.
Debit: So the stimulus provided a fractional economic benefit of just 44 cents on the dollar or, to put it another way, the government wasted 56 cents on every stimulus dollar it spent. Despite this, there are those pushing for additional government stimulus.
Credit: With poor returns like that, the economy would have been much better off if the US Treasury had simply cut 300 million Americans a check for $2667.
Credit: Yes, I’ve said this before: I still pine for the good old days, when US GDP growth exceeded 4% an astounding 15 times between the third quarter of 1983 and the first quarter of 1989, as this chart shows:
Credit: The big difference between then and now: the size and scope of the federal government in every aspect of our everyday lives. In this case, less really is more, folks. I ain’t sayin’. I’m just sayin’.
Debit: Instead of downsizing the federal government — and enjoying the truly significant cost savings and economic boom that would surely result — our politicians are fixated on raising revenue. There’s a reason for that.
Credit: While tax increases have never been able to curb Washington’s spending problem, over time, they do encourage further government expansion and even more reckless spending.
Debit: Some folks believe our politicians’ desire for additional revenue is so insatiable that current 401(k) and other retirement account tax benefits are now at risk. One thing is certain: the mortgage interest deduction is on the table.
Debit: Even Warren Buffett is still clamoring for higher taxes; a minimum tax of 30% on those making a million bucks and 35% on those earning more than $10 million.
Debit: Too bad the added revenue from Buffett’s proposed tax is so insignificant it would take 514 years to accrue enough funds just to pay off the 2011 deficit.
Credit: If that’s not vivid proof our debt is the result of too much spending as opposed to too little revenue, I don’t know what is.
Debit: Even so, 60% of Americans are still buying big-government politicians’ disingenuous pleas for “a balanced approach” that includes higher taxes on the wealthy. Unbelievable.
Credit: I’m still waiting for Buffett — who’s worth about $46 billion — to lead by example and cut a check for $45 billion to the US Treasury. How about it, Mr. Buffett?
Debit: Yes, I realize I’ve probably just lost any chance I ever had of getting free lodging from Mr. Buffett. On the bright side, I’ve still got Bill Gates, though!
By the Numbers
Ever wonder how much it would cost to buy some or all of the gifts in the 12 Days of Christmas song?
$107,300 Price for all 364 items mentioned in the 12 Days of Christmas song.
$24,431 Price for only one set of the core items, assuming you buy them in traditional stores.
$40,440 Price for same core set if you buy everything online. (But look at how much money you’d save in gasoline!)
6.1 Percentage increase in the price from 2011.
6 Items from the song that didn’t increase in price this year. (Maids-a-milking, ladies dancing, lords-a-leaping, calling birds, turtle doves and the partridge.)
$189.99 Price of a pear tree.
$165 Price for three French hens.
$750 Price for five golden rings.
$58 Price to rent eight maids-a-milking for one hour. Only the partridge was cheaper ($15) this year.
$7000 The cost of seven swans-a-swimming — the most expensive item from the 12 Days of Christmas. Just don’t tell the eight maids-a-milking.
Source: USA Today
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Letters, I Get Letters
Every week I feature the most interesting question or comment â€“ assuming I get one, that is. And folks who are lucky enough to have the only question in the mailbag get their letter highlighted here whether it’s interesting or not!
Earlier this week, David took time out from his busy schedule to critique my opinions on US monetary policy and the state of the economy:
Mr. Penzo: You clearly have NO idea what you’re talking about …
Someday, David, we’ll both look back on your assertion, laugh nervously, and then change the subject.
I’m Len Penzo and I approved this message.