Black Coffee: Kim Kardashian, the Federal Government & Other, Um, Big Stuff

It’s time to sit back, relax and enjoy a little joe

Welcome to another rousing edition of Black Coffee, your off-beat weekly round-up of what’s been going on in the world of money and personal finance. Here’s what caught my attention over the past week…

Kim Kardashian‘s marriage went up in flames this week, a mere 72 days after her big fat expensive $10-million dollar wedding. I know.

Soon after the news broke, Twitter users began listing things with a shelf life longer than her marriage to basketball star Kris Humphries. You know, stuff like:

  • an iPhone battery
  • the time it takes to make a bowl of Easy Mac
  • the movie Titanic
  • a yellow traffic light
  • her engagement
  • a Justin Bieber chest hair
  • Lebron James’ forehead

I guess you can probably add this edition of Black Coffee to the mix too.

Blogs I’ve Been Following This Week

Control Your CashThe October Retard of the Month, Assuming She Exists. Greg tells me I once again lost out on this coveted award only because of a technicality. That opened the door for Kelli Space, a college grad who racked up $200,000 in student loan debt. That is, assuming her strange story is really true. Then again, if it is, her experience is a perfect example of why an expensive college education is probably no longer worth the time and money for most people.

Afford Anything –  Find a Niche. Conquer It. Create Something Amazing. Nope. You don’t have to go to college to be a successful entrepreneur. Don’t believe me? Look at Kim Kardashian. Says Paula: “With the exception of selling your sperm or giving birth for money, (many) jobs could be done by a middle school student.” Uh huh. I know what you’re all thinking, but don’t worry; I’m not saying another word, folks.

Good Financial CentsDurbin’s Amendment May Change How You Use Banks. Passed last month, the Durbin Amendment limits how much banks can charge merchants that process debit card transactions. Jeff adeptly shows why government meddling in the free market rarely, if ever, works. In this case, it will simply end up more effectively transferring those costs from the merchants to the consumers.

Money Help for Christians 3 Reasons Why We Kissed Budgeting Goodbye. Never mind that this is the very same Craig Ford who published The Secret to a Successful Budget. After a decade or so of successfully employing them, Craig has finally had it with budgets. He’s finished, I tell you! Done! Well, that is until June 2012, when he plans on keeping a budget again. I know. (In other news: Craig will be announcing his intent to run for public office any day now.)

And Here’s Some Other Posts You Might Enjoy…

The Simple DollarHow Important Is it to Start Early?

Darwin’s Money – When Faith Kills – Life, Death and Finance

Lazy Man and MoneyDetermining Your Retirement Expenses

Bible Money Matters100 Frugal Gifts You Can Give This Christmas

Fiscal Fizzle8 Critical Mistakes in Envelope Budgeting

Millionaire Nurse BlogAging: Financial Armageddon. Does It Have to Be?

Everyday Tips and ThoughtsTaking Risks And Living With Decisions

Punch Debt in the Face The Most Comprehensive Guide on “How to be Debt Free” Ever Written.

Personal Finance By the BookThree Ways to Minimize Your Vehicle Depreciation Expenses

Financial HighwayDollar Matters: Credit and Debt

Green Panda Tree HouseDecisions, Decisions: Making a Big Purchase

The Penny Hoarder Get Paid $50 or More to Write a Guest Post

The Way-Back Machine: Past Posts Of Mine You May Have Missed

From July 2010:

Your Big Fat Expensive Wedding: Stupid Is as Stupid Does – At the time I wrote this, I thought Chelsea Clinton’s wedding was a perfect example of matrimonial excess. Then came Kim. Anyway, here’s how my very modest wedding to the Honeybee stacked up financially to Chelsea’s.

The Question of the Week

Do you think college offers the best opportunity for financial success?

View Results

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Credits and Debits

Credit: Good news: The United States ended its 2011 fiscal year on a high note. Total revenue rose 6.5 percent, resulting in $2.3 trillion being deposited into the US Treasury. Hooray!

Debit: Too bad the federal government decided to continue its unabated expansion, charging $3.6 trillion more to the national credit card this year. That’s a 4.2 percent increase over last year’s crazy spending spree.

Debit: That means the taxpayers are stuck with a third consecutive annual budget deficit of more than $1 trillion. Meanwhile, our National Debt — essentially our outstanding credit card bill — is poised to cross the $15 trillion mark any day now. I know.

Debit: Oops. I almost forgot. We’re also on the hook for $100 trillion or so in unfunded obligations like Social Security and Medicaid. That’s really scary when you consider our entire annual US GDP — essentially our nation’s collective annual income — is “only” $15 trillion.

Credit: You would think that $2.3 trillion would be enough to handle all the nation’s constitutional duties — and it is.

Credit: Consider that the United States spent $712 billion on national defense in 2011. Regardless of whether or not you believe defense expenditures are excessive, that still leaves $1.6 trillion annually to fully fund everything else our Founding Fathers intended the federal government to handle.

Debit: The trouble is, the federal government’s biggest expense isn’t defense, which it is constitutionally mandated to provide; entitlements are, but they’re not authorized by the Constitution.

Debit: For example,  the US expended $1.4 trillion in 2010 on Social Security, Medicare, and Medicaid — and another  $496 billion spent on other safety net programs.

Credit: Keep in mind for the first 160 years of the United States’ existence, when it rose to become the wealthiest nation on earth, none of those entitlement programs were around — and the size of the federal government was just a tiny fraction of the behemoth it is today.

Debit: Like it or not, the costs of supporting our bloated federal government and all of its entitlement programs are now eroding our standard of living. Even worse, we are, tragically, robbing from future generations and saddling them with unconscionable levels of debt, much of it for benefits they will never receive. Talk about greed.

Debit: Despite this fact, the OWS protesters continue to battle, literally, for even bigger government and more entitlement programs under the guise of “economic justice.”

Debit: Try telling that to the 21 New York City cafe workers who were laid off this week because the ongoing demonstration decimated their employer’s business.

Credit: I guess it’s not all bad here in America. Last week a Pittsburgh man was arrested after stealing a Reuben sandwich. Police caught the suspect shortly after he tried to make his getaway in a forklift. A forklift. I love it when a criminal carefully plans a caper down to the last little detail.

By the Numbers

Here is how the US government spent its money in 2010. The problem is, most of the federal expenditures continue to be spent on duties not authorized by the United States Constitution; duties not specifically assigned to the federal government by the Constitution are reserved for the the individual states.

21% Medicare, Medicaid and the Children’s Health Insurance Program (CHIP).

20% Social Security.

20% National defense.

14% Other social safety nets.

7% Benefits for federal retirees and veterans.

6% Interest on the debt.

3% Education.

3% Transportation infrastructure.

2% Scientific and medical research.

1% International aid not related to security.

3% Everything else.

(Source: Center on Budget and Policy Priorities)

Other Useless News – It’s Contest Time!

GoBankingRates is sponsoring a contest right here at Len Penzo dot Com where one lucky winner will receive a six-month membership to CreditScoreComplete, a 3-in-1 credit monitoring solution.

Your membership will include:
–      3-bureau credit monitoring with alerts (TransUnion ®, Equifax ® and Experian ®)
–      A detailed analysis of your credit history
–      Details on who has viewed your credit score
–      Access to all three of your credit scores

I had a similar service for a couple years provided to me free of charge by my employer, and let me tell you, it was terrific. One of the best things about it was the ability to check my credit score whenever I wanted. I loved it and I think you will too.

Unbelievably, as of press time, only one person has entered the contest. Yes, just one. I kind of feel like the kid who sent out invitations to a birthday party and nobody showed up!

Anyway, you have pretty good odds if you decide to take the plunge!

To enter the contest: Click this link!

Oh, yeah; I almost forgot! And if you happen to enjoy what you’re reading — or not — please don’t forget to:

1. Click on that “Like” button in the sidebar to your right and become a fan of Len Penzo dot Com on Facebook!

2. Make sure you follow me on Twitter!

And last, but not least…

3. Don’t forget to subscribe to my RSS feed too! Thank you. :-)

Top 25 Referrers for October

It’s the first weekend of the month, which means it’s time once again to thank the top 25 referring websites to Len Penzo dot Com.

1. MSN: Smart Spending
2. The Simple Dollar
3. Money Talks News
4. Lifehacker
5. Oblivious Investor
6. Swagbucks
7. Time Magazine: Moneyland
8. Monevator
9. Kiplinger
10. Afford Anything
11. Wisebread
12. Lazy Man and Money
13. Stewardship of Life
14. Money Help for Christians
15. Thousandaire
16. Budgeting In the Fun Stuff
17. Money Beagle
18. Green Panda Tree House
19. Matt About Money
20. Out of Debt Again
21. Budgets Are Sexy
22. Online Investing AI
23. Control Your Cash
24. Fabulously Broke in the City
25. (tie) Frugal Under 40
25. (tie) First Gen American

Thank you to everyone who refers their readers to this little ol’ blog! It’s much appreciated.

Letters, I Get Letters
Every week I feature the most interesting question or comment — 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!

For some reason or other, The Man from Snark felt the need to write in and ask me this: Are you lactose intolerant?”
Never mind that. Can you tell me about life in “Snark”? Isn’t that near Liechtenstein? (I think I saw it featured on an episode of House Hunters International once.)

I’m Len Penzo and I approved this message.

Photo Credit: Glenn Francis


  1. 1


    “Keep in mind for the first 160 years of the United States’ existence, when it rose to become the wealthiest nation on earth, none of those entitlement programs were around – and the size of the federal government was just a tiny fraction of the behemoth it is today.”

    and the reason being is that it was understood that to interfere in the internal affairs of the States would be an abuse of the constitutional powers and authority of the federal government.

    • 2

      Len Penzo says

      Spot on, Griper. The good news is I believe America is finally starting to recognize this and the pendulum will soon start to swing back in the other direction.

  2. 4

    Barb says

    Len, you and other bloggers refer to Social Security as an “entitlement”, yet employers and employees pay INTO Social Security … with the presumed idea that the government will hold and invest those funds against a future when the employee retires and can expect to draw against them. And just how much an individual can draw out is based on how much they paid in. So how exactly is that such a huge drain in the national budget? (Social security is a separate tax in addition to income tax. Just clarifying, I know you know all this.)
    I cannot understand why this is characterized as an “entitlement”. Unless “entitlement” is taken to mean money that the government borrowed from me by force and should be obligated to repay me. And of course I understand there are other things bundled into Social Security like disability, but even that can be considered reasonable if the person has worked and paid into SS programs for years.
    Just sayin’. I’m not really in favor of more government programs, but all this “burden on the children” talk irks me when I know how many years I paid into that system and how very little I am ever likely to see of it.

    • 5

      Len Penzo says

      Thanks for your comments, Barb. I call it an entitlement for a few reasons: 1) that money is forcibly taken from us and redistributed to others; 2) most people EXPECT some kind of SS check to support them when they retire now; and 3) because most people DO get ultimately get more back from SS than they pay in — and they would be up in arms if you capped their lifetime SS income to what they ultimately contributed, or at least some level slightly beyond what was originally put in. There are plenty of sources that back up the fact that the average guy gets more than he contributes, but here is just one:

      That being said, I don’t mean to suggest that we should entirely abandon SS. I don’t think we can pull the rug out from folks who are, say, older than 50 or 55. However, we should start phasing it out for younger folks depending on their age.

  3. 6


    With all respect on this. To say that medicare and medicaid are unconstitutional is a far from an agreed upon fact. The General Welfare clause was inserted with this sort of purpose in mind (that is, to permit the federal government to make material changes if it deemed them beneficial to the citizens). We can debate how to interpret the clause and the original intent (which was probably not unanimous between the framers), but it is present.

    • 7

      Len Penzo says

      Article 1, Section 8: “The Congress shall have Power to lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defense and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States.”

      My argument is that, if you read Article 1 Section 8, the word “welfare” is clearly used in the context of the individual states and not its citizens per se. Respectfully, and with that in mind, it seems to me that any interpretation that says Art. 1 Sec 8 authorizes the federal government to create retirement programs such as Social Security is a very big stretch.

      I’ve never been a fan of the “Constitution is a living breathing document” philosophy. I believe it is important to be strict in its interpretation. If we can stretch the meaning of the Constitution’s articles and sections to mean anything, then in realty the words in that document really mean nothing.

      That being said, if people want to change the Constitution, that document provides a couple avenues to do so. :-)

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