Black Coffee: Debt and Taxes

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.

Well … another busy week is behind us. So with that in mind, let’s get this party started …

First our pleasures die. Then our hopes, and then our fears. And when these are dead, the debt is due.

– Percy Bysshe Shelley

Most Americans try to cooperate fully with the IRS, because, as citizens, we feel a strong patriotic duty not to go to jail.

– Dave Berry

Credits and Debits

Credit: Did you see this? A majority of respondents to a recent Gallup poll say that the cost of a college education is no longer worth it. In fact, only 1 in 3 survey participants expressed a “great deal” or “quite a lot” of confidence in America’s higher education system. Conversely, the number of people saying it’s better to learn a trade is rising. Although, to be fair, there is another group out there who should not only avoid engineering, math and quantum mechanics text books, but channel locks, electrical panels and carpenter’s belts too …

Credit: For those who continue to insist that inflation is no longer a problem, please explain TikTok user Dakota Neifert, who recently shared a viral video about how a month’s worth of groceries from Walmart nearly quadrupled in price over the past two years. Neifert had been looking at Walmart order history when he found an order from two years ago for a month’s worth of groceries for $126. When he selected the option to reorder that exact purchase, those same 45 items cost $414. Anybody care to guess if his wages also climbed 300% since 2022? After all, when you’re ridiculously wealthy, prices become almost irrelevant:

Debit: If you’re looking for more inflation evidence, consider Exhibit B: The average supermarket price for ground beef jumped 32 cents in June to a new record high of $5.47. For those not scoring at home, ground beef prices have climbed a whopping 38% since January 2021. Then again, it’s not just ground beef …

Debit: Of course, frivolous unfettered printing of the US dollar (USD) on government boondoggles is a primary contributor to the latest bout of price inflation. For example, the US is spending $1.7 billion to help manufacturers convert closed and struggling manufacturing facilities to produce EVs or EV components, even though the EV market is being rejected by the broader automobile market. This is on top of another $12 billion in funding allocated last year for retrofitting other EV production plants. Sadly, we all know how that strategy will probably end:

Debit: Needless to say, there is no shortage of people who insist that the way to remedy America’s economic woes is by increasing federal tax rates on corporations and “the rich.” With that in mind, in a showcase of how the Internal Revenue Service (IRS) is making use of monies received from the so-called Inflation Reduction Act of 2022, the agency announced it collected $1 billion from wealthy tax cheats. Even so, two out of every three tax audits initiated in 2023 by the IRS were on those making less than $200,000. Imagine that.

Debit: Before you starting thinking the IRS will be able to fix America’s debt problem, keep this in mind: The annual US federal deficit is on track to end the fiscal year at a whopping $1.9 trillion – so that $1 billion in back taxes collected by the government is enough revenue to cover 0.05% of the federal deficit. It’s all folly – but if anybody can tell us how this drop in the ocean somehow manages to “reduce inflation,” we’re all ears.

Debit: The good news is with that $1 billion collected by the IRS, the billions and billions that Congress allocated in 2022 to expand the number of IRS agents will be paid off in only 59 more years. Hey … we’re here all week folks! Although it’s painfully obvious we’ll never be confused with the great Paul Lynde …

Debit: Meanwhile, the US spent a gross $140 billion on debt interest last month. In case you’re wondering, that happens to be the single biggest monthly interest outlay on record. That also brings the total debt service cost for the year to $868 billion. Not surprisingly, that total is on pace to hit $1.15 trillion for the full year.

Debit: So … just how deep in the mire are we? Well … the National Debt will soon be crossing the $35 trillion mark. However, if you also include household and business debt – including $25 trillion in Americans’ personal debt and $1.3 trillion in credit card debt – as well as debt held by local and state governments, the US debt total soars to $101 trillion. Clearly, America’s got a fiscal beer belly that needs to be addressed. The trouble is nobody is willing to put the in the work required to get back into shape.

Debit: But wait … it’s actually worse than that. The federal government also has $217 trillion in unfunded liabilities on the books, including the top two – and rapidly growing – unfunded liabilities: $27 trillion for Social Security and $41 trillion for Medicare. if only there was a way out of this terrible financial predicament that the US – and most of the world’s biggest economies, for that matter – find themselves in. Oh, wait … there is. After all, there are solutions out there for every problem:

Credit: Over the past nine months or so, gold (and silver) – the only viable tools left to combat America’s toxic fiscal mess – have clearly started to sniff out the United States’ intractable debt predicament. In fact, the steady rise in the price of gold in USDs has seemingly occurred without regard to what the USD or interest rates are doing anymore. It’s almost as if the yellow metal knows the day is coming when it will once again be replacing the USD as the world’s premier reserve currency. Got gold?

By the Numbers

There are currently 7 million Americans with at least one credit account where they’re late on their payments. With that in mind, a new study sheds light on the five US states where those difficulties are most – and least – pronounced.

50 New Hampshire (least financial distress)

49 Iowa

48 Connecticut

47 Vermont

46 Wisconsin

5 Rhode Island

4 Tennessee

3 Nevada

2 Texas

1 Michigan (most financial distress)

Source: Wallet Hub

The Question of the Week

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Last Week’s Poll Result

If you were to get married today, what would be your invitation limit?

• 10 or less (26%)
• 26 to 50 (24%)
• 11 to 25 (19%)
• 51 to 100 (17%)
• 101 to 150 (12%)
• More than 150 (2%)

More than 1900 Len Penzo dot Com readers answered last week’s poll question and it turns out that 7 in 10 of you would invite 50 people of fewer to your wedding, assuming you were getting married today. Frankly, I’d keep mine to less than a couple dozen too! Conversely, just 1 in 7 of you would invite more than 100 people. Signs of the time, to be sure.

If you have a question you’d like to see featured here, please send it to me at Len@LenPenzo.com and be sure to put “Question of the Week” in the subject line.

Useless News: The Long Weekend

A man called home to his wife and said, “Honey, I’ve been asked to fly to Canada with my boss and several of his friends for fishing. We’ll be gone for a long weekend — and it’s a good opportunity for me to get that promotion I’ve been wanting — so please pack enough clothes for a three-day weekend. Also, please get my rod and tackle box from the attic. We’re leaving from the office at 4:30 p.m. and I’ll swing by the house to pick my things up. Oh, yes! And please pack my new navy blue silk pajamas!”

The wife thought this sounded a bit odd but, being the good wife, she did what her husband asked.

At the conclusion of the long weekend, the man came home; he was a little tired but, otherwise, looked great.

The wife welcomed him home and asked, “So, did you catch many fish?”

“Yes!” answered her husband. “Lots of walleyes, several bass, and a few pike.”

After a brief pause, the husband asked his wife, “By the way, why didn’t you pack my new blue silk pajamas like I asked you to do?”

The wife replied, “I did — they’re in your tackle box.”

(h/t: RD Blakeslee)

Buy Me a Coffee? Thank You So Much!

For the best reading experience, I present all of my fresh Black Coffee posts without ads. If you enjoyed this week’s column, buy me a coffee! (Dunkin’ Donuts; not Starbucks.) Thank you so much!

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More Useless News

Here are the top — and bottom — five Canadian provinces and territories in terms of the average number of pages viewed per visit here at Len Penzo dot Com over the past 30 days:

1. Quebec (2.21 pages/visit)
2. Prince Edward Island (2.17)
3. Newfoundland & Labrador (2.13)
4. Alberta (2.08)
5. British Columbia (2.00)

9. Yukon (1.63)
10. New Brunswick (1.60)
11. Saskatchewan (1.49)
12. Ontario (1.45)
13. Yukon (1.40)

Whether you happen to enjoy what you’re reading (like those crazy French Canadians in Quebec, eh) — or not (ahem, you hosers living on the frozen Yukon tundra) — please don’t forget to:

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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! You can reach me at: Len@LenPenzo.com

After reading my post highlighting one way to reduce your annual grocery bill by thousands of dollars, Ray shared this:

I enjoy eating at home since I have an uncanny knack of always finding the worst meal at restaurants.

The Honeybee has a similar problem: She has an uncanny knack of always finding the most expensive meal at restaurants.

If you enjoyed this edition of Black Coffee and found it to be informative, please forward it to your friends and family. Thank you! 😀

I’m Len Penzo and I approved this message.

Photo Credit: stock photo