"Strange Negotiations" - David Bazan
You blew all your inheritance
And now you're trying to pin the blame on me
And I could write you off so easily
Except a hundred million other people agree
A song for the times if ever there was one.
- So maybe Richard Cohen and David Brooks read this blog after all. After writing about the abdication of the mainstream media with respect to the incredibly extremism of the Republican Party, I awoke today to virtually twin columns from two of America's more annoying "moderates" and found both of them denouncing the Republican Party in unusually robust terms. It will be interesting to see if this trend lasts and spreads. I actually think stuff like this matters -- if the theme of collective madness within the GOP actually takes hold as a kind of conventional mainstream media wisdom it could prove helpful in the upcoming budget battles and the 2012 election. I'm not holding my breath, but will watch with interest over the next few weeks.
- A law professor of mine once noted that all legal arguments entail a moment where one "puts the bunny in the hat" so to speak. This article bemoaning the fate of families earning $250,000 a year, shows a nice sense of that sleight of hand, arguing, as it does, that most of these families, even when living relatively modest lives, somehow end up in the red over the course of a year "after taxes, saving for retirement and their children's education." Did you see how they did that? So what is the assumption in the article -- that the couple at issue "take[s] advantage of all tax benefits available to them, such as pretax contributions to 401(k) plans and medical, childcare and transportation flexible spending accounts." So in other words, this couple is tucking away the maximum 401(k) contribution for both of them, i.e. $16,500 a year, and they are "squirreling away $8,000 a year for their kids' ("a toddler and a school-aged child") college education." In other words, our oppressed couple is saving $51,000 a year -- roughly equivalent to the median household income in the United States. They also have 20% equity in their home and are making mortgage payments on it, by which more equity is being acquired each month. In short, these people are on their way to a seven figure net worth, even in a mediocre investment environment, in a relatively short time -- probably about fifteen years. In a good investment environment, that $33,000 a year in 401(k) contributtions (assuming no employer match), and $16,000 in college savings, presumably in a section 529 account, is going to result in substantial and growing investment income -- all of which will accumulate tax free (along with the tax deferred contributions). Assuming, based on the age of their children, that this couple is in their mid-thirties to early forties, they look to be in a position to retire with a couple of million dollars and a fully paid off house. Is this really where we are going waste our sympathies. And aren't these people receiving enough advantages from the tax code?
What else is going on out there?