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Ten for Tuesday, February 14, 2012
By JLP | February 14, 2012
1. How to Find Financial Accord
In honor of Valentine’s Day, I thought I’d share a post I came across reminding us how important it is to communicate with your spouse about finances.
2. 10 Mistakes People Make in Debt
I think a better title would have been “10 Mistakes Made by People Who Are in Debt” – the difference being that people who are in debt are usually in that situation for a reason. My favorites: “Thinking they deserve everything even if they can’t afford it.” and “Continuing with the same behavior and feeling powerless.”
3. How to Protect Your Smartphone from Identity Theives and Hackers
I’m choosing to ignore the misspelling in the title of this post because the tips are right on.
4. This Post Will Save You From a Life of Servitude
Okay, so this might not be the best comparison for those of us in Southeast Texas: “Credit card debt is an inescapable condition of life for most people, as much a constant as snow in winter or the sun rising in the east.” Still, the idea of the post is to catch people before they make stupid choices that land them in debt (aka “servitude”). Worthwhile read.
5. Roberts Assails Hollywood ‘Ageism’
Doris Roberts (Everybody Loves Raymond) spoke in front of a congressional panel to complain about “ageism” in the television and movie industry. My questions: There’s a congressional panel? While complaining about the possibility of going on welfare (NOT a joke), did it never occur to Ms. Roberts to possibly find another line of work if she is unable to find work as an actress? You can’t make this stuff up.
6. Are You a Mental Accountant?
Still not sure what a “mental accountant” is, but this post has some good thoughts on the way you think about what you spend.
7. How You Can Build Wealth
Even though I’m not a “young adult,” I’m still assuming I can put this information to use. Interesting discussion on the difference between active and passive income.
8. 20 Best Ways To Save Money By NOT Being Normal
Who wants to be normal when that means being in debt and living paycheck to paycheck? Some interesting tips to use. My favorites: “Get Rid of Your LandLine” and “Save money on your home entertainment.” My LEAST favorite (or ones that I don’t think are worth the effort put into them) are: “Go out to dinner for half price” (I end up spending more money on eating out if I try to buy from groupon.com or restaurant.com) and “Use Ebates when shopping online.”
9. What to Look for in Mutual Funds – Part 1 and Part 2
Excellent (simple) overview of how to judge what mutual funds will be a good investment.
10. Why Ron Paul Says It’s Ok to Feed Kids
Just because we need something political this week, here’s an interesting look at social programs that feed kids.
Topics: Weekly Roundup | 15 Comments »
February 14th, 2012 at 8:26 pm
Regarding Ron Paul’s saying it’s OK to have government programs to feed children, I posted this response in the other blog:
OK, so we agree that feeding children is a Good Thing. So we give to charities that feed children, right?
Here’s the crux of the problem:
If people think that feeding children is a worthy goal, then they will donate to charities that feed children.
If that is not happening, then either it is not really a worthy goal, or people cannot be trusted to decide where their money should go. If they cannot be trusted to decide where their money should go, how can they be trusted to decide who will decide?
February 14th, 2012 at 8:41 pm
I responded to Jack’s comment on our blog, but for your readers, Jack does not understand the Free Rider Problem with Public Goods Provision.
The problem with public goods is they have a private cost but a public benefit.
Even if everybody agrees that feeding children is a good thing and even if everybody agrees on how much food should go to children, in the free market most people will donate less than their fair share of that amount because they’re hoping other people will donate instead of them (classic free-rider problem), so the children still get fed but we get to keep our own money. Hence market failure and a role for government.
I suppose I might as well do a post on that at some point in the future too. I seem to be posting backwards on these issues since I started with insurance markets (and why there’s market failures in that market), which is really closer to the end of the course.
February 14th, 2012 at 8:48 pm
Regarding #4, and the reasons for getting a credit card. “To build a credit history”?! To what end? The only point of a credit history is to GET INTO DEBT. If you have paid cash for your purchases, bought cars with cash, and you have a 20% down payment, you will have no problem getting a mortgage because of a lack of “credit history,” and buying a house is about the only reason one should go into debt.
February 14th, 2012 at 9:53 pm
I understand it very well. These same free-riders, who are incapable of properly deciding where there own money should go, are somehow capable of deciding who will decide where MY money goes?
You cannot have it both ways. Either they are competent to choose what to do with their own money, or they are not competent to choose those will choose.
Are the people competent or not?
February 14th, 2012 at 9:54 pm
N&M, let us just continue the conversation on your site. There are nine other topic on this post.
February 15th, 2012 at 6:31 am
Reread the Wikipedia article. Also look up Moral Hazard in wikipedia because it looks like you also don’t get why kids aren’t the ones who are making the decisions.
Really if you want to learn about these issues in depth, you will need to take microeconomics, intermediate micro economics (don’t worry, these two classes won’t hurt your worldview, except the sections on externalities and on monopoly), and then public finance economics. Calculus is a prerequisite.
February 15th, 2012 at 7:01 am
I have taken all of those, and more.
I am not talking about moral hazard, or the free-rider problem. This is about who will decide how to spend our money. You obviously do not trust the people to do it wisely, or you would not want the government to take the people’s money to do what you want. So how can you possibly think those people will choose wisely when it comes to deciding who will take their money and spend it?
To paraphrase, if they cannot be trusted with their own money, why do you trust them to elect those who will take your money?
February 15th, 2012 at 4:33 pm
Jack) Your argument is the definition of a strawman. Since I am incapable of performing brain surgery, then I am incapable of tying my own shoes, right?
Here’s another strawman for you: since the people are incapable of defending themselves (in isolation), then why should they get to chose who runs the government, and hence the military?
If you want to debate (logically), then you first must understand the other side, especially WHY the other side has the opinion they have. THEN put forth your argument about why you disagree.
February 16th, 2012 at 8:38 am
BG, your counter-arguments are flawed. What is required to perform brain surgery is quite different from what is required to tie one’s shoes. I would contend, however, that I would not want a man performing brain surgery if he could not tie a shoe.
Your second argument, that people cannot defend themselves in isolation, is refuted by the statistics that show that where gun laws are liberalized — allowing law-abiding citizens to keep and bear arms — the crime rates go down. People are perfectly capable of CHOOSING how to best defend themselves and their families, so they are capable of CHOOSING who runs the government.
As for the topic at hand — feeding poor children — this takes money. Money comes from the people. People can, and do, choose where to best put their money. I believe that people are perfectly capable of doing that. Nicole and Maggie do not. If you think that insufficient money is going to feed children, then by all means donate more of your money. If you advocate taking others’ money for that purpose, then you are saying that they are incapable of making such choices about their own money. If they are incapable of making that choice, then how can you claim they are capable of making the choice of WHO will take their money and give it to someone else?
February 16th, 2012 at 9:13 am
Let me try to make it short and simple. It is about the ability of people to make choices. I trust people to be able to make choices — in where their money goes, and in who will make the laws. I think the level of intellect, wisdom, and knowledge required are similar between the two choices. It is not as though choosing one’s representatives is on par with tying one’s shoes, and choosing which charity to donate to is on par with performing brain surgery.
Honestly, I WOULD allow people to choose where their tax money goes — in general categories. For instance, on one’s tax return, one would be able to allocate percentages to foreign aid, defense, transportation (infrastructure), defense, etc.
February 16th, 2012 at 6:42 pm
Jack) One of the points of government is to prevent the ‘tragedy of the commons’. If everyone did what was only in _their_ best interests, then the overall result would be a negative (for everyone).
For example, the fishing industry would deplete fish stocks so fast, that it would destroy the fishing industry. A few companies might recognize this and curtail their ‘take’ from the fishing stocks, but the other actors will still deplete the system and kill the industry (for everyone).
Therefore, to save the fishing industry, everyone involved must be on board and reduce their take so all the industry can survive forever.
This is identical (i believe) that nicoleandmaggie is saying. You are arguing that a handful of people should contribute to charity to feed all the starving children, instead of everyone contributing (much like a regulated fishing industry).
Argue with that, not some strawman about electing officials (which noone is talking about except you).
February 16th, 2012 at 8:58 pm
First, the “tragedy of the commons” is not a proper analogy. In the fishing analogy, all fishermen will see the fishery collapse at the same time regardless of their individual actions. So those who exploit the fishery more will be better off overall.
In the case of charity, there is no magical pot of money from which everyone is taking until the money is gone. Each person has HIS OWN money to do with as he pleases. He makes CHOICES about how to spend his money, including how much to give to charity and what charities he will give to.
What it really boils down to is that you, and Maggie and Nicole, do not like the aggregate of the choices that people make. You believe that YOUR intelligence, wisdom, and knowledge are superior — or that our representatives are somehow superior in those areas.
But those representatives are CHOSEN by the very people that you do not trust to CHOOSE where to spend their own money. If you do not trust them with the one choice, how can you trust them with the other?
In fact, I contend that the “Tragedy of the Commons” is exactly what has been happening with our national budget. All the various interest groups are pulling fish (money) out of the fishery (national budget) because it will collapse for all of them at the same time, so they reason that they should just get as much as they can while they can.
February 17th, 2012 at 7:24 am
Now there is an argument. BTW, I never said I agree with nicoleandmaggies position. I think there is too much welfare spending as it is — need to start cutting, instead of increasing these programs.
Also, this should be a state/local issue, not federal.
February 17th, 2012 at 10:52 am
In the debate, Rep. Paul also said that such things, if done, should be done by the States, but that the central government had no Constitutional authority to do such things.
February 17th, 2012 at 2:15 pm
Exactly, if some town (or state) thinks this is an issue, they should handle it in their jurisdiction. Fed is much too top heavy already.