Thursday, August 11, 2011

28 Years

A tiny little bit of justice was handed down today in the cash for kids scheme. The judge was sentenced to 28 years.

It's impossible to know how many kids had chunks of their life stolen by this creep. The PA supreme court has recommended that every case that the judged handled between 2003 and 2008 be vacated and the children involved have their records expunged. That involves 4,000 children.

This situation is the poster child for why we should never ever privatize prisons... not running them, not building them, not administering them, nothing. The profit motive in the prison industry has a voracious appetite for human liberty and tax revenue. Prisons are a necessary evil that a sane society would do its best to minimize. Any company which makes profit on prisons has an incentive to maximize the number of people in prison. Therefore, there is no way for such a company to exist in harmony with the goals of a reasonable society.

Monday, August 8, 2011

Goofy Financial Analogies

In order to make sense of our federal government's budget, lots of normal folks have been making the "if the government were a family..." type of analogies lately. Here's a pretty typical example:
"If the US Government was a family, they would be making $58,000 a year, they spend $75,000 a year, & are $327,000 in credit card debt. They are currently proposing BIG spending cuts to reduce their spending to $72,000 a year. These are the actual proportions of the federal budget & debt, reduced to a level that we can understand." - Dave Ramsey

For the sake of the argument, I'll accept that the numbers are accurate. That's entirely besides the point. The analogy is dangerous because it implies the common sense, and entirely wrong, solution that we need to spend less money. Folks understand that.

Let me propose a different family analogy:

If the US were a family, it would be one where mom, dad and the oldest kid were all contributing roughly $25k each to family expenses. Since those expenses come in at about 73 to 74k, they are putting a little money aside by paying down their home equity line, their mortgage, their credit cards and the loans they took to get junior (the oldest) through college. The rest of the home includes grandmom (who is past her ability to work, and in fact requires some expensive medicine), a college student and a grade schooler, none of whom have jobs.

Then, junior (who makes more than mom and dad combined) decides that he doesn't want to contribute such a large portion of the household expenses, and starts paying $20k instead of the 25k he had been paying. After all, he's not 1/3rd of the family, why should he pay a third of the expenses? Mom and dad figure that things will work out, so rather than cut back or give junior a swift kick, they just continue on as if nothing had happened and take our another home equity loan to avoid having to cut back or have that difficult conversation with junior (after all, junior did take them out for a nice dinner to announce his reduced contribution). Then, the financial crisis hits and Mom gets her hours cut and dad is forced to take a pay cut in order to hold on to his job. So now between the two of they are contributing 33k instead of their normal 50k. To make matters worse, the maintainance on their big house, that they had been deferring since junior cut back his contribution, is starting to catch up to them and the roof has started leaking. And junior, feeling his oats, is insisting that since his parents are contributing less, he should also contribute less. But junior being a smart kid recognizes that eventually the bank is going to stop extending the HELOC, so he gets the idea that mom, dad and the rest of the family (who fed him, paid for his education, financed his first small business and still patronize it) should eat less, use less medicine ignore the leaking roof, and not worry about his younger siblings' current and impending college education costs. Meanwhile, he's gotten a 7 figure bonus for outsourcing jobs like his mom's and for forcing laborers like his dad to take a pay cut.

Now I get that my analogy isn't nearly as concise or pithy as Mr. Ramsey's. In fact mine is a little complicated and perhaps difficult to follow. But it's a damn sight easier to follow than the actual US economy. Which is really the point. The Federal Budget is not like a family budget. Not at all. Which isn't to say that we can't understand it. We can. But only if we stop pretending that the situation is as easy to understand as a family budget.