Coffee heat rising

The National Debt: The mortgage meltdown x 10?

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Good grief! Did you hear the Diane Rehm Show on PBS this morning? She talked about the $53 trillion national debt our government has run up. She had the former U.S. Comptroller General, a Wall Street Journal poobah and former member of a Presidential council on economic growth, and a think tank researcher, all of whom agreed that the gigantic national debt, which represents about $440,000 worth of debt for EVERY AMERICAN HOUSEHOLD, poses a huge threat to the economy.

The scariest part I heard while I was jockeying my car through 40 minutes of rush-hour traffic was a comparison between some of the elements that have led to the current fiasco and the similar short-sighted behaviors that led to the mortgage crisis. These guys say the crisis likely to come out of the mess created by an untenable national debt will be many tens of timesworse than the mortgage industry meltdown. We are looking at the potential meltdown of the U.S. economy during the next twenty years.

At the very least, government services, including Social Security, Medicare, and many programs that support businesses, agriculture, and the middle class will have to be severely curtailed or even eliminated. “Promises” made by the government to its citizens, said the guests,cannot be fulfilled.

The cause of this fiasco has been lack of competent leadership for the past decade or more, and the misguided policy of cutting taxes while failing to cut spending. Solution offered by at least one of the gentlemen: “grow the economy as fast as we can.” Uh huh. Grow the economy? While we’re in a recession that some of our leaders will not even acknowledge as recession? Gimme a break.

On an individual level, I don’t know what any of us can do about it, except to throw the rascals out of Washington…a dollar late and a day short. The corruption has to stop and the woo-woo “thinking” has to go. It will take one heck of a lot longer than eight years to get this country out of the mess the present leadership has created. It will be amazing if the next presidential administration manages to do anything other than hang onto the helm as the ship runs aground.

What is my plan?

  • Keep my job until I drop in the traces.
  • “Grow” my own economy by fostering a side business.
  • Pay off all debt and don’t run up any new debt.
  • Once the debt is paid, squirrel away every penny I can.
  • Build an emergency plan designed to survive a breakdown of the infrastructure, to include stocks of food,water, and propane.
  • Try to preserve capital in such a way that it can be handed down to the next generation, who will need it.

That’s all I can think of to do. And you? Got any ideas?

A$king and re¢eiving

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“A$k and ye shall re¢eive” is the motto of the American Society of Journalists and Authors, to which I used to belong until I figured out that freelance writing is a losing proposition. ASJA put me on to the fact that publishers don’t pay a fair rate for work done; they pay what they know they can get away with. They bank on the tendency of writers to work in their own little garrets, to cultivate social lives best described as null and void, and to be way too shy to ask other writers how much they earn. Magazine publishers in particular will pay one writer, say, $1.00 a word and another 50¢ or 75¢ for the same kind of work of the same quality. They recognize that some wannabe writers are so anxious to see their bylines in print they not only would work for free, they’d pay the magazine to publish them, and so the magazine plays that for all it’s worth. Which is plenty.

Entertainingly, today I learned that book publishers will do something similar when they outsource editorial work. My young business partner (late one of my research assistants) and I have been proofreading detective novels for a company that publishes nothing but mystery fiction. Because the work is easy and the copy so entertaining it’s hard to believe anyone would pay you to read it, we’ve been accepting the publisher’s offered rate of $12 an hour.

In response to our talking up our new enterprise, The Copyeditor’s Desk,a book packaging company e-mailed me and asked our rates for proofreading. Without thinking about the mystery publisher, I gave her a rate on the very lowest end of what I actually expect to earn: $25 an hour. Proofreading does not rise to the level of rocket science, and so I couldn’t reasonably ask for the amount I try to get by manipulating my copyediting page rate to fit the difficulty of the copy: $60 an hour. But on the other hand, there comes a point where you can’t just give it away. I figured $25 would be a bit rich for her blood.

To my astonishment, she wrote back and said our proposed rate was in the range of what they’ve been paying others.

Whoa! You are paying proofreaders twenty-five bucks an hour? You’re paying more than twice what we’ve been earning reading mystery novels? Are we talkin’ the same people who have the skills you could have expected from a bright high-school graduate a quarter-century ago?

Huh. Wonder what they would have paid if I’d suggested their arcane interior decorating books need a proofreader with a Ph.D. to make them right. . .

So the message is this: Don’t be shy about asking what you think your time is worth. If you don’t get it, maybe it’s for the best: the next client or employer will come up to your standards. And find out, even if it means bald-facedly asking colleagues what they earn, how much others in your trade or profession are earning for similar work.
Ignoran¢e is not bli$$.

Health insurance flap settles down

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Our Beloved Employer’s announcement that its only health insurance plan to cover the Mayo has been discontinued caused some annoyance among a number of employees. As it developed, I was not alone.

The HR website gave no clue as to what plans we will have for the open enrollment that starts today. One page says something about Aetna, but another page — dated 2007 — makes no mention of an Aetna plan. If you call on the phone or e-mail, they won’t tell you anything. Instead, they instruct you to attend one of the “benefits fairs” slated for this month.

So I trudged across campus to today’s “fair,” hoping to pick up some paperwork that will compare plans and maybe even say what hospitals are covered. No such luck: the two-hour “fair” amounted to an endless PowerPoint presentation! Attendance was standing-room only.

Oh, lord. So I sat on the floor, having run a little late because my car’s battery went dead and it took an hour or two for my mechanic to come up to my house, jump-start the chariot, and then follow me to his shop and change the battery and fix the fuses that blew in the process. Mercifully, the HR “presenter” paused as she cast up a slide listing the prices of the various plans, just long enough for me to raise my (literally) sweaty little paw and ask if any of them covered the Mayo. Yes, she said: RAN-AMN, an EPO with a monthly premium of $30.

Hot dang! I couldn’t believe it. The plan that worked was a sister EPO — our 2007-08 premiums have been about $25. I picked the now-defunct Schaller-Anderson plan because HR told me it was the only plan that covered the Mayo. So this means either they misinformed me last year or RAN-AMN has picked up the Mayo as a network member.

I’d figured I was going to have to go with the PPO, whose rates are around $200 a month for a single person, or try to get a bare-bones high-deductible plan and go with a doctor in a boutique practice, by way of getting access to medical care…something that’s in short supply around here. Having learned to take what HR says with a crystal of sea salt, I called the Mayo’s billing department and learned that yea verily, they are part of RAN-AMN’s network.

So that’s a relief. If I’d had to go back to the PPO, it would have meant the end of my plan to save enough to pay off the Renovation Loan, since the monthly setaside for that is almost exactly the same as the PPO’s premium.

Interestingly, deep in RAN-AMN’s fine-print paperwork, I found a proviso saying that if you are eligible for Medicare (not if you have it, but if you’re eligible), then the insurance you’re buying through GDU becomes “secondary.” This implies that you can NOT opt out of Medicare just because you have a job that offers comparable but cheaper coverage.

It looks to me like Medicare is going to be an expensive proposition. Everyone gets Medicare Part A, “free” for 40 years of payroll deductions. But it doesn’t cover much and leaves you open to bankruptcy should you develop an expensive ailment. So you have to take Medicare Part B, which costs almost $100 a month. Then you also have to take Medicare Part D — if you decline it and then later pick it up, you have to pay an extra premium (a de facto fine), for the rest of your life. Medicare D costs around $30 a month, and rising. But Medicare A, B, and D still don’t cover you well adequately, because Medicare has become so chintzy that more and more doctors won’t accept “assignment” — that is, they won’t work for what Medicare pays. So, to guarantee you can see the doctor of your choice or a competent specialist, you also must buy “supplemental” or “Medigap” insurance, which apparently costs upwards of $145.

So you have to cobble together four different plans to get full coverage, and by the time you’ve done that, the cost of health insurance for a retiree will exceed $250 a month. I would find that a strain on the decent salary I’m earning. To have to pay eight or nine times my present healthcare premiums for Medicare when I’m living on a reduced, fixed income will pose an interesting challenge.

As you can imagine, any Pushmi-Pullu as jury-rigged is this is complicated and confusing. The government’s official Medigap document linked above is 52 pages long, and following it requires your full, undivided attention. Then we have this overview of Medicare, 113 pages full of details whose complexity rivals the U.S. tax code!

Look, I’m grateful not to have to pay the exorbitant rates with which insurance companies gouge older Americans — $400, $500, $600 a month. But still…I’m brought back to the same thought that always occurs to me every time I have to look into our health-care system:
There’s no excuse for this.

Moments of fame

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No Debt Plan hosts the 165th Carnival of Personal Finance today. Looking forward to the start of this fall’s college football season, he’s running for a touchdown with this enormous and lively carnival. Funny’s guest poster Miranda Marquit made the line-up with her article on keeping debt under control while attending college.

NDP is giving away $50 Amazon gift cards to those who subscribe to his site, BTW. Check out his offer at the carnival, and while you’re there read some of the many good entries he features. My Two Dollars has a nice rumination on some of the things (other than $$) that make an employee happy. An extremely interesting article appears at a site called Really Better Real Estate, where Realtor Joe Manausa challenges the worth of three widely held real estate statistics. Not the Jet Set describes what happened when a perp got ahold of his wife’s debit card number–good reason to use credit cards. Though their bank caught on quickly and they did not have to pay for the charges, with a debit card a criminal can clean out your account and you can end up eating the loss.

Roundup: Cactus flower edition

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If you came here following a ping, you’ve found the beta version of Funny about Money in WordPress. After I’ve worked out a few bugs, I plan to migrate the domain name to this site. Till then, to ease the workload I’m copying current posts from iWeb to WordPress as I write them.

The past week’s violent summer rains have borne fruit in the form of a spectacular new flower, spotted on an otherwise unassuming little cactus that grows under my desert willow’s canopy. Isn’t that the loveliest shade of pink? It’s evidently a variety of Easter lily cactus-the blossom has the classic trumpet shape. I’ve never seen one before that wasn’t white or magenta.

A lot has been going on while Funny was off the air. Jim at Blueprint for Financial Prosperity, along with Lynnae of BeingFrugal.net and Steve of Brip-Blap, got on this weekend’s Marketplace Money, quite a nice coup, indeed!

Feeling cranky as I am about Apple these days, I enjoyed Jim’s gentle jibe at the ridiculousness of the iPhone craze.

Out of Debt again is back from summer camp and Mrs. Micah is back from vacation and plumping her first blogiversary contest. Be This Way has her hands full this summer, between moving her dad out of his house and putting her own house on the market. Meanwhile, also on the home front Be This Way’s little one has already begun to test the law of nature that says to outwit a small child a parent must be faster than the child by a factor of ten to the twenty-seventh power.

Plonkee has an interesting series of discussions going on the question of whether one should (or would) move to engineer a lower cost of living. Five-cent Nickel thunders about the state of financial education in this country…only one small element, I might add, in the overall state of American education. Wisebread reports on a new subspecies of the Trophy Wife: the SAHW (she stays at home whether she has kids or not). Lordie. Who’d’ve thunk it?

SmallNotebook.org has a nice essay on how to zing “natural” housecleaning products to get them to work a little better. At The Simple Dollar, Trent et famille are off to the state fair and planning ways to keep their outing frugal. And My Dollar Plan offers an interesting strategy to use your Roth IRA to help lower your tax bill.

Lessons learned from a computer crash

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First: Don’t believe a Mac is any more reliable than a PC. It’s not.

Second: Never believe what Apple’s sales staff tells you. When I bought the Mac, I specifically asked if the Quicken data the Apple Geniuses obligingly converted to Macintosh format could be converted back to PC format, in case I didn’t care for the platform. They said there would be no problem. That turns out not to be true. A Mac-compatible Quicken data file can not be converted to a PC-readable format. Thus, if you’ve faithfully backed up your Quicken data every time you enter transactions and you own only one Mac, after it crashes you may never be able to retrieve your data-especially if your version is out of date and a newer version of Quicken won’t read it. (Remember, this is one of Quicken’s devices to force consumers to keep buying new, unneeded software: if you decline to buy each bloated new version, when you go to buy a new computer and have to install the current version, you may find all your old data is unreadable.)

Third: However, you can save a Quicken file to PDF format. You can do this with transaction reports and with entire account registers. I don’t know if it’s a function of Acrobat Professional, which resides on all my terminals, or if Quicken will make PDFs on its own, but I think it’s the latter. The process is very easy: simply print to a PDF.

While a PDF of course has no functionality, it does at least save your data in a format readable on both platforms, and PDF files are extremely stable. As such, they provide a last-ditch back-up. If everything in Quicken crashes and for some reason (there certainly are reasons!) you can’t get back into your QDF files, you at least can get at the data so that you can re-enter it in a new version of the program or into Excel.

Fourth: The relationship between Intuit and Apple is tenuous, and Mac-compatible versions of Quicken for Mac are pale (often annoying) shadows of Quicken for PC. Although Intuit alleges that it will come out with a spectacular new Mac version so ground-breaking it must be rebranded “Quicken Financial Life for Mac,” believe it when you see it.

Consider using Excel for bookkeeping. This requires you to forego the swell online communication with your bank and investment brokers…but really. How necessary is that, in the large scheme of things?

Fifth: The capability to back up Quicken data files to MobileMe is dubious. For one thing, it’s unclear whether the file is stored with a .qdf extension, and so it’s equally unclear whether the file can be used to reconstruct lost data. Then there’s the alarming fact that one of Apple’s online support gurus told me flatly Quicken cannot be backed up to MobileMe. The store’s manager denies it, but given the contradictory tales that have come at me from all directions, I believe it’s smart to put that bit of intelligence somewhere other than in the circular file.

For this reason, all QDF files should be backed up to an external hard drive and also to a flash drive. If there’s any chance you will not have access to a second Mac loaded with Quicken, also back up your account registers in PDF format.

Sixth: iWeb’s blogging function is resident on your computer and only on your computer. Thus if your computer crashes, your blog is gone. Gone for good. Unless you’ve backed up the content of your site, it can’t be retrieved; the Genius who revealed this gem was unclear whether saved data can be imported into iWeb on a new computer. If you start anew on a fresh computer without having imported your old posts, even if you can access your blog site (a matter that appears to be questionable), the minute you publish a new entry you will erase all your blog’s archival content.

Never, ever do a blog on iWeb!