Re: Saving money

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 > At 2:38 PM -0700 10/24/97, harka@nycmetro.com wrote:

 > The "just don't work for them if 'ya don't like it"-argument
 > will last about 4 weeks...the approximate time a human can
 > survive without eating. (or a couple of weeks less, if you have
 > kids)

 -=> Quoting In:tcmay@got.net to Harka <=-

 In> By my third year out of college, I had a big enough cushion of
 In> saved cash and other investments

[american dream deleted]

While I am glad for your achievements, you have not addressed my
point: all this doesn't apply to the larger mass of people.

You were fortunate enough to be in the right place at the right
time...one of the founding-members of a company in an industry,
that pays way more than average and thus brought you into the
position, that you're in now. Great...more power to you and I
encourage everybody to try the same.

But that's not applicable to the larger percentage of the
population. Besides, it's a supply and demand question.
Computer-jobs only pay that much because it's a booming industry
right now and there are less people than needed. Fortunate for
those who were/are able to ride the wave.
But if the available work-force exceeds the demand for it, such
jobs wouldn't pay nearly as much as they do right now.
Hence, achieving financial independence to the point of freely
choosing employers would become much harder again.

But this is the reality for MOST people (outside of the
elite-industries) already! Especially if they start out with
student-loan-debts amounting to several ten thousands of dollars.
Add a family/kids to that and you tell me how easy a task it will
be to quickly become independently wealthy.
(Some people will be able to pull it off somehow, most people won't
- - despite their wishes to the contrary. Should they make their best
effort? Absolutely! Will everybody succeed? Absolutely not.)

The background of this discussion is the free choice of employers
(based on their policies). My point is, that for the large mass
there is no such thing as a free choice (of employers), not
necessarely because they're not willing to improve their financial
standing to such a degree (who doesn't want to have more money?),
but because they don't have the time, resources and conditions to
do so.

But even IF you were able to "make yourself more marketable" (as
WHGIII eloquently composed)...if ninety percent of businesses in
the country use the GAK/CAK-feature of PGP 5.5 how much free choice
will then remain for you?

 > I.e. unless you are the super-duper, three-times
 > nobel-prize-winner (with lots of money in stocks), who can
 > AFFORD to choose employers that freely, you will be DAMN GLAD to
 > have a job AT ALL, regardless of their policies!

 In> More nonsense. Move out to the Bay Area, if you have any
 In> talent at all in software or hardware or biotech or Web design
 In> or multimedia, and you'll find jobs galore.

I'll invite you in return to move to Brooklyn, NY to find out for
yourself how easy life is for the non-elitists. Or maybe just take a
walk around your own town.

The truth is, that there are many people outside of Cypherpunks,
who get barely through life _despite_ making efforts. They may get
enough salary in their 9-5 job to maintain themselves to a degree,
but not nearly enough to have the complete freedom, that is the
issue here. And to say, "they get what they deserve" (if they don't
have the abundance of dollars/freedom) is rather narrowminded and
out-of-touch with most people's reality.

But these are the people determining if GAK/CAK ever becomes
widespread. If companies employing it would face extinction, because
nobody would work for them anymore, GAK/CAK wouldn't succeed.

However, capitalism doesn't work that way, despite of the few who
made capitalism work for them.

Ciao

Harka

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... By the time you can make ends meet, they move the ends.

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If encryption is outlawed, only outlaws will have encryption...

At 10:00 PM -0700 10/24/97, harka@nycmetro.com wrote:

>[american dream deleted]
>
>While I am glad for your achievements, you have not addressed my
>point: all this doesn't apply to the larger mass of people.

As I recall your point, it was that most people are a few weeks away from
running out of money and hence cannot change jobs readily. I was saying
that a small amount of self-discipline and sacrifice can quite easily
translate into having a few _months'_ worth of savings.

Granted, this takes discipline, to put money away instead of spending it.
But even minimum wage workers are quite capable of saving...this is how
many move out of minimum wage jobs into running their own small shops or
businesses. Examples are legion.

If they won't make these spending tradeoffs and have not even a buffer
sufficient to carry them through a month or two or three, I say screw them.

I won't support restrictions on what a company may do, when perfectly
legal, just because Joe Sixpack spent his paycheck on beer and is now
afraid to look for a job with a better company. Or because Rawandala Brown
spent her money on crack and now is "trapped" in a job.

>You were fortunate enough to be in the right place at the right
>time...one of the founding-members of a company in an industry,
>that pays way more than average and thus brought you into the
>position, that you're in now. Great...more power to you and I
>encourage everybody to try the same.
>
>But that's not applicable to the larger percentage of the
>population. Besides, it's a supply and demand question.

The Mormons teach self-reliance, and savings. So do other religions and
belief systems. Many of them urge their followers to have money put aside
for just these kinds of situations.

As I said, even minimum wage workers have a proven ability to save. If they
won't, this is there problem. "The Grasshopper and the Ant" is far more
important for children to read and internalize the lessons of than the
currently-popular "I Have Two Mommies" crapola.


>
>If encryption is outlawed, only outlaws will have encryption...

Don't you mean, in your world view:

If success is outlawed, only failures will succeed.


(I urge you to think about how your criticisms of the free market fit this
aphorism.)

--Tim May




The Feds have shown their hand: they want a ban on domestic cryptography
---------:---------:---------:---------:---------:---------:---------:----
Timothy C. May              | Crypto Anarchy: encryption, digital money,
ComSec 3DES:   408-728-0152 | anonymous networks, digital pseudonyms, zero
W.A.S.T.E.: Corralitos, CA  | knowledge, reputations, information markets,
Higher Power: 2^2,976,221   | black markets, collapse of governments.
"National borders aren't even speed bumps on the information superhighway."

Tim May <tcmay@got.net> writes:
> Harka writes:
> > [...]
>
> As I recall your point, it was that most people are a few weeks away from
> running out of money and hence cannot change jobs readily. I was saying
> that a small amount of self-discipline and sacrifice can quite easily
> translate into having a few _months'_ worth of savings.

Absolutely.  I recall trying to explain to someone who was prone to
spending money he didn't have:

- if you spend it before you've got it, you'll get to spend less,
  because of the interest you pay in the mean time

- where as if you spend it some time after you've got it, you'll be able
  to spend more because you will accumulate interest prior to spending.

Most people seem to have bought into the credit concept.  Hire
purchase everything.  Their idea of how much they can afford is how
many hire purchase fee structures fit within their current wages.
Same for houses, and mortgages, their idea of how expensive a house
they can afford is determined by how large a loan the bank is willing
to give them on a 99% mortgate over a 25 year mortgage repayment plan.

Well more fool them.

I have no loans.  I bought my house for cash to rent out as an
investment (the house was cheap because I was a cash buyer and one of
those 99% mortgage types had had it repossed from them by the bank so
I bought it at 25% below market value).  I have been working for 20
months (after finishing higher education).  I have enough wealth to
not work for about 7 years at current expenditure levels.  I am
married, and have two pre-school children.  I have a second hand car
which I bought (for cash obviously) for L2000 (you should have seen
the previous car which cost L300).  I have received no inheritances
worth mentioning.  My income is probably lower than most of our US
friends (UK universities do not pay well).  I expect most of our US
friends will be working when they are 50.  I don't figure on being
forced to work to eat at that age.  My liquid assets are invested in
stocks and high interest accounts.  Their's are locked up in fast
depreciating assets: flash cars, big mortgages, consumer electronics,
and in high consumption life styles: eating out, entertainment, etc.

Their life-style choice, their risk.

> If they won't make these spending tradeoffs and have not even a
> buffer sufficient to carry them through a month or two or three, I
> say screw them.

There's some kind of parable in the bible about investments (not that
I'm any kind of religious freak... just it is a reasonable story),
some thing about several people being given a gold coin to look after.
One spent it, another burried it in the ground, and another invested
it.  The person who's money it was came back and took the money off
the one who'd burried it in the ground and gave it to the one who'd
invested it.

Socialism has it in reverse, the one who'd spent it would have had the
government steal it from the investor for redistribution to the
financially foolish one.

Spending every penny before you've got it and then looking around for
someone else to pay the bills is a socialist tendency.  The nanny
welfare state.  Legalised theft from those that have worked to those
who have not.

OK, so maybe you can get a run of bad luck, but that bad luck is going
to hit you much worse if you've spent the next two months wages before
they've arrived.

Adam
-- 
Now officially an EAR violation...
Have *you* exported RSA today? --> http://www.dcs.ex.ac.uk/~aba/rsa/

print pack"C*",split/\D+/,`echo "16iII*o\U@{$/=$z;[(pop,pop,unpack"H*",<>
)]}\EsMsKsN0[lN*1lK[d2%Sa2/d0<X+d*lMLa^*lN%0]dsXx++lMlN/dsM0<J]dsJxp"|dc`

At 4:22 AM -0700 10/25/97, Adam Back wrote:

>Absolutely.  I recall trying to explain to someone who was prone to
>spending money he didn't have:
>
>- if you spend it before you've got it, you'll get to spend less,
>  because of the interest you pay in the mean time
>
>- where as if you spend it some time after you've got it, you'll be able
>  to spend more because you will accumulate interest prior to spending.

This is exactly the "discipline" problem I was talking about. To too many
people, money burns a hole in their pocket: if they've got cash in their
pocket or in their checking account, it's something to be spent. If they've
got multiple credit cards, they see the credit limit as "free cash." So too
many of them are maxed out, or close to be maxed out, on credit cards.

Those of us who think of money as something to be invested, as an engine
for investment growth, have quite the opposite view. Credit card debt is
the worst kind of debt (well, almost the worst....owing money to bookies
and sharks is probably worse).

I also see a lot of fools around me buying lottery tickets and other
state-sponsored gambling ventures. The odds on winning are criminal (these
operations _would_ be criminal if not being run by the state!).  Statistics
show that many of these frequent gamblers--often low-income persons--spend
about $100 a month, on average, in bets.

(Had they instead invested this $100 a month in tech stocks, as I did,
they'd have quite an impressive fund now.)



>Spending every penny before you've got it and then looking around for
>someone else to pay the bills is a socialist tendency.  The nanny
>welfare state.  Legalised theft from those that have worked to those
>who have not.

This is, by the way, why spreading strong, unbreakable, un-GAKked, un-GMRed
crypto is so important. We who have saved need to put our assets beyond the
reach of those who have failed to save...sometimes an Armalite is not
enough, despite what John Young said this morning.

The official U.S. "national debt" (money already spent but not in
possession of the government when spent, hence borrowed from "the future")
is around $5.5 trillion ($5.5 x 10^12). There are 250 million Americans,
but a more important figure is that there are about 100 million taxpayers.
(The rest being children, prisoners, disabled persons, bums, winos, welfare
recipients, drifters, more prisoners, more panhandlers, more on the dole,
etc.).

This means that each and every taxpayer, on average, has a $55,000 share of
this debt, which presumably must be someday paid back.

(There are theories about how this is not actually that much of a debt,
blah blah. I disagree. This debt is much more than the savings or
investments of average taxpayers, meaning, they "owe" more than their
"worth.")

In any case, the story is much worse than this. Because the government has
committed itself legally to cover certain debts and to cover the costs of
certain other obligations, notably pension funds, student loans, and
various financial ventures (savings and loan bailouts, for example), the
actual debt is much higher than the offically reported national debt. The
national debt, for example, does not include the Social Security or
Medicare deficits--the U.S. has been taking in SS and such taxes and
immediately spending them, placing an "I.O.U." into the treasury. These
I.O.U.s will of course have to be redeemed someday, in the sense that the
Baby Boomers, all 60 million of us, are going to start retiring in around
2010 and will be expecting to get their Social Security and Medicare (etc.)
checks. This will correspond to a time when fewer young workers are
available....

The name for this "overhang" is "unfunded liabilities." How large is this
debt? Estimates vary, and official estimates are hard to come by. The
number I have seen reported by reputable actuaries and accounties is, get
this, $20 trillion.

$20 trillion (and growing every year) to cover the promises made, the loans
insured (which are not expected to be repaid by the original borrower), the
pension funds backed by the government, the Social Security and Medicare
systems, the benefits for tens of millions of veterans, the child care
programs, and so on.

Meaning every taxpayer has a $200,000 obligation hanging over him.

This is the situation we have gotten ourselves into.

Some experts have calculated the tax implications of this overhang of
unfunded liabilities. It looks like the average 20-year-old of today,
meaning, many readers of this list, will be expected to pay 50-60% of their
paychecks in 15 years just to service the debt of this overhang.

(I've seen estimates that the tax rate in 2010-2020 will have to climb to
80%, as otherwise there just isn't the funding and the government will
default. This makes certain assumptions about income levels, interest
rates, etc. But the general trends are clear.)

The tax cuts of the past year should not confuse anyone. Nor should the
"national debt is declining" crap confuse anyone. The national debt is not
in fact going down...the last year or so has seen a reduction in the _rate
of increase_, and the budget is close to being "balanced," courtesy of the
recent economic surge. That is, the national debt will, temporarily, remain
at about $5.5 trillion, instead of going to $5.7 T, then $6T, then $6.3T,
etc., as it had been trending toward.

But the overhang remains, and must be paid eventually. (If not paid off,
the interest portion consumes ever-greater portions of spending.)

And the $20 trillion (estimated) overhang of unfunded liabilities will
start to hit hard when these liabilities come due.

So, we as individuals must find ways to protect ourselves from the Coming
Tax Holocaust.

But that's another set of articles.

--Tim May

The Feds have shown their hand: they want a ban on domestic cryptography
---------:---------:---------:---------:---------:---------:---------:----
Timothy C. May              | Crypto Anarchy: encryption, digital money,
ComSec 3DES:   408-728-0152 | anonymous networks, digital pseudonyms, zero
W.A.S.T.E.: Corralitos, CA  | knowledge, reputations, information markets,
Higher Power: 2^2,976,221   | black markets, collapse of governments.
"National borders aren't even speed bumps on the information superhighway."