Leif Terry

Today is my birthday!

Nicole got me a bunch of great presents - books on economics, the Lord of the Rings boxed set, and an Ipod Video just to name a few.
The Ipod is an amazing little device - it has more hard-drive space than the computer I'm typing on now. It's stylish and very easy to use - just what I'd expect from Apple.

In a follow-up to this post:
http://leifterry.livejournal.com/17780.html



Brat needs a new home. He's about 13 years old, no front claws, in good health.
He's living in the East Bay now but is willing to travel.



If you or anyone you know can take him, please contact me: leifterry@livejournal.com or any of the usual methods.



Thank you!

Nicole and I spent a couple of weeks looking for a new car for her.
We spent a lot of time doing research and trying to find the best car that suits our needs.
We looked at sedans and wagons, hybrids and even small SUVs - from Subaru to Lexus.

Then she bought a 2003 BMW Z4.

I love her. She's crazy.

Nicole got in an auto accident today. No one was hurt, thankfully, but her car was badly damaged and will probably need to be replaced.

Either she buys a new car or I give her my BMW and I get a new car.

Nicole has a commute, I don't. She likes the idea of a hybrid, but she also likes the idea of fast and shiny. We don't have kids... yet but we probably will in three years.

I haven't been in the market for a while, I don't know what's out there.
Suggestions anyone?

There are a couple of political blogs I read everyday.

http://www.thismodernworld.com/
By cartoonist Tom Tomorrow with frequent guest contributors.

http://www.bobharris.com/
Bob Harris, a This Modern World regular, has his own site.

I recommend these to anyone.
You won't find angry ranting. You won't find lies and distortions.
You will find news and well-reasoned discussion from a liberal point of view.

In particular, this recent post by Mr. Harris sums up my feelings on America's foreign policy better than I ever could.
http://thismodernworld.com/2518

I have never seen the sky as beautiful and blue as it was today.

Nov 3rd 2005 is the one year anniversary of me packing up all of my worldly belongings and moving cross-country to live with Nicole.

It's been a wonderful year. To celebrate, we went to a quiet romantic dinner at a very nice restaurant in Decatur.

Afterward, we went on a short walk and I showed Nicole a sculpture called "Valentine". It's a sculpture about long-lasting love, about old love.

I said, "This is what I want for us."



Nicole sat down on the bench beside the couple and I kneeled in front of her.
Then I presented her with a diamond ring.



"Will you be my wife?", I asked?
"Absolutely", she said.
Then I put the ring on her left ring finger, replacing her claddagh.



We cried and laughed and kissed and giggled and cheered.



The we went home and called our parents.

I'm sorry that you are reading this here and that you haven't heard from me personally. I've wanted to tell everyone but haven't had the chance yet.

Grow old along with me the best is yet to be.
- Robert Browning

Lots of things going on in the brain. Here's one:

The images of Katrina showed a world-view where the weakest of society suffer.
The question it raises is one of what role government should play when calamity visits.

There are those who say that the government should do nothing, that everyone needs to take care of themselves. "No handouts" say those of a libertarian mind.
We have a situation where people are suffering - the poor, the weak, the elderly, the
unlucky. Our government has awesome resources at our command that could greatly help the problem. Yet we do very little.

The Republican leadership is breaking with their philosophy and doing a little to help the victims of the hurricane and flood, but it is a short-term public relations gimmick - it runs counter to their stated policy.

Katrina was a huge catastrophe, but families are visited by smaller ones everyday. These smaller catastrophes (unemployment, illness, bankruptcy) can be devastating. In each of these cases, the government is doing less and less to help those affected. These small but are rarely televised, but if you look at the images from Katrina, you know what it looks like.

On Saturday, I asked Nicole's father, Karl, for his permission to marry her.
He was delighted.
Nicole's mother, Shelia, gave us a ring that had been in their family for generations. I need to get some of the stones reset, but it is quite lovely.

I haven't ask Nicole "officially" (she's a bit of a stickler for paperwork), but now I have everything I need.

My friends here are saying that I'm "pre-engaged".

I'll be in San Jose for business again next week. One of the many consequences of working for a company that is, in fact, in San Jose. I'll arrive Tuesday the 21st and leave the morning of the 28th. I'll be working most of the time, but I hope to see a few people while I'm out there.

Nicole got me a tattoo for Christmas. I just got around to getting it done. It's about the same size as my other tattoo, on the opposite side. Thank you Nicole!

I've considered the turtle to be my totem for some time now. The Hawaiian honu design is my favorite turtle iconograph.

In other news, Ankloysauruses are like huge spikey turtles. Ironically, they are not my favorite dinosaur.

I'm going to be in San Jose on business next week May 23rd - May28th. I'll be at the working at the office most of the time but I do hope to make it out a bit in the evenings and should be able to see some of my friends.

Friday evening I walk down the hall to get a drink of water. In the middle of our hallway I find a tiny baby mouse - less than two weeks old. I have no idea how he got there. The door was open, but Rickles the dog was sleeping in front of the door. Did he tiptoe around the sleeping dog? Even if he did, how did he climb the steps to the house (which sits well above ground level)? Was he dropped there by his mother? Or a cat? Perhaps he was born somewhere in the house? I have no plausible answer.

He was weak, and not going to make it on his own. Nicole and I did what we could to make him comfortable. We put him in the cardboard box that my DSL modem came in. We gave him water, hay and kitten formula. We even got up at 5am to feed him. He took a little formula and for a while we thought he might have a chance of making it.

The next day his condition deteriorated rapidly.
He was curled up in my pocket when he died, 24 hours after we first found him.
We buried him in the back yard with the flowers.

RIP Squeek 2005-2005

I'm planning on being back in the Bay from March 7th to March 11th for the Game Developers Conference.
While I'm there I'll be trying to see old friends and visit old haunts.

I could use some space to crash in.
If anyone wants to provide lodging for me, please write me and let me know. Thanks.

Here's a little summary of the current debate. Hope that helps.

All credible parties agree that:
* People are living longer, which is bad for Social Security.
* That the number of beneficiaries per worker is rising, which is bad for Social Security.
* Productivity per worker is rising, which is good for Social Security.

Reasonable people might disagree about:
* When and if these factors will cause a problem, and how big that problem might be.

All credible parties agree that:
* Social Security is predicted to go cash negative around 2018. At that point Social Security
will start to call in some of the loans it has made to the Federal government which will be
tough on the budget.
* Social Security is predicted to run out of funds between 2042 and 2052. Since under current
law, Social Security can only lend, but not borrow, it would have to reduce benefits at that time.
* Estimates of these two dates have been made for decades and have always been wildly
pessimistic.
* The projected Social Security deficit is much smaller than the current Federal deficit.

Reasonable people might disagree about:
* That Social Security could be described as being "broke" or "bankrupt".
* That this is a "crisis".
* That this is more important than other issues - such as the Federal deficit.
* That this should be dealt with now and not, say, around 2018.

All credible parties agree that:
* Bush's plan consists of two factors: "private" accounts and benefit reductions.
* Private accounts would cost trillions of dollars to implement.
* Social Security's financial outlook could be improved by tax increases or benefit cuts.
* Bush has ruled out tax increases.

Reasonable people might disagree about:
* Whether partially private accounts would have any positive effect at all.
* How to come up with the trillions of dollars necessary to create private accounts.
* Whether we could possibly come up with that money at all.

-Also-

Reasonable people might disagree about:
* Whether the current Social Security system favors one race over another.
* Whether the private accounts proposed are analogous the Thrift Savings Plan for government employees.

Would you believe Bush if he went on national TV and promised every American a brand new car?

I wouldn't.
Sure it sounds great. In fact, too good to be true.
Of course, it's absurd. Where would he get the money?

Unfortunately, he pretty much already did exactly that.

A conservative estimate of Bush's proposal is that it will cost $3.5 trillion to implement.
$3.5 trillion is enough to buy a $20k car for 175 million households.
So for that money, we could keep Social Security the way it is and buy every American voter a new car.
Another way of looking at it, is that every American voter will have to *give up* a brand new car to finance this gigantic debt.

The punchline is that privatization won't do much to improve Social Security's outlook. The biggest improvement comes from the proposed benefit cuts which would just as well without the expensive private accounts.

I don't know what he's up to, but it's not what he says it is, and I don't like being lied to.

Bush has called for partial privatization on the order of 4% - about 1/3 of the current tax.
People will put about 1/3 less into the SS system and essentially keep it for themselves. Their SS benefits will be reduced, presumably by 1/3.

However there are a couple of generations (roughly everyone aged 20-65) who have paid into the old system and are promised SS benefits who won't be able to take full advantage of the new private accounts. People retiring soon will need to continue to draw benefits from the old system, but that system would have it's income dropped by 1/3. SS would lose about $200 billion a year (at first) and would quickly exhaust the trust fund. The deficit would lessen over time as the new private accounts grew to fill the gap and after about 50 years, disappear forever.

A rough estimation of these "transition costs" is about $5 trillion - more than the US takes in two whole years of taxes. The SS "trust fund" could cover about $1.5 trillion, leaving a $3.5 trillion gap.
This is not a small detail, but it was completely absent from the speech.

If we do not allocate that $3.5 trillion, Bush's plan would quickly "bankrupt" social security. It would become not some hypothetical problem 40 years out, but a large real deficit in the next decade.
If we do allocate that $3.5 trillion, it's not clear how Bush will make good on his promise to keep spending low and reduce the deficit even modestly. Adding that 3.5 trillion to the national debt would put the entire country at risk of bankruptcy.

The President is about to give his annual State of the Union address. In the past he's used this as an opportunity to tell bald-faced lies to congress and the American people. I hope he shows himself to be a man of virtue this day, but I am not optimistic in this regard.

No doubt he will discuss Social Security, one of my areas of interest.
I can't respond now to what he will say. I don't know if will address the issue candidly or bend the truth to push an unrelated agenda.

I can offer two very plain facts, which may be useful in determining the difference.
* There is no urgent need for reform.
Social Security is projected to meet all of its obligations until 2042 (worst case projection).
At that point, it will have enough income to cover about 73% of its obligations. It will then either have to reduce benefits, raise taxes, or borrow to make up the shortfall.

However, the Federal government is currently meeting only about 70% of its obligations!
If 73% is a "crisis" in 40 years, then 70% must be an even bigger crisis today!

So either you believe that we presently have a real Federal budget crisis which is much larger and much more important than any hypothetical Social Security crisis, or you have to acknowledge that Social Security is in pretty good shape and probably always will be. Either way, there's no pressing need for Social Security reform and it would be dishonest to imply that there is.

* You can't get something for nothing.
Personal accounts would strip trillions of dollars out of the Social Security system. That money would have to be made up by borrowing or by drastically reducing benefits.

The stock market cannot be expected to make up the difference. The stock market can't grow faster than the economy, and if the economy grows at an optimistic pace then Social Security wouldn't need to be reformed in the first place. Any additional return would be small, and would be mitigated by the risk of a stock market collapse - the kind of disaster that led to the creation of Social Security in the first place.

Borrowing doesn't make any sense either. If you could make risk-free money by selling treasury bonds and putting the proceeds in the stock market, who would buy the bonds?

Money doesn't get made by transferring it around from account to account. If the president wants to change the system, it's up to him to discuss who would gain and who would lose. To omit those details would be dishonest.

Some people derisively refer to Social Securiy as a Ponzi scheme. It's true that Social Security does have some similarities in that newcomers pay for people already in the system, which is one property of Ponzi schemes.

However Social Security is clearly not a pyramid scheme. A pyramid scheme needs to grow exponentially to sustain itself. Since it can't grow forever, it eventually collapses.

Social Security does not rely on growth to continue. It can even withstand a (mild) contraction. All that is required is that people continue to be born, work productively, retire and die. Those expectations are quite realistic.

One of the objections raised about Social Security is that it has unusally low returns.

This is not really true.

jasontromm calculated that Social Security returns -1.23% on his taxes.
Assuming that he is correct, if you pay in $1000 taxes to Social Security, you will only get an estimated $987.70 back when you retire.

This overlooks an important point:
If you pay $1000 taxes to bomb Iraq, you will get $0 back to pay for your retirement, an unimpressive -100% return!

But aren't my Social Security taxes supposed to pay for my retirement while other taxes pay for things like the military?
Not exactly. Your SS taxes do pay for retirement - but not for yours. They pay for the generation ahead of you.

Your returns are lower, but for people who are retired now, who paid little into the system, the returns are phenomenally great.

Suppose you're part of a dinner club of 6 people. One night each week one member cooks for all of the rest. After a 4 weeks, four people have eaten four times but cooked for six - a terrible return on their "investment"! However two people have eaten four times and cooked zero - they receive a wonderful "return". This doesn't mean that the dinner club is inefficient, in fact it is probably very efficient.

Comparing the "returns" from social security to return on the stock market is a misleading comparison, because it ignores the millions of other people who current benefit from SS.
If you include everyone, Social Security, like the dinner club, performs quite well. It's funds are invested in "risk-free" US Treasury bonds and it keeps more money that it needs, just in case. Economics tells us that the safer an investment is, the less it will return. Social Security is very very safe, as is should be.

You can argue that you shouldn't have to pay for social programs which don't immediately benefit you, just as you can argue that you shouldn't have to pay for bombing Iraq. In either case, you would have more in your pocket to invest. For this reason, all taxes can be considered inefficient. But as taxes go, SS isn't a particularly bad one.