Don’t Quit Your Day Job – Personal Finance, Economics and Investing

Enlightened Discussion for the Night and Weekend Crowd.



On Cigarette Laws and Pigovian Taxes, Part I

The Family Smoking Prevention and Tobacco Control is a newly-enacted federal law that gives the FDA regulatory power over the tobacco industry, among other provisions that attempt to dissuade misleading advertisement on young and old smokers alike. The law was signed into effect on June 22, 2009.

There were two major advertising provisions contained in the law. The first was that over 50% of the front and back of every cigarette pack must be warnings with a giant ‘WARNING’ in capital letters . The second, and maybe more important, is the banning of the use of words ‘light’, ‘mild’ or ‘low’.

How to Pay Off Debt… Stealthily

There are three ways for a government to pay for debt: issue new debt, collect taxes, and cause inflation. Inflation is a ‘hidden tax’ on a populace- it decreases the value of future money, and allows governments to pay off their current debt with devalued money. The United States dollar, as the world’s reserve currency, gives the United States a unique temptation (opportunity?) to pay off their debts in a currency it can print. What exactly is inflation, though? And if you believe inflation is on the way, how do you set yourself up to counteract it?

Milton Friedman’s Permanent Income Hypothesis

One of Milton Friedman’s most influential and revolutionary theories was his challenge to the traditional Keynesian consumption function, which includes simple after-tax income as a variable in the consumption. Friedman countered, however, that those who consume today take future taxes, price increases, salary increases, and other factors into account. This is summarized in his Permanent Income Hypothesis. More specifically, this counters that people consume based off of their overall estimation of future income as well as opposed to only the current after-tax income.

The Minimum Wage Mistake

Next month, the minimum wage in America is going to raise from $6.55 an hour to $7.25 an hour. The $6.55 to $7.25 jump is the last of the increases to the minimum wage under the Fair Minimum Wage Act of 2007. The minimum wage is a sexy law; politicians can stand hand in hand with the lowest income workers and say, “I’m fighting for you!”. Unfortunately, the low income workers are holding the hands that hold them down.

A Modest Proposal – More (Gas) Taxes!

Assuming reducing the United State’s usage of oil is a worthy task, the method used to go about it is all wrong. CAFE standards mandate the production of a certain class of vehicles… generally smaller and more efficient. However, there is no disincentive to convince consumers to stop buying the larger, more inefficient vehicles. Read on for a look at some of the myths and solutions to this interesting problem…

Atlas Shrugged, Machinery Stopped

Posted by PKamp3 On July - 4 - 2009ADD COMMENTS

What can be said about this book that hasn’t already been said? Even if you disagree with Rand’s philosophy of Objectivism, her book Atlas Shrugged, published in 1957, predicted a great number of the extraordinary economic events that have occurred in recent months.

This article will share with you a few quotes from the book which hopefully will inspire thought – either for or against – her philosophies. Enjoy.

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Are California IOUs Constitutional?

Posted by PKamp3 On July - 3 - 20092 COMMENTS

Yesterday, California started to issue IOUs (technically, registered warrants) to creditors since it is ensnared in a major budget impasse. California has taken this step before, most notably in 1992, but they also issued IOUs during the Great Depression.

Since the warrants are unavoidable at this point, I’ll shift my focus to another issue- constitutionality. Is what California is doing legal under the terms of our Constitution? And what is a ‘bill of credit’?

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On Cigarette Laws and Pigovian Taxes, Part I

Posted by CameronDaniels On July - 3 - 2009ADD COMMENTS

The Family Smoking Prevention and Tobacco Control is a newly-enacted federal law that gives the FDA regulatory power over the tobacco industry, among other provisions that attempt to dissuade misleading advertisement on young and old smokers alike. The law was signed into effect on June 22, 2009.

There were two major advertising provisions contained in the law. The first was that over 50% of the front and back of every cigarette pack must be warnings with a giant ‘WARNING’ in capital letters . The second, and maybe more important, is the banning of the use of words ‘light’, ‘mild’ or ‘low’.

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Hedge Your Gas Prices

Posted by PKamp3 On July - 2 - 2009ADD COMMENTS

I’ve written plenty about gasoline lately, but only about gas taxes. Let’s shift gears a bit… Do you think gas prices will increase? If gas prices increase, is there a way for you to hedge against that increase so it doesn’t affect you? Of course!

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Interview With an Ex-Con

Posted by PKamp3 On June - 30 - 2009ADD COMMENTS

Everyone’s got prison on their mind!

With Bernard Madoff in the news due to his 150 year sentence for running a massive ponzi scheme, the floodgates have been opened in terms of the number of prison related articles in the news. In this article I’ll share with you some of them I found most thought provoking, and maybe I’ll even throw in a few thoughts of mine. Today I offer you this offbeat post about prison.

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Carnivals, Week of June 29

Posted by PKamp3 On June - 30 - 2009ADD COMMENTS

The article “If You Don’t Have One… Get One” has been featured in the 211th edition of the Carnival of Personal Finance! Check out the carnival, and the hosting site, Green Panda Treehouse. The theme is a good one too…

“Of Risk and Men”, an article about the state (and the state of the budget) of California, was featured in the 71st edition of the Money Hacks Carnival. Check out the carnival, and the host, The Canadian Finance Blog.

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Jevon’s Paradox, and More Ado About Gas Taxes

Posted by PKamp3 On June - 30 - 20092 COMMENTS

If I told you that increased fuel efficiency leads to more fuel consumption, what would you think?

Jevon’s paradox states that increases in the efficiency of the use of a resource lead to the increased usage of that resource. Throughout history, examples of this effect in action can be found. This brings me back to the topic of the gas tax. If you are of the belief that we need to reduce our consumption of gasoline, increased efficiency (and attempted legislation to increase efficiency) alone will only lead to more gasoline usage. If less gasoline usage is the goal, only a tax on gasoline will make it happen.

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Health Care Reform Part 4: Prescription

Posted by PKamp3 On June - 28 - 2009ADD COMMENTS

In my mind there are two issues that need to be addressed in any successful health care overhaul. First, costs have to come down so health care stops costing $7,900 per person and increasing at a rate faster than inflation. Second, access to health care needs to be expanded to include the 21 to 46 million people without insurance. Since it is my opinion that the health care system needs an overhaul, what should that overhaul look like?

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Health Care Reform Part 3: Stacking the Deck

Posted by PKamp3 On June - 28 - 2009ADD COMMENTS

Government participation in the private insurance market is a trojan horse for a single payer system.

The debate that needs to happen is not private options versus a public option in insurance, it’s private options versus a single payer system. No, private insurance will never go away completely, but any public option will soon become much larger then originally planned under a public option. Private insurance will become relegated to supplemental programs which build on top of (and react to the inefficiencies of) a government run plan.

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No matter what the final estimate for Health Care reform is, it will cost a lot more.

The bills being written already carry price tags so high it’s mind boggling… $1 trillion over ten years, even $1.6 trillion over ten years. A large number like that seems to convey honesty and straight-talk, yet probably only scratches the surface of what will be a much higher bill. Recall: Social Security was sold to the American public as a 1% tax on the employee and employer, scaling up to 3% on each in 1948. How close are the rates to 3% now? Well, employers and employees both pay 6.2% in tax and Social Security is now the largest expenditure in the federal budget.

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“Don’t Quit Your Day Job” is a resource for people who wish to discuss personal finance, economics, and investing with other like minded individuals. It isn’t required that you work in the industry; just that you have an active interest in passing on your knowledge or learning from others. Disclaimer: Nothing on this site should be construed as investment advice. Do your own due diligence. None of the writers on this site is qualified to give you advice on your situation. Your situation is unique; see a financial adviser. Copyright 2009. InfoPortfolio, San Jose, CA.