4/16/2013 Daily US Cash Deficit

The US Daily Cash Surplus for 4/16/2013 was $24.4B pushing April 2013 to a surplus of $8B, now $1B ahead of last year through the same number of business days. Strong revenues is the big story here with the haul over the last two days exceeding the same period last year by $19B. Looking at the month to date, net revenue is up $24B, good for a 14% increase. Corporate tax deposits are up 27%, and tax deposits not withheld are up 25%.

2013-04-16 USDD

Surprisingly, tax deposits withheld are only up 2%, which is a trend we saw earlier in the month as well. If that doesn’t end the month a lot closer to 10%, it could be a red flag that part of the sizable revenue increases we have seen in 2013 are not sustainable, and are just a one time spike caused by income being pulled into 2012 to avoid the 2013 tax hikes. The test will be May-June, which are far enough away from 2012 and tax season that we should be able to use them as our first clear YOY snapshot. If we still see across the board revenue increases over 11%-12% in May-June, it would provide some indication that at least for now, the 2013 tax hikes have some staying power. If instead we see a steep dropoff, watch out, because the CBO is projecting 11-12% annual revenue growth for 2013-2015. If they are wrong, every forecast you’ve heard from both sides of the aisle about deficit reduction over the last few months can be junked.

4/15/2013 Daily US Cash Deficit

The US Daily Cash Surplus for 4/15/2013 was $48.9B… a huge day by any measure, and a $32B improvement over 4/16 day 2012  which rang up an $17B surplus. Needless to say, $48.9B far exceeded my expectations…I double checked twice to make sure I had it right. A little googling sheds some light…tax day last year was actually 4/17, due to the 15th being on a Sunday and Emancipation Day on the 16th. (Now I remember!!) The two day surplus for the 16th and 17th last year was $56B…It does seem likely that 2013 will exceed that, but because of this timing issue, we are probably going to have to wait a few extra days for the dust to settle. Bottom line, it appears to be a very good start to this phase of the Tax season (deficit wise…not so much for taxpayers)…let’s sit tight and see how it finishes. We should continue to see healthy tax revenues for the next few weeks before we fall off the wagon again in May.

2013-04-15 USDD

Social Security: Crappy Deal…Getting Worse

CNN MONEY reports
“Up until now, Social Security has been a windfall for many retirees: They collected far more in benefits than they shelled out in taxes.
That’s changing. Many of those retiring will have paid more into the coveted entitlement program than they will get back.”


“The imbalance will get more pronounced for future generations of retirees. Couples now in their early 40s will have forked over $808,000 in Social Security taxes by the time they retire, but get back only $703,000 in benefits.”
Let me translate this…basically, the Ponzi scheme that is Social Security, now 78 years old, is now in its death throws. I’m not predicting it will actually end anytime soon, but this is definitely the beginning of the end. Someday, the young will begin questioning why they are paying so much and getting so little and revolt…or, maybe they won’t and it will simply go bust because the math dictates that it will.
Just a quick thought before I forget…what does it say about our society…that rather than taking personal responsibility for our own retirement, and as a backup depending on our family units..(kids, grandkids, nieces nephews siblings ect..). we have instead chosen to entrust our livelihood in old age to universally despised politicians who usually poll somewhere around 20% or so. That’s pretty messed up….just sayin. What the hell are we thinking?
Moving on to the numbers…I’m pretty sure it is actually way worse than what this report suggests because they more or less ignore the opportunity cost of holding on to your own money. So let’s look at a person who makes $50k per year He pays 6.2% as does his employer….don’t be fooled by Uncle Sam’s accounting funhouse.. you pay for both in the form of lower wages. So our average wage earner pays $6200 per year in Social Security Taxes, from 22 until he retires at 67. For simplicity, let’s ignore inflation…in his wages, and in his payout…they should more or less wipe each other out anyway.
So over this persons 45 year career, he pays a total of $279k into the program. When he hits 67, he is now eligible for ~14k per year….for the rest of his life. If he dies at 70….obviously this was a really crappy deal. If he makes it to 87, he more or less breaks even…that is…he could have literally put $6200 under the mattress (or maybe in a non-Cypress bank account) for 45 years and done just about as well as social security. If you happen to live longer than 87…still ignoring any other investment options you could have done with that $6200/year…maybe you start to get more than you paid in.
Yes…the math is terrible idea for just about everybody…which of course is why they have to force you to participate. Now, imagine if our worker, rather than stuffing that money in a mattress, decided to instead use that money to pay off his mortgage early. So, at 22, he decides to purchase a house for $125k(2.5x his annual income) with a 5% 30 year mortgage. His monthly payment is $671, which he makes, plus $6200 per year of extra payments. By the middle of year 12, his house is paid for…completely. He saves about $80k in interest, has a paid off house at 33, and now, has ($671*12+6200) over $14k per year…which he can now start stuffing under his mattress. If he does this for the next 18.5 years (when his mortgage would have ended), then proceeds to only save the 6200 per year until he is 67, he will have about 360k under his mattress, which would fund him at social security level payments until he was almost 93.
And remember, this is assuming all he ever did was pay off his mortgage early, and stuff the rest of the money under his mattress. No stocks, bonds, or even cd’s and saving accounts in this portfolio. So one wonders why this program exists at all. I touched on that a bit in Uncle Madoff Sam’s Trust Fund. Basically, I believe the program was created as an excuse to create a new source of government revenue. It gave them the ability to tax a broad base at a relatively low rate…in exchange for the promise to take care of you when you got old. Of course, back then, you were probably dead before you hit 60…and if you did happen to make it to 60, you were lucky to have a few years left. So of course government pocketed the taxes, and was happy to pay out a few $ here and there to those who managed to live long enough to “retire.” Social Security became a huge cash cow…and continued to be until just recently. By the end of this decade, it will instead be a huge cash drain.
This huge sham of a program simply needs to be scrapped, perhaps in a phased manner, and responsibility for retirement needs to be shifted back to individuals and their families. Problem Solved. In the meantime…the only thing for certain is that there will be pain.

Kindle Fire HD 8.9 Review – Great If You’re 6 And Happen To Love SpongeBob Squarepants

So If you read my last post, you know this isn’t a complete coincidence, but I thought today would be a good time to review a product I picked up about a month ago…the Kindle Fire HD 8.9. I have an original Kindle Fire from when they were first released, and I have to admit, I have yet to read a whole book on it yet….most of them I simply gave up around 6% or so. After about 15 months, I have no real complaints about the original Kindle, which has been used primarily as a child’s toy. My older kids (4&6) use it primarily to watch Netflix and play games (some learning…some not so much). For that, it works fine.  Occasionally I will use it for light web browsing, but honestly prefer a laptop, or better yet, a laptop plugged unto a couple 27” monitors. But in a pinch, it will work.
I had been thinking about getting another Kindle for a few months…sharing was becoming a chore as the kids get older, but was having a hard time justifying dropping $300 on a kids toy. After all, that was more than the Windows 8 laptop I am writing this on cost, which has a way bigger screen, a real keyboard, and it can run excel pivot tables linked to an access database with millions of records….none of which the Kindle was going to be able to do.
Two things changed my mind. First, they dropped the price to $269. Second, and more influential, a co-worker told me about Kindle FreeTime Unlimited. For $3 a month, if you are a prime member, you get unlimited access to a ton of kid friendly books and movies, plus a handful of kid friendly aps. Books was the biggest thing that interested me. Every night, I read the kids books, and after 6 years, I have become sick of reading the same books over and over (and over). New books are expensive…easily $5-$10 a pop…no thanks!! The library is like 10 miles from the house, through town, which makes it a couple hour round trip, and at least a couple bucks of gas. Late fees and lost books are always a possibility. So for $3 a month (plus a $269 Kindle), there are at least hundreds of new books to read, I’d guess around a thousand,  though half of them seem to be Sponge Bob Squarepants 🙂
The other good thing about Freetime is that once you put it on Freetime “mode”, the kids are locked into the freetime selection of Books/aps/movies and can’t get out without a password. On the original Kindle Fire, some of the games always end up sending them to a web page to buy more things….they can’t without a password, and they aren’t old enough to get into anything on the internet they shouldn’t (yet) but Freetime provides a mechanism to essentially lock them out of everything they don’t need access too anyway, while maintaining access to everything they want.
I had originally planned to get either the regular Fire (159) or the Fire HD (199), both with 7” screens. I am glad I spent the extra $70…it makes the 7” screen look puny, and makes reading books easier on my aging eyes. Sound is definitely improved….I am constantly having the kids turn it down because I can hear it loud and clear from across the house.
There are a few quirks I should mention. When I am done reading a book for the kids, to get out of the book and back to freetime, you need to touch the screen, which brings up the menu button. Unfortunately, over half the time, it just changes the page for me. Maybe there is a magic swipe pattern I haven’t mastered?? Oddly, my son does not have this problem…he tells me “it only works for kids”. Hmmm.
Finally, some petty complaints. It does kind of suck that Freetime unlimited is somehow not compatible with the original Kindle Fire.. “How Convenient…. riight” Oh well…hard to increase GDP without a little planned obsolescence. Second, it didn’t come with a wall charger, just a USB charger…as if you had time to plug it into your computer to charge? Of course, for $10-20 they will send you one. No thanks. It so happens that between phones and the old Kindle I have about a half dozen compatable chargers…come on Amazon….you are already losing money on every sale…what’s another $0.43?
So in conclusion, if you are sick of reading your kids the same 50 year old books your parents read to you when you were a kid, and you don’t live close to the library, and your kids aren’t starving, and you don’t think it is utterly ridiculous to spend $269 for a children’s toy, then the Kindle Fire HD 8.9 might just be what you are looking for.  For what it’s worth, and these may be famous last words of a curmudgeon/accountant, but in my opinion, no tablet will ever be capable of doing “real work”…. though I am fully aware that plenty of people don’t consider accounting or blogging real work anyway…they are probably right. Whether I am crunching numbers, pivoting tables, or writing a blog post about how I think bicycling is the stupidest form of exercise known to man, I want two 27” monitors, a keyboard that I can bang on without breaking, and a mouse with the precision to perform open heart surgery…on a real mouse. Also, I want it all to be cheap (so no apple products please).
Just one warning…my 4 year old daughter stumbled upon the original Power Ranger’s series (mid 90’s???) in the Freetime video library and quickly became hooked. Now she wants to be a pink Power Ranger when she grows up and has a hard time resisting the urge to practice karate on her big brother….who isn’t all that amused… Don’t say I didn’t warn you!!