The Amateur Financier

If you’re an American and haven’t been hiding in the woods, away from all forms of media for the past few years (which seems like a better idea every day, to tell the truth), you’ve probably heard about this push to pass a health care bill to expand coverage here in the good old USA.  Just in case you were crushed under a rock for the past week or so, here’s the latest updates: a reconciliation bill was passed in the House on Sunday, the Senate passed their reconciliation bill today, and as of this writing, the House needs to pass the Senate bill (with its changed language) before it can be signed into law.  Barring something major happening to derail it, it looks as if the bill will be signed into law before this weekend is out.

Obviously, with such big changes being enacted that will affect health care, the economy, and OUR pocketbooks, lots of people have been throwing out their opinions about the whole situation.  Financial Samurai, for example, is in favor of the bill (or at least, the concept of expanding health care), Darwin of Darwin’s Finance opposes it, Kevin of 20s Money maintains that it will be much more expensive than currently expected, and Evan of My Journey to Millions asks if the bill is even constitutional (more on that below, as well as filling the airwaves over the next few months), just for a few examples.  With so much information flying around, I thought I should give the bill a peek under the hood, as well.

What’s In This Thing

If there’s one thing I think I can say for certain about this bill, it’s that most of the people currently commenting on it (myself included), most of the people who will be affected (that would be just about everyone in America), and even most of the Congresspersons and Senators who voted on this bill, haven’t actually read it.  That’s the problem with trying to discuss a 2,409 page bill; unless you have superhuman reading speed (side note: Worst. Superpower. Ever.), you’re just not going to make it through the whole thing.  Luckily, there are diligent groups with teams of readers to do just this sort of thing.  Here’s a summary from Health Insurance Providers that sums up the major aspects of this bill and when they go into effect:

There’s plenty of other sources out there for further review and consideration of this bill; here’s an article from Consumerism Commentary about how the changes included in this law will affect your pocketbook.  If you want to know a bit more about ten changes that are coming this year, here’s a detailed list from Alternet (a left-leaning website); if you’re wondering why anyone could be so cynical about this bill, Investor’s Business Daily has a list of ‘tough’ new rules that will apply, particularly to physicians and business owners.  (Of course, as is often the case in our sharply divided political world, many of the same points are included on each list; what the Left considers a victory, the Right considers a travesty.)

How Will This Affect ME?

Ah, the big question, how will this affect you?  The truth is, there’s no way to know with absolute certainty what will happen (which is why predicting the future is always such a crap shoot), but we can make some educated guesses.  Here’s a few possibilities:

• A young person who don’t want health insurance: Given the fairly low proposed penalties for not having health insurance (starting at $95 in 2014 and rising to $625 (capped at 2.5% of your Adjusted Gross Income) by 2016), there’s a good chance that many of the youngest, fittest people will choose to continue foregoing insurance and just pay the fines.  In other words, this won’t affect you much at all.  (We’ll see how this can cause trouble in just a moment.)
• A person with ‘pre-existing conditions’: Good news for you; as of 2014, you’ll have to be issued health insurance, regardless of your current state of health.  Bonus: you can’t even be charged more because of your health status, so no* worries that you’ll be bankrupted by hospital bills. (*Asterisk added because you’ll still need to pay the ‘regular’ insurance rates, which brings us to…)
• Someone young and healthy, who wants health insurance ‘Just in Case’: Well, here’s the thing: health insurance companies can no longer lock out those who are bad risks (our ‘pre-existing condition’ friend up there), nor charge him or her higher premiums to reflect the greater risk that they will need medical care in the future.  Add in the people like our first example who decides to skip insurance coverage to save money (at least, until they get really sick and fall into category two, then get insurance since they can no longer be denied), and the level of risk in the insurance pool is going to be much higher, with rates that reflect that.  Bottom Line: higher rates than we see now for the young and healthy, the older and sicker, basically everyone.
• Someone getting insurance through their employer: This is possibly the toughest case.  In theory, little may change; with your employer footing much of the bill and agreements with the insurance company regarding coverage for employees, there may not be much of a noticeable change on your end.  On the other hand, with higher levels of risk from individual insurance policy holders and the need for more income to level things out, health care costs could rise for you and your employer.  Add in fairly mild penalties for not providing coverage to employees, and there’s a good chance that some firms will drop health care coverage to save money.  (Which drops you into the category right above this one.)

Again, I remind you, this is just an educated guess on my part; with human nature being what it is, unforeseen events could make the results much better, or even worse.  Of course, we are getting a bit ahead of ourselves here; the bill still has one or two legislative hurdles to jump (and that’s assuming everything comes together), and even then, there are obstacles to clear…

What’s This About Unconstitutionality?

The next battlefield, assuming that all the needed votes are in favor and the bill is signed by Obama (which, if you remember the old School House Rock song, will make our sad little bill friend into a law), then there is the almost certainly going to be someone who takes the case to court on Constitutional grounds.  The main argument, as illustrated in this Cato Institute piece, is that punishing someone for something they did NOT do (in this case, those people who do not buy health insurance) is unprecedented in American history, and may be stretching Congressional law making power too far.

I’ll be completely honest with you: I’m no legal scholar, and while the argument made above sounds reasonable, I have no idea if it will pass the constitutionality test.  If it comes to that, and I think it will, we’ll just need to wait for the court’s decision, and go from there. (Of course, if the court rules that fining someone for not having health insurance is unconstitutional, and this bill is still passed with only those parts excised, the problems illustrated in the examples could end up being far worse.)

My Opinion

Now, finally, it’s time to share my opinion on this bill.  After much thought, I have to say, I’m not in favor.  Don’t get me wrong, I agree with FS on the importance of helping expand coverage so more people are protected.  I just see too many ways that this bill could have the opposite effect, causing insurance rates to shoot up drastically, leading employers to drop coverage, and causing the young and health, the ones most needed to stay in the system to keep it solvent, to leave and fend for themselves, continuing the cycle of rising rates and coverage being dropped.  (I don’t see this as plot to drive insurance companies out of business and leave the government to institute truly socialized medicine, as some have claimed; but it does seem to be a pretty serious flaw in the system.)

All of that being said, though, I’m going to try to hope for the best.  The advantage of being a pessimist is that you’re always either right, or pleasantly surprised; here’s hoping I get pleasantly surprised in this case.  To end on a lighter, more upbeat note, here’s a story about people celebrating the passage of the health care bill like it was Christmas; with any luck, we might all look back and celebrate one day.

In Previous Wacky Wednesday Tales: You traveled to the future as part of a (horribly failed) get-rich scheme, got stuck due to a flawed rental policy (and issues with money disappearing if you withdraw it in the future to prevent yourself from investing it in the past), and finally had to settle on a job grooming talking animals.  Can you finally make it home?

You’ll be the first one to admit it: you hate grooming talking animals.  It would be bad enough having to deal with dozens of cats, dogs, and hamsters everyday even if they never said a word.  Add in the ability to talk, though, and you have all the trouble of dealing with animals AND the joy of having to listen to a constant stream of gossip for the whole day.

It’s not just pets either, as you soon find out.  Animal rights groups, along with those people who promote giving ‘human’ rights to anything with sufficiently sophisticated brainpower, had long since gotten Congress to give full rights to any ‘sufficiently intelligent entity’, be they animal, vegetable, mineral, robot, or sentient ball of light.

Fun thing is, it seemed to be working; while the future was far from a Utopian vision of true and perfect happiness in all things, it seemed to be running pretty well.  In spite of having most of the representatives in Congress being cats and dogs, most issues were settled through calm and rational discussion, rather than screaming, name-calling, and well, fighting like cats and dogs.  You honestly aren’t sure whether to be happy about this seemingly great future, or upset that it took genetically altered house pets to restore civility to government.

Poker Night, circa 2205

Of course, perhaps all is not as it seems; you do hear stories about an insidious ‘Master Computer‘ that’s in charge of everything and secretly runs the entire world (nay, the Multiverse) from its ultra-secret location.  You’re not sure you believe any of these stories, though, because (a) the only ones you hear talking about this type of thing are hamsters (paranoid hamsters, no less), (b) if it were true, wouldn’t the Master Computer try to prevent knowledge of its existence from coming to light (or conversely, just announce its existence to the world and be done with it), and (c) the hamsters claim that the Master Computer was made by Microsoft, so you figure if there WAS a Master Computer, it’s only a matter of time before it crashes.  (Rimshot!)

None of this frivolity or the tedium of styling hamster hair distracts you from your main goal, though: getting enough money to rent a time machine and return home.  (With a possible side trip or two to gather up information to make all your future bets pay off.)  Luckily, although you can’t use the money from your investment scheme to travel back in time, the universe seems to have no problem with you spending that money to survive while accumulating ‘new’ money with which to travel back in time.  You try not to think about this too much, because it makes your head start to hurt when you do.

Still, your hard work pays off.  Thanks to the healthy supply of money you had available from your time travel exploits, your hard work, and the relatively low expense of renting a time machine in the early twenty-third century, you are soon able to save up enough to rent one and put your plans into motion.  (Not a moment too soon; if you had to trim Freddy the Ferret’s nails one more time while listening to his high-pitched insults of your mother, the stabbing would begin.)

You return to the Time Travel Rental Company, busily making your plans to become fabulously wealthy.  Drop a few results of future sporting events in the lap of a younger you along with any money you can spare, travel elsewhere in time (elsewhen?  You never got around to purchasing that time travel grammar book you wanted) and draw away the Time Cops’ attention (by trying to kill Hilter).  Such a great plan, you’re glad you thought of it first.

You open the door to your newly rented time machine when a flash of light appears and WHAM!  A group of time cops are standing there, along with two other versions of you, from the future.  (Or the past?  Really, you’ve completely lost track of the flow of time now.)  They pull out the file they created for your attempt on Hitler’s life (‘Attempted Hitler Assassin #306,751′, it reads), then detail how they found out about your scheme from the future version of you they picked up in the past.

You are about to ask how they caught you before you did anything, before realizing that, ‘Hey, Time Cops’ pretty much sums it up.  Since you didn’t actually do anything seriously wrong (attempting to assassinate Hitler was ruled a misdemeanor a few years after time travel became commonplace), the time police told you that they’d simply release you a few days after you first tried to time travel…

“And that’s why I’m so late getting here.”  You finish telling your story to your fiancee, hoping that this will get you out of trouble for being so late.  After pleading (from you), throwing things (from them), crying (from both), and screaming like a little child (that’d be you again), you realize that maybe telling your beloved about a plan to permanently travel into the future wouldn’t cause less trouble than simply saying you lose your phone.

To Quote Porky Pig, ‘T-T-T-That’s All, Folks!’; hope you had a good time with my somewhat wacky look at the future (here’s hoping I’m wrong about everything!)

Well, it’s good news, bad news time again.  The good news is that my blog is steadily growing, my health is still good, and my fiancee still loves me.  (At least, the diabolical laughter as she tries to tickle me silly seems to indicate love…)  In short, life isn’t half bad for ol’ Roger.

The bad news, I’m still unemployed.  I heard back last week that I didn’t get the job I interviewed for a few weeks ago (which I thought was fairly certain, but apparently misread).  I’m trying to stay optimistic and to keep looking for something even better, but it is a bit disheartening.

Luckily, I still have many sources of joy in my private life, not the least of which is reading through great personal finance blog entries.  Speaking of which, here are some of the ones I likes from this past week:

Good Yakezie Posts

Couple Money Netbook Giveaway – I have a bad habit of not sharing these contests before it’s too late (and sometimes, not entering them myself) so let’s get this out of the way first: Couple Money is giving away a net book to celebrate six months of blogging.  Comment, tweet, and post links by Friday for a chance to win one of the best prizes I’ve seen for these types of giveaways.

TurboTax Promotion and Giveaway for 2009 Taxes – Crikey, another one, this time from Evan of My Journey to Millions (which, if I haven’t mentioned it already, is a pretty cool blog name), who’s giving away some tax preparation software.  If you’ve been slacking a bit on your taxes, consider this your opportunity to make up some time.

Capitalism: A Love Story DVD Review and Giveaway – Yes, one more giveaway that’s still going strong; this time Financial Samurai is giving away some copies of Michael Moore’s latest movie.  An interesting sounding movie, if more likely to enrage than enlighten most of you reading this.

Garbage City – Now That’s Entrepreneurism – Showing that one man’s trash is indeed another man’s treasure, the Garbage City in Cairo sounds simply amazing (as do the people working hard to make a life in its midst).

Why It’s Frugal to Live in Arkansas – Part of a series highlighting some of the hidden frugality to be found in each state of the union.  Arkansas looks like a surprisingly attractive place to retire, with no taxes on Social Security benefits.

Spend & Save: Where Do You Use Your Money? – As always, it’s nice to see where others prioritize their spending, saving, and other money uses.  Personally, I’ve been trying to put a higher priority on savings, but with no job at the moment and household expenses not holding still, that’s a bit tough right now.

The Dark Side of Frugality-Losing Your Integrity – It’s sometimes a fine line between thrifty practices and outright theft; buying clothing, wearing it for a month and then returning them falls in the latter category (not to mention it being a very disturbing habit).

Is Traveling Worth Your Money? – An interesting question; many personal finance bloggers seem to rail against buying material goods while giving travel expenses a free pass.  Is the (hopefully unique) experience really worth our time and money?

Cash And Your Portfolio – A nice reminder that cash, while frequently a ‘holding place’ for money you’re going to invest (or money you have socked away in an emergency fund), does actually have a very important and salient purpose in your portfolio.

7 Stupidest Tax Mistakes to Avoid – Nobody finds a visit from the IRS relaxing (well, maybe a masochist…), so making sure to avoid these mistakes is a good start to getting your taxes done correctly.

Yakezie Carnival Round-Up

It occurred to me this weekend that I haven’t been listing any of the great Yakezie Carnivals in my lists of where my blog has been featured.  To make up for that oversight, here’s the first four Yakezie Carnivals (all of which include one article from yours truly):

Yakezie Carnival 1, from Jeff of Deliver Away Debt

Yakezie Carnival 2, from CJ Bowker

Yakezie Carnival 3, from Daniel of Sweating the Big Stuff

And most recently, Yakezie Carnival 4, hosted by Greg (The Lean Life Coach) on Eliminate the Muda

Thanks to all those who have hosted, and good luck to all my fellow Yakezie Members!

I am a science fiction geek, I am the first to admit this.  I’ve been this way all my life; some of my favorite books and shows as a child were all sci fi or fantasy based.  Since I’m a nerd as well as a geek, I was usually reading a bit above my age level, as well.  One of the authors I particularly liked was Isaac Asimov.

I was recently re-reading Earth is Room Enough, a collection of his stories that, as you might guess, all took place on Earth.  The book was published in 1957, and most of the stories are set in early to mid twenty-first century America.  (Hey, that’d be us)  Of course, it’s a twenty-first century that doesn’t look much like ours; computers run nearly everything, with most people working to service them or feed in information, robots are starting to be integrated into the home, and mammoth corporations have merged with the government to completely dominate most people’s lives (alright, this one isn’t that far off).

Reading through all these stories, you get a fair idea of what the future was expected to look like, at least through Asimov’s eyes.  Looking at what he got wrong can give us an idea of how to avoid making false predictions as we look to the future.  Here are a few things to avoid when you try to think about life fifty years or so in the future:

1) Assume that society will be the same, and only the technology will change – Reading through Asimov’s work, you’d think that the fifties never ended, even though technology has gotten much more advanced.  The women in the stories are housewives or secretaries, the children are all raised by loving parents (and teaching robots) and the technology to record dreams existed for decades before anyone thought to record a pornographic one.  (No, really: that’s a major plot point in one story.)  I’d go into details about the apparent lack of inflation over the past half century, but you get the point.

Now, of course, it would have been hard to predict things like the feminist movement and the rise of divorce (to say nothing of the spread of porn) back in the fifties, when these stories were written.  In the same way, trying to predict today what society will look like by the 2060s is nigh impossible.  About the only thing we can say for certain is that things will (probably) be much different than they are right now; in what way, even the best science fiction writer couldn’t guess.

2) Technology development will continue as it has in the past – Ladies and Gentlemen, meet the Multivac.  A massive (10 sq. miles, according to one story) computer buried underground that is the linchpin of the entire future society, doing everything from finding out the true source of all the jokes in the world (hint: it’s an alien experiment) to extrapolating the voting pattern of a nation from the reactions of one man in 2008.  (Always a man; there’s that old fashioned attitude again.)  A perfectly reasonable prediction based on the state of computer science in the 1950s (at least, the giant, insanely powerful computer bit; the joke and voting thing was just story-telling tomfoolery).

Obviously, that’s not how it happened.  The development of the Internet has spread out computing power, cell phones (which I doubt Asimov ever imagined) have more memory than thousands of fifties era computers that filled entire rooms, and elections still require all of us (or as many as possible) to go to the polling place.  (Heck, we barely seem to be able to make a computer that counts the votes right, let alone extrapolates votes from one person to everyone else in the country.)  The point being: assuming that current traits will continue unabated is wrong.

3) People will fundamentally change: Before you think I’m beating up on Asimov for not knowing what the future would really be like (I’m not; I’m a huge fan, hence this post), let me assure you that he knew people.  The first story in this book, The Dead Past, shows some of his understanding in action.  The nutshell version of this story is that a group of academics, after being stonewalled by a government bureaucracy preventing access to a chronoscope (a device for looking into the past), end up discovering an alternative method to build one, one that can be easily replicated for home use.  (Still taking up nearly a whole room; Asimov was big on, well, big computers.)

In a disturbing (or oddly hilarious, if you have an odd sense of humor) twist, it turns out that the government wasn’t just arbitrarily suppressing this technology for nefarious purposes; they knew that if the technology got out, people wouldn’t use it for research into the long gone past (in this case, the range was limited to 125 years; given that the story was set around 2050, this puts the furthest into the past it can see at the mid-1920s), instead, people would use it to spy on their friends, relatively and neighbors.  It ends with the government agent in charge of suppressing this technology saying “Happy goldfish bowl to you, to me, to everyone, and may each of you fry in hell forever. Arrest rescinded.”

There is an unfortunate tendency for humans to use technology to satisfy their basest desires, indulging their greed, lust, and yes, nosiness when possible.  Almost every prediction Asimov made for how the chronoscope was being used, to spy on spouses, track celebrities, even viewing people at night, has been brought to life through one technology or another.

The Ultimate Lesson

Does all of this mean that it’s pointless to read through old science fiction, or any science fiction at all?  If almost every prediction that’s made turns out be false (and even ones that are mostly correct, like the increasing control of government and corporations over our lives, are subverted in fiction), why both reading them?

Simply this: science fiction and other ‘What If?’ stories help to expand our minds to the possibilities around us.  If we speculate on what might happen as we become more reliant on technology, we can see some of the pitfalls and (hopefully) avoid them.  If we take the trends of today and exaggerate them or follow them to their (il)logical end points, we can see if that’s truly the path we wish to follow.  In this way, looking at the future, or even what writers of the past thought would be here in the present, can give us more insight into who we are, and perhaps we wish to go as a society.

All of that, plus they are pretty amusing to read, even today.