Thursday, January 7, 2021

Pro quarterback Tom Brady gets $1 million in PPE money plus tax break, but no tax breaks for distressed student loan debtors

 According to CNBC, Tom Brady, the Tampa Bay Buccaneers' highly-paid quarterback, got a check for $960,00 from the Smal Business Administration's Payroll Protection Plan. Why? Because, besides playing football, Mr. Brady owns a sports and nutrition company.

Does Mr. Brady need the money? Earlier this year, he signed a $50 million two-year deal to play football for the Buccaneers.

And Mr. Brady gets a tax break that goes with that $960,000 check.  Brady and everyone who received a PPP check can deduct their business expenses for the year, even if they paid those expenses with the federal government's free money.

Is this a great country or what!

Meanwhile, nine million student-loan debtors who are enrolled in long-term income-based repayment plans (IBRPs) have enormous tax bills hanging over their heads.  

IBRPs allow college-loan borrowers to make monthly payments on their loans based on their income. If they make regular payments for 20 or 25 years, the balance on their loans is forgiven. However, the amount of forgiveness is considered taxable income by the IRS.

I do not quarrel with Congress's COVID-relief legislation. Perhaps it is good public policy to give Tom Brady a million bucks while my relatives get a lousy $600.

I just hope my children and grandchildren will become rich enough someday to qualify for government handouts.





Tuesday, January 5, 2021

Every Person in Debt Deserves to Be Treated With Dignity, essay by Steve Rhode

 Written by Steve Rhode

 Originally published at Get Out of Debt Guy


We assume that it is wrong not to treat others with kindness in all corners of life. For example, in the U.S., we no longer have separate entrances based on your skin color. Buildings make allowances for physical limitations, and a recent news story said that more people had developed a tolerance for others’ religion.

But we could make some advances in learning to treat people in debt with dignity. I’d have to say that currently, society treats debtors as losers and if debtors were on a ledge getting ready to leap, a crowd below would be yelling “Jump!”

The majority of people without financial problems love a little debtor voyeurism and witness others’ financial misery. It’s like watching the train wreck through cracks in your fingers as you hold your hand over your eyes. You don’t want to watch, but you do.

Imagine if suicide was like debt, and when you were contemplating killing yourself, your creditors kept calling you and say things like “you are a loser” or “just do it and good riddance”? That’s some pretty cruel mojo. Maybe we should call the overweight kid that is depressed and yell, “fatty, fatty” into the phone. Now that is some intense and insensitive cruelty.

Why is it when people are in financial trouble that we can’t wrap our arms around them and treat them with care, compassion, and respect? We should. We all should.

If you’ve never been deep in debt and afraid, unable to sleep, on the verge of an anxiety attack, and depressed, it might be hard for you to imagine what life is like during those dark days of debt. While some might put on a mask, most people are ashamed, unhappy, and afraid inside.

Being in debt is modern-day leprosy.

When you can’t spend money as you used to, and people don’t seem to be around as much, your life changes in a way that you perceive to be for the worse and when you’ve got to move because you can’t afford the rent, it’s like being hustled off to the leper colony. You’re now isolated for all the wrong reasons.

I can’t think of any time that I’ve ever seen someone post a sign in their front yard that says, “Hi Y’all, we’re so broke we can’t afford to live here anymore, and we are getting kicked out.” Actually, what I’ve seen more of are foreclosed homes with everything left behind, including wedding pictures and the belongings of evicted people left by the side of the road for passerby’s to pick through. Ashamed people flee.

Debtors deserve dignity. I’m not saying that we need to give anyone a free ride in life. I’m just saying that people in debt are wounded and deserve to be treated as you would anyone in a difficult time or a fragile moment.

Being in debt is a mathematical position with emotional manifestations. Being unable to pay your bills is not a casual reality for most debtors. People in debt want to pay their bills, they do, but they can’t see a way, or they are not emotionally ready to make those hard lifestyle changes to meet their new obligations.

Being unready or unprepared to make changes to get the numbers to line up does not make you a bad person. It just makes you someone that, for some reason, is unwilling to make some difficult choices right then.

Being in debt is about managing depression, despair, and loneliness. I’m not saying that all debtors feel that way, but most do. Being in debt is about a loss of self-esteem and self-confidence. It’s about being unable to make a plan, stick to it, and make it happen.

The emotional pain of being in debt robs us of our own dignity. The rest of society does almost nothing to help cradle the debtor with love and compassion to soften the blow and ease the journey.

Debtors are losers. Debtors are rejects. Debtors are liars. Debtors are a failure. And all of those statements are uttered every day by people, and none of them are true. Instead, they are like the insensitive bully’s schoolyard shouts that leave scars for life on fragile minds.

Debtors do have a duty to find a solution to make the pain and misery through change. But that can be like asking someone with a bad back to run a marathon.

Being in debt is a thing, but being a debtor is personal, and debtors deserve to be treated with dignity and compassion while helping towards a solution.

Doing something nice today, give a debtor a hug.


Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.  You can read this essay on Mr. Rhode's web site at https://getoutofdebt.org/21762/debt-with-dignity.

Saturday, January 2, 2021

Say goodbye to your golden years: 100 million Americans have no retirement savings

According to the  National Insitute on Retirement Security, more than 100 million Americans have no retirement savings whatsoever. 

As Diane Oakley, NIRS executive director, observed:

The facts and data are clear. Retirement is in peril for most working-class Americans . . . When all working individuals are considered--not just the minority with retirement accounts--the typical working American has zero, zilch, nothing saved for retirement.

The NIRS partly blamed the 2007 recession for the bad news. But the report was issued in 2018--before the coronavirus put millions of people out of work.  Over the past year, Americans have dipped into their savings and their retirement accounts just to pay today's bills.

 A 2019 survey also reported bad news for American retirees. A GobankingRanks survey concluded that almost two out of three Americans (64 percent) will retire broke. And--shockingly--nearly half of the people surveyed said they'd didn't care!

Clearly, millions of Americans are not preparing for their retirement years. Many workers don't make enough money to fund a retirement account, and others are overwhelmed with consumer debt--home mortgages, car payments, and credit card bills.

And student-loan debt is a significant contributor to Americans' precarious financial status. More than 40 million people have outstanding student debt, and less than half that number are paying it off. Nine million student-loan debtors are in long-term income-based repayment plans, which means they will never pay down their loan balances.

What is going to happen to all these impecunious Americans when they reach retirement age?

A great many will just keep working until they die or become too incapacitated to be a Walmart greeter. Others will tap the equity in their homes or draw down their meager savings just to pay their utility bills. Some will move in with their kids--who will have their own financial troubles.

As a recent New Yorker article noted, there is a growing movement to increase the minimum wage to $15 an hour. I hope Congress does exactly that.

Nevertheless, even if the minimum wage is roughly doubled, elderly Americans who work full-time at Wendy's for $15 an hour will generate just enough income to keep them above the poverty line.

Working on their feet for eight hours a day will be difficult for people in their seventies.  Many will have to pop Chinese-manufactured Advils to keep their arthritis under control.  But it can be done.

But the days when Americans referred to retirement as the Golden Years are over.  For many Americans, their last years will not be golden. They will be difficult, bitter, and depressing.

photo credit: finance.yahoo.com



Friday, January 1, 2021

Post-Modern America is as vicious and dysfunctional as Victorian England, the Weimar Republic, and 17th century France

If you get your news from network television, you are being bombarded by commercials about prescription medicines and financial services. 

These ads typically show prosperous older Americans who look remarkably fit, live in lovely homes, and spend their days cooking gourmet meals, wind-surfing, and flyfishing with their adorable grandchildren.

These advertisements purport to show life in 21st century America--the best of all possible worlds where everyone is healthy, happy, and financially secure.

But I don't live in that America, and you don't either. Instead, most of us live in a society that is remarkably similar to dysfunctional regimes of bygone centuries.

Our government is printing money at a frightening pace to prop up the financial markets, much like the Weimar Republic did in the 1920s. And we know how that turned out. Germany experienced runaway inflation that set the stage for Adolph Hitler.

We may celebrate the fact that the United States abolished debtors' prisons, but 21st century America treats debtors much the way England treated them in the Victorian age. 

We don't deport debtors to Australia or put them in jail as England did in Charles Dickens' time, but we've created a virtual prison for student-loan borrowers, millions of whom are trapped in income-based repayment plans that last 25 years. Compounding student-debtors' misery, our supposedly benevolent Congress has made it almost impossible for insolvent student-loan debtors to get relief in the bankruptcy courts.

And the American tax system is remarkably like the tax regime in Louis XIV's France. W.H. Lewis, who wrote a masterful social history of seventeenth-century France, described the French tax structure this way;

[T]he whole fiscal system was in itself radically and incurably vicious; as a contemporary remarks, if he Devil himself had been given a free hand to plan the ruin of France, he could not have invented any scheme more likely to achieve that object than the system of taxation in vogue, a system which would seem to have been designed with the sole object of ensuring a minimum return to the King at a maximum price to his subjects, with the heaviest share falling on the poorest section of the population.

Doesn't that sound like the American tax system? Sure it does. As financial tycoon Warren Buffett has repeatedly observed, he pays federal taxes at a lower rate than his secretary.

And the COVID pandemic didn't change the system at all. Indeed, the latest coronavirus relief package includes 100 percent deductibility for the so-called "three-martini lunch." Think about it: wealthy Americans can write off extravagant meals that can cost more than $1,000, while the working stiff gets a $600 coronavirus-relief check.

 In short, although Americans may deceive themselves into believing that our society is evolving into a paradise based on the principles of equity, diversity, and inclusion, in fact, we live in a world not so very different from Victorian England, Weimar Germany, and 17th century France.

Louis XIV: Is everybody happy?


Saturday, December 26, 2020

Happy New Year! Your middle-class status has been revoked and a college degree will not get you reinstated

 As 2020 comes to a close, you may think 2021 will be a better year. And if you are among the nation's wealthiest Americans, things look pretty rosy.

But if you are a middle-class person, next year will be worse for you than 2020.

First of all, as Charles Hugh Smith pointed out in a recent online essay, the middle class is an illusion. If you think you are in the middle class, you have been deceived. In fact, you are in a "phantom middle class," a class of permanent debtors.  

Over the past 40 years, earnings for the top one-tenth of one percent of Americans has grown 15 times faster than income for the bottom 90 percent.  Wages as a share of the national economy have been going down for the last half-century. 

You know that because you saw how wages went up for your parents' generation, but are not going up for working people today. 

Or as Mr. Smith put it: 

If the top 10% own 90% of the wealth and has captured virtually all the income gains of the past 20 years, then isn't it obvious America has no middle class? What the traditional middle middle class . . . owns is debt . . . .

Nowhere is this more obvious than when we look at the massive debt that gullible Americans have taken on to get a college degree in the pathetic hope that a diploma would get them into the middle class or keep them from falling out of it.

As Mr. Smith pointed out, Americans are burdened by "$I.7 trillion in student loan debt burdening those who bought the narrative that a college diploma was a passport to the security of the middle class. The debt load carried by those clinging on to aspirations of middle-class security is staggering."

Indeed, "burdening powerless students with uncertain futures with trillions in high-interest debt would have been viewed as criminal two generations ago, but now it's celebrated by those reaping interest from precarious debt-serfs."

The poor saps who have been plunged into poverty by their student loans cannot discharge their debt in bankruptcy courts, and they got nothing but crumbs from Congress's so-called coronavirus relief legislation.

College presidents--most of whom make more than half-million dollars a year, whined to their legislators about how much the pandemic was costing them, and Congress bailed them out. But did even one of these charlatan bozos urge some relief for their ex-students who are groaning under the burden of student loans they can never repay? No, they did not.

If Americans graduated from colleges and graduate schools with useful skills, they would earn enough to pay off their student loans quickly--within 10 years at least. But they are not acquiring practical skills--especially if they majored in the liberal arts or the social sciences.  

Again, Mr. Smith:

As for possessing skills, much of the workforce has few producer skills, as the consumer economy devotes inordinate attention not to producing but to marketing, speculation and complying with counterproductive regulations and bureaucratic file-shuffling.

But our fun-house economy cannot continue indefinitely with the superwealthy exploiting the rest of us while the government prints money and runs up the national debt--now pushing $28 trillion. As Smith observed:

Once the con of printing trillions of dollars out of thin air dissolves and the nation has to balance its books in the real world, these file-shuffling and speculative skills will no longer generate meaningful income.

Those of us in the bottom 90 percent of the nation's earners can do very little to stop the downward spiral in our wealth and income.  But at least we can advise our children not to take out student loans to get worthless college degrees, useless MBAs, obscenely expensive law diplomas, and meaningless doctorates.

Does Harvard President Larry Bacow have anything to say about student debt?









 

Tuesday, December 22, 2020

The $900 Billion COVID-19 relief bill: Did Santa Claus forget you this year?

 Congress passed a $900 billion COVID-19 relief bill yesterday.  It is almost 5,600 pages long, so most of our national legislators weren't even able to read it. 

The bill has the usual benefits we expected, but it contains other goodies that have nothing to do with the coronavirus. Those goodies added another trillion dollars to the bill's cost.

Who got the pork? Schools, colleges, and universities got $82 billion, the airlines got $25 billion, and the entertainment industry got $15 billion.  

And foreign countries got some money too. Ten million dollars went to Pakistan for a gender program. Venezuela is getting $33 million for “democracy programs," and the formerly Soviet Republic of Georgia will receive $132 billion.  

Hey, the Palestinians will get a cool quarter of a billion the nation of Sudan will get a little something as well.

Is there anything in there for you and me? Perhaps, a little, but the non-relief portion of the COVID-19 relief bill is actually larger than the amount that went to distressed Americans.

Did any one of our 535 Congressional representatives think to add a provision to this mammoth bill that would prohibit the Department of Education from garnishing the Social Security checks of elderly student-loan defaulters? Did anyone think about amending the Bankruptcy Code to allow insolvent private student-loan debtors to discharge their college loans in bankruptcy? Did anyone think to pass some legislation to clean up the for-profit college industry?

Apparently not. 

Isn't it Congress's job to take care of suffering Americans and to put their needs over the whims and desires of special interest groups, not to mention foreign governments run by people who hate us?

Sorry, pal. I gave my last Christmas present to the Ukrainians.

Monday, December 21, 2020

Living the good life with Fielden Poolaw: The Merchants Club, two quarts of Coors, and a teen hop

Several teenagers in my hometown struggled with alcohol when I was growing up, but I only knew one: Fielden Poolaw, a classmate of mine at Anadarko High School. 

Fielden was a Kiowa with a copper complexion and elongated earlobes that looked like someone had stretched them. He wore his hair short and went around in a rumpled, grey trench coat, which he rarely took off. The trench coat gave him a vaguely sinister appearance, which is probably the look Fielden was going for.

About one out of five kids at my high school were Natives, but the white kids and the Indian kids lived on different planets. Fielden, however, had a couple of things going for him that bridged the gap between the white world and his Kiowa world. 

For one thing, Fielden had an evening job taking tickets and popping popcorn at the Redskin Theater. Fielden sometimes let a few of his friends slip into the theater without paying, and he occasionally gave out free bags of fresh, hot  popcorn—heavily seasoned with orange popcorn salt.  

And Fielden had another thing going for him. He was the leader of a gang of Indian kids who hung out at the Redskin.  These Indian boys--probably popcorn addicts--swore an unspoken oath of fealty to Fielden. He could dispatch them on a moment’s notice to rescue any friend who was getting harassed or bullied—and there was a lot of harassment and bullying going on in Anadarko when I was young.

So Fielden was a handy guy to know. But he only dispensed his favors (protection and free popcorn) to his friends. So how did someone become Fielden’s friend?  By providing him with something he desperately needed—transportation.

Fielden was too poor to own a vehicle, and he depended on white kids to drive him around in their parents’ cars on the weekends. I was one of Fielden’s chauffeurs, and I often drove him around the drag—the endless loop between the Tastee Freeze Drive-in on the east side of town and the Powwow Drive-in on the west side.  

As I said, Fielden drank way too much. He was generally stewed when I drove him around on the weekends. I don’t think he ever carried a gun, but he pulled a claw hammer out of his trench coat once, telling me cryptically that he was expecting trouble.

I liked Fielden, and I wasn’t afraid of him. When I was with him, I felt like I was on the precipice of a great adventure; and in fact, Fielden and I experienced an adventure together—at least a minor adventure.

One Friday night I was driving Fielden around in my father’s 1950 Chevrolet pickup—a death trap that constantly leaked brake fluid. The truck had once been black but had turned an orange-gray color. The undercarriage was so rusted that there was a hole in the floor, and I could actually see the road beneath me when I drove. It had a faulty alternator that I had to pound with a pair of pliers to get the engine to crank.  Oh yeah, it was a dreamboat—a real chick magnet!

On this particular night, Fielden collared me to drive him to the teen hop at the Caddo County Fairgrounds. This was an easy assignment because I was going to the teen hop anyway—the King's Men were playing. 

But Fielden had a stop to make before the teen hop. By a series of grunts, he guided me down an alley behind Broadway Street and told me to stop at the back door of  the town’s most notorious bar—the Merchants Club!

Yes, the Merchants Club—the seediest of Anadarko’s seedy bars. The Merchants Club—a bar with an attitude-- which kept its double front doors flung wide open so that all of Protestant Anadarko could peer into its dark and smoky maw in the hope of seeing a neighbor sucking down a Coors, a Jax, or a Stag, accompanied—we hoped--by a woman other than his wife.

But, of course, our neighbors didn’t hang out in the Merchants Club. It was a bar for Indian men, and a middle-class white guy would be nuts to go inside.

Perfect place for Fielden, however. And I knew when we drove up to the Merchants Club’s back door where he had been getting his booze. Fielden mumbled a stern order to wait and then slid silently into the back door of Hell itself. 

I waited and I waited. And then, through the pickup’s rear window, I saw an Anadarko cop walking down the alley, checking for unlocked doors. He was carrying one of those long, heavy flashlights that double as a nightstick. Uh oh!

The officer tapped the window glass with his flashlight. “What are you doing here, kid?”

I was terrified. What in the hell did he think I was doing behind the Merchant Club? Buying booze? Cocaine? Soliciting a prostitute? Planning a burglary?

My mind reeled with the shock of adrenalin, and for once in my otherwise dull-witted life, I did some fast thinking.

“Officer,” I said, “my truck won’t start.”  

Then I explained how beating on the alternator would sometimes get the engine to turn over. The cop said he had seen that problem before and offered to help. I raised the hood on the most dangerous and ugly truck in America and started beating on the alternator with a crescent wrench, while the cop shined his light into the engine compartment.

Then I quickly scrambled back in the truck, turned the key, and the engine cranked right up.  “Thanks for your help, officer!” 

And in fact, he had been helpful, and I felt bad about deceiving him.

But where was Fielden? To hell with Fielden, I thought. I’m getting out of here.

And then, with almost perfect timing, Fielden came out of the backdoor of the Merchants Club with two quarts of Coors Banquet Beer, bottle tops peeking coyly out of brown paper bags. My heart stopped beating

If Fielden was surprised to see the cop, he didn’t show it, and the cop didn’t seem surprised either. The cop didn’t say anything. Fielden didn’t say anything. And I didn’t say anything. Fielden climbed in the truck, and off we went.

About five minutes later, Fielden and I were at the teen hop. I parked the truck, and we bought our admission tickets—a buck apiece.  I had had enough excitement for the night, and I began drifting away from Fielden, hoping to lose myself in a crowd of dancing Oklahomans.

But Fielden followed me—lurching across the dance floor with a quart bottle of Coors squeezed under each armpit and concealed beneath his trench coat. 

Then, when he was only about two feet from me, an enthusiastic girl doing the Twist—I think she was from Fort Cobb—bumped him.

Fielden’s arms flew up and two quarts of Coors crashed on the concrete floor. Flying glass went everywhere. The bottom of Fielden’s trench coat was drenched in beer.

Fielden had been trying to tell me something just before the beer bottles broke. What was it he wanted to say? I’ll never know because a squad of Rotarians, the teen hop’s zealous chaperones, hustled him out into the darkness.

A few months after that memorable evening, I went away to Oklahoma State University, where I wasted four more years of my life. Fielden stayed in Anadarko and slipped deeper and deeper into alcohol.  He died in Florida at the age of 33. I think he was in rehab at the time.

I learned that Fielden was buried in the cemetery next to the Redstone Church, situated below a bluff that overlooks the Washita river.

Did Fielden die a Christian? I do not know, and I do not care. And, at this stage of my life, I feel sure God doesn’t care either.

But what the hell do I know? Fielden and I spent hundreds of hours driving around Anadarko together, and I don’t think I ever asked him a single question.

Nevertheless, if there is a heaven, I’m sure Fielden will be there. After all, paradise would not be paradise without fresh, hot popcorn, seasoned with orange popcorn salt. And nobody popped popcorn better than Fielden.