raining molten plastic

Ask and you shall receive?

2008-03-19T15:00:00.000-07:00

Way to go guys

Laughing all the way

2007-12-18T10:30:00.000-08:00

So what is it with these silly Republicans claiming that we need to lower taxes to boost the economy? How much can lower taxes really help? Doesn't that just hurt our deficit?

Let's do some research and see if we can clear this up.

First off, what taxes are we talking about? There's all kinds of taxes. Salary, Corporate, Estate,

The Bush tax cuts. Some say it only helps the rich, others claim it helps everyone. Lets go look at the horse's mouth. It's all public record. According to news stories, these tax cuts were signed into law in 2001 and 2003. For 2001: H.R. 1836 [107th]: Economic Growth and Tax Relief Reconciliation Act of 2001 2003: H.R. 2 [108th]: Jobs and Growth Tax Relief Reconciliation Act of 2003 Also, in 2004, there was: H.R. 1308 [108th]: Working Families Tax Relief Act of 2004

Did you go look at any of them? Incomprehensible, really. Well, there are always summaries. And where better to get a summary than WhiteHouse.gov itself.

There's a fun chart at the bottom. It has all kinds of asterisks, and disclaimers, but it can show you at least the intent of the code. Let's examine the singles, and make our own graph for it.

If you make	You were paying	Now with Bush's Plan	You saved
0-$6000	15%	10%	5% or $0-$300
$6000-27,050	15%	15%	Nothing!!
$27,050-65,550	28%	25%	3% or $811.50-$1966.50
$65,550-136,750	31%	25%	7% or $4588.50 - $9572.50
$136,750-297,350	36%	33%	3% or $4102.50 - $8920.50
$297,350+	39.6%	33%	6.6% or $19625.10 +

Now, let's see who we're screwing. Here's an interesting place to start - the census bureau. The average American in 2005 earned $47,845. That means on average, the American people saved $1435.35 each. Of course that's not the whole truth by a long shot. The average American could be 5'9'' tall but I am not going to see those extra inches any time soon.

Ok, unfortunately, the census bureau, does not have a complete set of who earns what. I had to interpolate linearly to fit our tax brackets, and I extrapolated out everybody who earns more then $100,000 a year, using an exponential function (I found from the data that if y = the percent of the population making x amount of money, y= 6.3426 e^(3x10^-5 * x)). Still, the information is probably not a bad estimation:

First, let's meet our tax brackets

Tax Bracket	#of people	% of the Total Population	Total Amount Made($millions)	% of Total Salaries made
0-$6000	24,705,000	11.84%	$68,298	0.74%
$6000-27,050	84,415,000	40.47%	$1,344,386	14.57%
$27,050-65,550	70,302,000	33.70%	$2,973,592	32.23%
$65,550-136,750	22,702,000	10.88%	$2,006,246	21.74%
$136,750-297,350	2,825,000	1.35%	$478,700	5.18%
$297,350+	3,631,000	1.74%	$2,354,855	25.52%
Total	208,581,000		$9,226,077

Now, Taxes. How much would each group pay under each plan?

Tax Bracket	Tax Pre-Bush ($millions)	%Total	Tax under Bush($millions)	%Total	Saved ($millions)	% of Total Savings
0-$6000	$10,245	0.37	$6,830	0.29	$3,415	0.89
$6000-27,050	$201,658	7.28	$201,658	8.44	$0	0.00
$27,050-65,550	$832,606	0.04	$743,398	31.12	$89,208	23.31
$65,550-136,750	$621,936	22.44	$501,561	21.00	$120,375	31.45
$136,750-297,350	$172,332	6.22	$157,971	6.61	$14,361	3.75
$297,350+	$932,523	33.65	$777,102	32.53	$155,420	40.60
Total	$2,771,299		$2,388,521		$382,779

Those Percentage Columns represent the tax burden. Just for fun, lets subtract them. Remember, a negative number means that person would have less of a responsibility for the country's taxes.

Tax Bracket	Change in Tax Burden	% of the Population (as a reminder)
$0-$6000	-0.084	11.84
$6000-27,050	+1.17	40.47
$27,050-65,550	+1.08	33.70
$65,550-136,750	-1.44	10.88
$136,750-297,350	+0.40	1.35
$297,350+	-1.11	1.74

One more thing...see that last number in bold on the totals? That's how much revenue we didn't collect under Bush's plan that we could have under the old one. In order to make that up through salary, these tax cuts would have had to be responsible for stimulating the economy enough to make everyone's salary increase by and average of 16% in one year. I dunno about you, but I haven't seen anyone handing out 16% raises.

More tomorrow.

A Yankee in...

2007-12-14T09:52:00.000-08:00

Little known fact about me...Actually, everyone I know knows this fact, but none of you do yet. So I'll share. I was born and raised in a sleepy little town 30 miles outside of Boston. I currently live about the same distance from New Orleans. I was here during Katrina. This is going to take more then one post, I know...

The "South" is nothing like in the movies. It is nothing like TV. It was immediately obvious that people have much more subtle accents then portrayed, and younger people who watch TV have mostly lost it. My husband made a concerted effort to rid himself of his parents' and grandparents' drawl. He says that no one wants their brain-surgeon to sound southern, and he's right. I have always had some pride in my Boston accent, - it makes me feel like a part of a smart, strong heritage. I can't imagine being embarrassed by where I was from, it's too big a part of who I am, but I also can't say that I know how to change the stereotype of a backwoods southerner.

People who visit always remark at how friendly everyone is down here. They're wrong. People aren't friendly. People are polite. There's an overwhelming sense of "Whatever you do, don't be rude". They will tell you to go to hell, and then offer you cake. Of course, the same thing happens in New England, but it takes on a different form. In Boston, I would stand in a crowded subway every morning, in silence. It was more polite to ignore everyone next to you, because to acknowledge their existence was to intrude into their privacy, their personal space. Store cashiers were generally busy, underpaid people, and the most polite thing to do was to have your stuff arranged neatly for checkout, pay promptly, and let them move on to the next customer as fast as possible. Here, I had to make a concerted effort to smile as I walked past people, say 'hi' to the greeters and 'how are you doing' to the cashiers and waitresses. Rather then anonymity in public, it's considered polite to treat every person as a person. It's different, I know. I don't know that one or the other is better.

There are poor people. Poor people, and homeless people. They are not the same. A disproportionate number of the homeless people that I have seen are crazy. Like most college kids, I lived in a bad neighborhood for a time. A man lived in the doorway of a building across the street. The day we moved in, it was obvious that we were messing up his day. He pawed at his face, rocked and moaned. He had a thin pipe that he banged on the concrete walk. I was alarmed, and thought about calling someone, but my husband talked me out of it. Who could we call? The man was harmless enough, interacted with few people, and getting him sent to jail probably wouldn't do him any good.

So he sat in the doorway, one block down from the half-way house where inmates crowded at the fence to surreptitiously buy drugs from the dealers in the area. I knew they were dealing, and so did my husband, and I am sure every person on the block. We called the police a couple of times to report shootings in the area. Once, on New Years, the police took 2 hours to get there, and seemed surprised when a couple of white kids answered the door. They said that it was so dangerous, they didn't like coming through. Which is too bad, because it could have used the patrols more then the gated communities 4 blocks over. Mostly though, we stayed in our house, didn't make noise, and we weren't bothered. I was glad when we left.

Falling Robots

2007-12-11T07:51:00.000-08:00

Whenever my husband goes off into a daze, if I ask him what he's thinking about, he says "Robots". I think he picked it up from some pop-culture reference, and I guess when I think about it, I don't really care what he's thinking about, I just wanted to talk.

That being said, there are some interesting things to consider about Robots. And I'm not talking about the huge industrial robots that stay in one place and have an arm that places delicate electronics. Or the pallet movers that roll continuously along the same track in a warehouse and scares the contract workers. I'm talking about progressing to the point where the "I, Robot" robots are commonplace enough that I don't have to spend all of my free time putting the clothes from the washer to the dryer, going grocery shopping, and replacing all the dead flowers in my back-yard.

Honda has made some great strides towards the friendly humanoid robots with Asimo.

The other day I was watching a bird on our fence from the kitchen window. For one reason or another it had enough of the view of my overgrown grass, and it just tipped right off the fence, into a long parabolic dive. It came out of it right at the bottom, fluttered its wings, and disappeared.

That's when I realized that Honda and probably many people attempting to teach our robots how to walk are missing a critical point. Asimo can walk, yes, in that pre-defined lift up your leg, move your foot forward, place it down, shift your weight kind of way. But that isn't even close to how people, animals, or even birds for that matter, move!

Walking is all about learning how to fall properly. You throw your weight forward, and catch yourself with your leg. Babies fall so much not because they can't move their feet, but because they haven't learned how to catch themselves. Teenagers become clumsy right around the time when they grow three inches in a year. Their center of balance changes enough to make them have to re-learn how to predict how they fall. Even as an adult, standing for long periods of time hurts mostly because you are in a constant state of falling, and using minor muscles to readjust your balance.

To truly copy a human motion, you would have to enable a robot to learn how to push itself up from the ground, stand, and know how far it has to put its foot out depending on if it wants a casual stroll, a run, or someone pushed it hard from behind and it doesn't want to tumble. That isn't anywhere near as easy as simulating walking by pre-programing the motions in x-y coordinates. It would require an AI learning system that just doesn't exist right now, but I don't think it's outside the realm of possibility.

The future's not walking robots. It's falling robots.

Spore and More

2007-12-06T08:19:00.000-08:00

The other day in the car, my husband and I were discussing procedural generation. Imagine my surprise when I found my conversation online at cracked.com courtesy David Wong.

Essentially, Will Wright wowed everybody with Spore. Rather than graphics artists drawing every pixel, the computer has instructions on how to generate graphics, and mechanics on the fly. Here's some more footage:

Speaking of wowing, I am getting incredibly bored with WoW. World of Warcraft is great, the graphics are pretty, but I really can't bring myself to do one more dungeon, or kill 9 more rats. And the octagonal trees around sweeping Night-elf building #16 (you know the one, it's the mirror image of sweeping Night-elf building #15), they're just becoming stale. As great a game as it is, I am bored. The best part about it is the PVP, and I think it's just because of the unpredictability. Although when things are unpredictable, you have the potential for frustration, as in last-night's Arena match (0-10 baby!).

Well, here's my million-dollar idea for the day. Picture a nice large world. Made with computer instructions that places trees and grass created with some kind of fractal algorithm instead of the octagons (no real reason, just cause I'm picky). An old-time dungeon and dragon philosophy (anti-leveling, anti-grinding), combined with user-created missions/dungeons. Essentially, said million-dollar company hires graphics artists and brilliant computer programmers to design something that my creative friend "Scott" from down the street can use to put together the kind of story-line we used to have with dice and pizza on his mom's coffee table.

He should have all sorts of things at his fingertips - like being able to plunk down a convincing elf-house with 3 NPC's inside who walk around, make a fire in the fireplace, sit in the randomly placed chairs, and startle when you come in the door. They ask you what you think you're doing, you explain, and it goes on from there, right down to a boss with 6 arms to fight when you only have 5 people. Or something.

He can work on that all week while us less creative folk work on wandering around the pre-made portion collecting useful objects. Then we all get together online on Saturday, run out to the rock with a star carved on it, in Eastern-Wherever that he's linked his masterpiece to, and we go on a quest he's put together. If we love it, we rate it well at the end, and other groups with less creative and more busy friends can play it. To avoid frustration, it would have to scale to the group, much like writing web-pages in em instead of pixels. As fun as killing the 1 millionth rat and seeing an epic drop is, I would kind of like to explore a dungeon designed for all warriors. Or all support classes. Or nothing but undead. Or with a running joke.

Just one more application of the power of procrastination.

The First One's Free

2007-12-01T11:55:00.000-08:00

Sitting in the airport on our honeymoon after a fun trip through security, I found myself staring glassy-eyed at the news on the television monitors. Please understand, we do not have cable at our house, and this makes me ultra-sensitive to the bright flashy lights of modern entertain-news.

The subject of the minute was the rising cost of college tuition. They said how it's been going up really fast, and everybody's worried, and that was about it. That's when today's million-dollar idea hit me. I know how to fix it.

You see, in a fit of desperation and depression a few years ago, I tried to sell life-insurance. It was an unqualified disaster, but I did pay $300 to take the course, and I walked away with a better understanding of the mechanics of insurance. Here's the plan (baby-style, so as not to tax my brain too much) :

1) Life insurance always pays out. Ok, forgetting about term-life which only pays out if you die during the term, and cons which won't pay out one way or the other, LIFE INSURANCE POLICIES PAY OUT. You're gonna die. We don't know when, and that's the "risk" game, but if you pay us 'x' amount now then WHEN you die, (not if), your family gets 'y' amount of money.

Basically, what the insurance companies do, is take your money, and all the money of everyone else they can sell policies to, and they pool it. And then on average, people die at so-and-so many per year. They might have to pay out early to a 30 year old, but they're pretty sure that most of the people will last at least into their 50's and more likely longer then that. So on average, they have 20+ years to invest it your money, and make more then they will pay out to you at the end. Here's the tricky part. You always get more then you put in. That's because your individual account earns money, they don't take all of the interest, just most of it. It's not much, but it's probably better than your savings account. And it's way better then just assuming that you're going to have 20+ years to save up, and leave your savings account to your family. I dunno about you, but the minute my savings account accumulates a significant chunk of change, I'm going to default to my mother's mantra which is "Why wait till you're 60? Enjoy it now." (yes, that has created problems now that she's 60). That brings us to #2.

2) With College, there is no question of When. You know within months when your newborn is going to college. Easy: 18 years. The question becomes "How much?". How much do you need to save for your kid's education? And can you do it? The risk that is taken here is not saving enough either because rates rose more then you thought, or because you are not talented/responsible enough to save/earn/beg/steal the kind of interest necessary.

So how much do you need? That depends on what kind of education you want your kid to have, and how much debt you want your kid to graduate with. If you're like the people I work with, the answer is: "They'd better get a scholarship." Or "When they're 18, they're on their own". But it seems to me that if you've brought a kid into the world, spent 18 years teaching them your values, watching them grow, having them make you proud, you'd be an ice-person to want them to spend their 20's and 30's and 40's drowning in the kind of debt the kids today are going to be have when they graduate. If they even go. You don't want your little genius to end up working in fast food do you? So you probably intend to save at least a little.

Ok, so I've convinced you. Nothing less then Ivy-league for little Jimmy Jr.. Lets look at the math:

Private School Tuition in 2007 costs roughly $24,000/year. It has been growing pretty steadily since 1996 at 5.5%, with a peak in 2001 of 8%. Take the average plus a standard deviation, and you could probably bet that a conservative estimate for growth is 6.9%. If Jimmy was born in 2007, then college starts in 2025, and his private school tuition will be $78,320 for his first year, $83,689 for sophomore year, $89,427 for junior year, and $95,558 for his senior year. Heaven help you if he's a 5th year senior. For these 4 years, he'll cost you $346,994. That's ok though, cause I haven't adjusted any of this for inflation. It'll be more then that. Actually, wait. That's more then my mortgage. I'm paying $1800/month for 30 years for a $250000 house debt right now. Jimmy might get a degree but he won't have any money left over to take care of you. Fair's fair.

3) Here's the business model. You pay me (or not me, I have no experience in the financial industry. Someone better then me who steals my idea). You pay me $600 a month from now until little Jimmy goes to college. I guarantee you a small percentage return minimum, just like your friendly neighborhood bank. Say, 4% which is even better then your bank. $600 for one kid seems high, though. Two kids is $1200/month, 3 $1800/month. There's my mortgage again. Still, kids are expensive, and if you budget it in, it might work. Or maybe public school is ok, that would only be like, $200 a month.

If Jimmy doesn't go to college, or you change your mind and decide to throw Jimmy to the wolves, or Jimmy gets a football scholarship, you get your payments +4% compounded back. Look-it how nice I am.

Meanwhile, for 18 years, cost of school has been going up at 7% a year. You've gotten raises, you've paid off your car, and you're not buying diapers anymore, so the $600/month isn't that bad. And then Sept. 2025 rolls around - what happens? You don't pay anymore. Right at the time all the other parents are scurrying around filling out FAFSA forms, making their kids write essays, and join beauty pageants, (eh hem), scholarship contests, you can stop making your payments. You're finished. We'll pay for school for you, whatever it costs.

At the 4% interest rate you'll have $198998 in your account available to you. Jimmy could say screw college, take that and start a business. Or go to a cheaper school and keep the difference, buy a car. Or go to the most expensive private school in America, and we'll cover it. 'Cause with the power of amortization, we know what percentage of our clients are going to do what, and we've been planning.

I've had 18 of investing your money, and what is actually available to spend is the 8% we've been trying to beat, $308, 164. Still not quite $346,994, but after year 1 we've made some more interest, and after year 2, some more, and all told we'd actually make about $4000 profit per account after 18 years.

But you see, my insurance company ACTUALLY makes an average of 10% a year. We're smart, we've got smart people, and we put all our money in oil stocks. No not really, but investing is an insurance company's real business and if you can't turn 10% you should quit and go write columns. If I can make 10% on your $600/month, I'd make $127,000 profit even after I paid for Jimmy's tuition. Or I could have just been skimming the profit off for 18 years, while I wasn't paying anything out of that premium pool.

4) Could it work? It's already been done. You might never have heard of it, though. There were a couple of companies in the Philippines, CAP and PPI, that went bankrupt when the cost of college was deregulated and rose 1200% in a year. Not good for projections, but we're probably not in danger of that in the US.

Several states have state-run programs that allow you to buy credits of tuition for your young'ns. Florida, Alabama, Colorado, Kentucky, Pennsylvania, South Carolina, West Virginia, Mississippi, and Texas all have some form of pre-paid tuition program. Some are well managed and doing well. Some are state-subsidized like Louisiana's "send everyone who's smart to college" TOPS program. Most if not all (I haven't checked) require that Jimmy stay in-state and go to public school to take full advantage of the program. Some colleges themselves allow you to lock yourself in to the college, and start paying at today's rates. That's great, but what if Jimmy doesn't want to go to Harvard, or (gasp) doesn't get in? Not guaranteed any more.

5) More fun business side thinking. Why stop at public/private programs? It's almost as easy to amortize for room and board. Add that as a rider. Save for graduate school, or med-school. Offer a program where if you save half with me over the course of 5 years, I'll guarantee to finance you the rest when you graduate. Make deals. A really large national corporation ought to have the clout to talk to colleges and universities, and find ways to lower the costs of tuition, or at least make it increase at a stable-enough rate, better then your average parent.

Play tax games. I have no idea what kind of tax incentives could be negotiated one way or the other, but I'm sure someone would have a field day convincing the government how good an idea this is. I mean, everyone who pre-pays essentially removes themselves from the pool of people who need financial aid. That could even help with admissions. I betcha my Jimmy could get in easier with border-line grades if he was paid-in-full.

Use technology and cut out the middle-man. Make it easy to sign-up online, and give each user an account with fancy graphs and graphics that show how much they've got saved. Don't even use an agent to sell, just have a well-informed customer-service call-center to guide parents with questions.

Branch out. Offer financing for late-comers. Think about offering housing near campuses, and giving incentives to your clients to rent from you. You can keep costs lower that way. Use advertising to get the name out there quickly, because there's going to be a lot of copy-cats. It's a good idea, I think.

How to change the world. Or at least, think about it.