There Will Always Be Some Excuse Not To Prepare For The Future

Somewhere along the line, our students have been taught that because of climate change, the world is going to end before they reach a ripe old age. Somehow the idea that the earth’s climate goes through cycles is not mentioned. Also not mentioned is the fact that in the past the earth’s climate has changed drastically, and we are still here. Remember, they have found plant fossils deep under the ice in Greenland. Aside from the destruction of the scientific method, what our children are being taught also has real-world consequences.

Marketwatch posted an article yesterday with the following headline, “Young people blame climate change for their small 401(k) balances.”

The article reports:

Lori Rodriguez, a 27-year-old communications professional in New York City, is not saving for retirement, and it isn’t necessarily because she can’t afford to — it’s because she doesn’t expect it to matter.

Like many people her age, Rodriguez believes climate change will have catastrophic effects on our planet. Some 88% of millennials — a higher percentage than any other age group — accept that climate change is happening, and 69% say it will impact them in their lifetimes. Engulfed in a constant barrage of depressing news stories, many young people are skeptical about saving for an uncertain future.

“I want to hope for the best and plan for a future that is stable and secure, but, when I look at current events and at the world we are predicting, I do not see how things could not be chaotic in 50 years,” Rodriguez says. “The weather systems are already off, and I don’t think it’s hyperbolic to be a little apocalyptic.”

It’s a fairly safe bet that Social Security will not exist by the time she is old enough to retire, so if the world chooses not to end before then, she will be up a creek without a paddle.

The article lists other consequences of what our children are taught regarding climate change:

Mental-health issues affecting young adults and adolescents in the U.S. have increased significantly in the past decade, a study published in March in the Journal of Abnormal Psychology found. The number of individuals between the ages of 18 and 25 reporting symptoms of major depression increased 52% from 2005 to 2017, while older adults did not experience any increase in psychological stress at this time, and some age groups even saw decreases. Study author Jean Twenge says this may be attributed to the increased use of digital media, which has changed modes of interaction enough to impact social lives and communication. Millennials are also said to suffer from “eco-anxiety,” according to a 2018 report from the American Psychological Association, with 72% saying their emotional well-being is affected by the inevitability of climate change, compared with just 57% of people over the age of 45.

The article concludes:

Similarly, Rodriguez said that, even without the threat of climate change, she likely couldn’t afford to save for retirement — and might not need to. Because she comes from a Latina family, she says culturally it is expected she would move in with family in old age and not have to pay as much in retirement costs.

“Both of my parents are immigrants. I did not grow up in a culture of professionalism. I graduated with thousands in student loans — I have never made enough money to save for the future,” she says.

Although she does not save money for retirement, Rodriguez does take action for the future: she’s taught herself to garden (“in case of a total collapse of the food system,” she says) and invests in learning hands-on skills like mechanics and bike repair.

“It’s kind of my own version of retirement,” she says.

Erin Lowry, author of “Broke Millennial Takes On Investing,” recommends preparing for retirement no matter what you believe will happen, referencing the Y2K phenomenon, when some people sold their belongings and made other rash choices in the belief that the world would end with the dawn of the year 2000.

“Even if you have a defeatist mind-set about the future of the planet, it’s better to prepare as though you, and the planet, will survive into your retirement years because the alternative is also bleak,” she said. “Failing to properly plan for a future means guaranteeing yourself a more difficult life.”

The baby boomers survived hiding under their desks in case of nuclear attack and the Vietnam war. We grew up to be tough old birds (with a few exceptions). I don’t think the problem here is the teaching on climate change–I think the problem is raising children without the moral foundation our country was built on. I also think parents need to let their children fail occasionally. Everyone shouldn’t get a trophy.

Failing To Save Money

New Bern, North Carolina, is a beautiful city (rebuilding after Hurricane Florence). Obviously, rebuilding is costing a lot. The City Alderman are doing a good job of trying to repair the damage done by the hurricane, but it is costing a lot. In addition to the cost of the hurricane, New Bern is now faced with the cost of a U.S. House District 3 primary election, possible run-off election, and off-year election to replace Congressman Walter Jones. That has brought up the issue of the cost of elections–they are expensive.

In the March 21-27 issue of The County Compass (I could not find the letter on the website, I actually have the paper. This is a link to the website.), New Bern Alderman Jeff Odham explained a way that the City of New Bern could save money on elections and increase voter turnout in municipal elections. New Bern normally holds its municipal elections in October every four years (2013, 2017, 2021, etc.). Alderman Odham proposed holding municipal elections in March during federal election primary elections. This change would decrease the cost of municipal elections from roughly $36,000 (if there is no runoff) or $55,000 (if there is a runoff) to less than $5,000. What a fantastic idea. If the elections are held during the primary, the runoff can be held during the general election in November, again at a cost of less than $5,000. This resolution would have to be approved by the Board of Aldermen and sent to Raleigh so that the legislature could modify the charter of the City of New Bern.

Last night the Board of Aldermen rejected the resolution. Among other things, the proposal would result in the current Board of Aldermen serving a three-year term instead of a four-year term. A number of the Aldermen objected to that. They were willing to cost the taxpayers thousands of dollars in order to serve for one more year. The Aldermen that voted against the proposal were Aldermen Best, Aster, Harris and Bengel.

Mayor Dana Outlaw, Alderman Kinsey and Alderman Odham voted for the proposal. It is unfortunate that the other Aldermen were not interested in a savings of at least $30,000 every four years. I will not be voting for my current Alderman (who voted against the resolution) in the next election.

An Explanation I Can Understand

IJReview has posted this in the past, but I thought it was worth sharing again.

Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this…

The first four men (the poorest) would pay nothing The fifth would pay $1 The sixth would pay $3 The seventh would pay $7 The eighth would pay $12 The ninth would pay $18 The tenth man (the richest) would pay $59

So, that’s what they decided to do.

The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve ball. “Since you are all such good customers,” he said, “I’m going to reduce the cost of your daily beer by $20″. Drinks for the ten men would now cost just $80.

The group still wanted to pay their bill the way we pay our taxes. So the first four men were unaffected. They would still drink for free. But what about the other six men ? How could they divide the $20 windfall so that everyone would get his fair share?

They realized that $20 divided by six is $3.33. But if they subtracted that from everybody’s share, then the fifth man and the sixth man would each end up being paid to drink his beer.

So, the bar owner suggested that it would be fair to reduce each man’s bill by a higher percentage the poorer he was, to follow the principle of the tax system they had been using, and he proceeded to work out the amounts he suggested that each should now pay.

And so the fifth man, like the first four, now paid nothing (100% saving). The sixth now paid $2 instead of $3 (33% saving). The seventh now paid $5 instead of $7 (28% saving). The eighth now paid $9 instead of $12 (25% saving). The ninth now paid $14 instead of $18 (22% saving). The tenth now paid $49 instead of $59 (16% saving).

Each of the six was better off than before. And the first four continued to drink for free. But, once outside the bar, the men began to compare their savings.

“I only got a dollar out of the $20 saving,” declared the sixth man. He pointed to the tenth man,”but he got $10!”

“Yeah, that’s right,” exclaimed the fifth man. “I only saved a dollar too. It’s unfair that he got ten times more benefit than me!” “That’s true!” shouted the seventh man. “Why should he get $10 back, when I got only $2? The wealthy get all the breaks!”

“Wait a minute,” yelled the first four men in unison, “we didn’t get anything at all. This new tax system exploits the poor!”

The nine men surrounded the tenth and beat him up.

The next night the tenth man didn’t show up for drinks so the nine sat down and had their beers without him. But when it came time to pay the bill, they discovered something important. They didn’t have enough money between all of them for even half of the bill!

And that, boys and girls, journalists and government ministers, is how our tax system works. The people who already pay the highest taxes will naturally get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas, where the atmosphere is somewhat friendlier.

David R. Kamerschen, Ph.D.  –   Professor of Economics.

The same general principle is explained in the Laffer Curve.

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