The Payroll Tax Cut Expiration: "This hurts seriously!"

In the words of Brian Sozzi, chief equities analyst at NBG Productions, the end of the Social Security payroll tax holiday "hurts seriously." 

A few stories that have appeared online in the last couple of days echo that:

Reaction to Payroll Tax Cut Expiration

Payroll Tax Increase Set to Impact Workers

Fiscal Cliff averted: still you will pay more in taxes

Payroll tax increase has Americans asking #WhyIsMyPaycheckLessThisWeek

Since that last headline included a hash tag, I decided to pull it up on twitter to see what's there; it's pretty entertaining: #whyismypaychecklessthisweek. Here's a few choice selections:

"Still upset w/your lower paycheck? Try this: don’t think of it as a tax, think of it as a penalty. Better now?"

"Because you are one of the many millionaires and billionaires that are earning $50-$250k ;)"

"Because you are not on Food Stamps, SSDI, Section 8 Housing, Obamaphone, or in Prison you racist conservative."

"because you get your news from The View and voted for Obama. Trust me, you deserve less pay."

That last one wasn't one of my favorites, but I included it because of my own anecdotal "man on the street" moment this evening, which inspired this post:

While standing in line at the grocery store, I overheard the customer ahead of me lamenting her reduced paycheck. From what she said, I could tell that she was one of the people I consciously avoided becoming, someone who became accustomed to having that money available to spend. For her new-found financial distress, she blamed Obama.

As far as I know, that's not quite accurate - my reading on the matter points to the expiration of the tax holiday being due to neither side of the aisle showing much interest in extending it into a third year. However, mistaken as it may be to pin this particular matter on Obama, I think it's a good primer for people who may still be suffering from hope-nosis to begin getting angry with the man. It might make it easier for them to identify the source of a lot of reduced opportunities and higher costs that they'll be facing thanks to the policies he represents.

Urban Prospecting: I Struck Silver!

Somewhere recently I read someone's great idea about how you can acquire silver risk-free. It sounded like a bogus claim at first, and the promo video that went on and on and on (probably ending not in the promised advice, but with a paypal button to purchase an e-book) started to convince me that it was so. The seller, whoever he is, did give away the secret to anyone paying attention to detail, however: the sales pitch kept saying "say these five magic words to any teller at any bank and blahblahblah." I don't know what the words actually were because I stopped listening and started Googling. It didn't take me long to find out what the deal was (and why this e-book wouldn't have been a deal at all).

Very simply, what some are doing (and what I've since tried) is to walk into any bank with some cash and proceed to exchange it for as many rolls of U.S. half-dollar coins as you can.

There was a point in time where some of our coins contained precious metals, mostly silver. For a period of time, so too did half-dollar coins. Basically, any of them that were struck before 1971 have a significant amount of silver in them (for the specifics, use this handy resource, which will even tell you day-to-day what the "melt value" of a coin is).

What's nice about doing this is that if you don't turn up any pre-1971 half-dollars in the rolls you buy, you don't lose any money. You can spend them, deposit them back into your bank account, or even exchange them for other rolls of half-dollars and keep looking. If you do find a silver-containing coin, however, you make a nice gain. 

On my first crack at this, with $40 worth of half-dollar coins that I picked up at my main banking institution, I found this:

A 1967 half-dollar, probably from the Pennsylvania mint (this one does not bear a mint mark, and it is my understanding that coins from that particular mint often have no mark, while the other mints always stamped them with theirs). On the day that I found this coin, the spot price of silver placed the melt value of it at about $5.10. For fifty cents, I acquired something worth over nine-times that amount, without risking a single penny. It's tough to beat that!

My coin is now hanging out with the rest of my silver holdings in my safe deposit box. As the use of silver continues to outpace the production of it, I expect the metal to continue rising in value. My existing holdings I acquired for an average cost of about $14.28 per ounce, but with a method like this one for acquiring more, I wonder if I can nudge that number down further. 

Try it yourself! Do a little "urban prospecting," see if any nuggets end up in your pan. It could take several tries before you strike silver, but with close to 849,000,000 of these silver-containing half-dollar coins having been produced in the past, the chances of finding one are way better than buying a winning lotto ticket! (Not to mention that if you don't win at lotto, you don't get your money back!)

Bill Flax: Was Jesus A Socialist, Capitalist, Or Something Else?

Spotted this excellent Forbes.com article this morning: Was Jesus A Socialist, Capitalist, Or Something Else? It's packed with gems; the two that are my favorites are quoted below.

I'm not posting this to express any endorsement or rejection of any particular theological point-of-view, which is really the point of the article. When you hear people of either left or right political persuasions leaning on scripture to make their case, it's very likely that they have no clue what it is that they cite as support and they sound silly. To wit:

"Although capitalism appears compatible with Christ’s teachings the Bible never specifically endorses free enterprise. Neither are markets anywhere condemned, only the sinful actions of those abusing others. Markets offer freedom, which amplifies character. Without room for good or ill, morality is irrelevant."

One of the secular gems, and a very clear, concise explanation of why individualism is good and why collectivism is bad, without needing any sort of false "biblical" justification (the author's apparent bias in that regard is demonstrated here, though not in a way that detracts from the main point):

"Capitalism forces the greedy to produce thereby growing the overall pie. To gain they must provide what others willingly purchase. It’s ironic that while those relentlessly pursuing materialism search for contentment in error, the rest richly benefit by the impoverishing lifestyles they pursue.

Those most responsible for increasing wealth accumulate more, they should, but in so doing lift their community’s living standards. Even America’s poor live well by any material measure.

In socialism, greed shifts from productivity into consumption. Without property rights or opportunities for profit, men quickly descend into mutually destructive envy. Our base instincts betray us. Output plummets. When we see someone slacking and still taking – we produce less. When we see others hoarding – we snatch more too.

If nothing can be acquired, advantage is only feasible by consuming beyond one’s share of public goods. As Adam Smith said of slavery, “A person who can acquire no property can have no other interest but to eat as much and to labour as little as possible.”

One criticism of the article I have (though maybe I'm operating from a false premise here, not sure) is that on page three, Mr. Flax writes, "capitalism is the best platform man has yet devised." To my mind, capitalism isn't a system, it is just what is: in the absence of any sort of institutionalized market, people trade, always with the aim of making an exchange in which each party considers themselves to have gained. A system of rules and procedures is not a prerequisite to this, quite the opposite. What was devised? Nothing, that's just how things are.