Internet provider options (landline options, cellular, cable & satellite and relative costs)

Internet provider options (landline options, cellular, cable & satellite and relative costs) Typical minimal speed Land Line Internet (3 MPS) runs in the $35 – $40 per month range. We have already discussed the costs for cellular data, which also includes phone & text. Most new cell phones also include a mobile hotspot which functions in the same way as a Wi-Fi unit. Some companies will charge an extra $5 – $10 per month to activate it, but it can be a good deal if you want to completely stay away from land line use. There are also android apps that allow you to bypass the monthly charge for a onetime fee (usually only a small fee.) If you plan to go this route for all of your Internet use you will want to use the type of service plan that allows for unlimited highest speed access. One other less publicized method of by passing the “hot spot” charge is to use the Bluetooth functions on your smart phone and laptop to “pair” the devices.

–         Broadband speeds, how much do you need? If you are a casual user I would recommend staying with the low-end service (3-5 MPS). This actually works ok for most streaming (Netflix, Premium, Hulu, etc.). My recommendation is to always start with the basic service as you can always upgrade later if you feel the need.

End 12/01

Keynes vs. Friedman

Keynes vs. Friedman

John Maynard Keynes, who died in 1946, and Milton Friedman, who died in 2006, were the most influential economists of the 20th century. As a side note Keynes was 6’ 7” & Friedman was 5’ 0” (not that their physical stature has any bearing on the validity of their theories)

Please understand that I most likely will oversimplify the theories of these genius economists. The only “C” I made in Graduate School was in macroeconomics so this area is a definite weakness for me. However, the point I hope to make will not depend entirely on my understanding.

Keynes theory was in part based on the government’s role in facilitating the country’s recovery from the Great Depression. The WPA, PWA and eight other work programs of the 30’s combined with the war effort of the early 40’s resulted in near full employment and an economic boon that fueled the post war era and established the USA as the dominant economic super power of that era. Obviously, his theory is the basis of the current Democratic Party’s economic thinking. Deficit spending can be an effective method of stimulating the economy.

What many folks tend to forget is that Keynes was a proponent of running government surpluses during good economic times. He also warned that exceeding a 75% debt to GDP ratio should be avoided and doing this would be a sign of future economic disaster. The current ratio stands at 105.53% and it is growing! Keynes would be appalled.  Can you imagine what Friedman would say?

Friedman has been the darling of Republicans. He has opposed government deficits and his theory was that the best economy would be achieved in a free market system without government inference. Only monetary policy adjustments should be used to stimulate or retard growth.

Based on these competing theories I would have assumed that the Democrats would have been primarily responsible for the debt epidemic, but it turns out I was wrong. Actually, both parties have been co-conspirators. If you would like to see the details on this I would refer you to a prior posting on this subject titled: Two party System – Summary of budget results for the Parties which was posted on 2/13/2016.

I suggest we evaluate our elected officials by what they do and not what they say. The massive build up in our debt is evidenced by the following 50-year record:

Fiscal Year  Deficit   (in billions) Debt Increase (by FY)  Deficit /GDP Events Affecting Deficit  
1970 $3 $17   0.3% Recession.
1971 $23 $27   2.0% Wage price controls.
1972 $23 $29   1.8% Stagflation.
1973 $15 $31   1.0% End of gold standard.
1974 $6 $17   0.4% Budget process created.
1975 $53 $58   3.1% First Ford budget.
1976 $74 $87   3.9% Stagflation.
1977 $54 $78   2.5% Stagflation.
1978 $59 $73   2.5% First Carter budget.
1979 $41 $55   1.5% Volcker raised rates to 20%.
1980 $74 $81   2.6% Recession. Iran oil embargo.
1981 $79 $90   2.4% Reagan tax cut.
1982 $128 $144   3.8% Reagan’s 1st budget.
1983 $208 $235   5.6% Jobless rate 10.8%.
1984 $185 $195   4.5% Increased defense spending.
1985 $212 $256   4.8%
1986 $221 $297   4.8% Tax cut.
1987 $150 $225   3.1% Market crash
1988 $155 $252   2.9% Fed raised rates.
1989 $153 $255   2.7% S&L Crisis.
1990 $221 $376   3.7% Desert Storm.
1991 $269 $432   4.3% Recession.
1992 $290 $399   4.4%  
1993 $255 $347   3.7% Clinton signed Balanced Budget Act.
1994 $203 $281   2.8% First Clinton budget.
1995 $164 $281   2.1%  
1996 $107 $251   1.3% Welfare reform.
1997 $22 $188   0.3%  
1998 ($69) $113  (0.8%) LTCM crisis.
1999 ($126) $130  (1.3%) Glass-Steagall repealed.
2000 ($236) $18  (2.3%) Surplus.
2001 ($128) $133  (1.2%) 9/11 attacks. EGTRRA.
2002 $158 $421   1.4% War on Terror.
2003 $378 $555   3.3% JGTRRA.
2004 $413 $596   3.4%  
2005 $318 $554   2.4% Katrina. Bankruptcy Act.
2006 $248 $574   1.8% Bernanke chairs Fed.
2007 $161 $501   1.1% Iraq War cost.
2008 $459 $1,017   3.1% Bank bailout. QE.
2009 $1,413 $1,632   9.8% Stimulus Act.
2010 $1,294 $1,905   8.6% Obama tax cutsACA.
2011 $1,300 $1,229   8.3% Debt crisis.
2012 $1,087 $1,276   6.7% Fiscal cliff.
2013 $679 $672   4.0% Sequester. Government shutdown
2014 $485 $1,086   2.7% Debt ceiling.
2015 $438 $327   2.4% Defense = $736.4 b.
2016 $585 $1,423   3.1% Defense = $767.3 b.
2017 $665 $672   3.4% Defense = $812.3 b.
2018 (est) $833 $1,271   4.0% Defense = $824.7 b Trump tax cut.
2019 (est) $984 $1,187   NA  Trump tax cut
2020 (est) $987 $1,198   NA Trump tax cut

Note that the estimated deficit for 2018 that was published many months ago had already been exceeded with 35 days to go in the year. At a rate of over $2 billion a day the actual 2018 deficit will exceed $900 Billion and the national debt will increase by over $1.3 trillion, approaching $22 trillion by years end.

Communication/Education (con’t)

Communication/Education (con’t)                                                                                                                    –         I-phones compared to Androids. I am a big fan of Apple and all of their products. They make a great product. I am especially envious of their marketing savvy. They have been able to command a large percentage of the market with products that command a huge gross margin for their company. I am much too thrifty to actually use their products. There are many good products that use the Android operating system at a fraction of the cost of an I-phone or high-end Samsung. The phone I use is a low-end LG Leon. It has about 98% of the functionality of the I-phone 6 and my cost was less than $25 per month. In my research I am also finding that there are more “free” apps available for Androids since Apple controls all of the software for the I-phone. I have yet to pay for an app. There are numerous great android smart phones available for under $50. One provider periodically offers a buy one get one free on my phone for $29. Often that same provider offers a “free” phone.  

–         2G, 3G, 4G & 4G LTE (for smart phones): These are “generations” of cell phone signals and relate to signal speed with 2G being the slowest (similar to dial up Internet speeds), 3 G similar to lower speed broadband (about 3 MPS), 4 G (up to 10 MPS) & 4G LTE (1 ½ – 2x the speed of 4G).

–         Shopping for a service provider, read the fine print (costs can range from $7 to $80 per month) If you are only interested in talk and text then I would stay away from a smart phone program & go with a basic cell phone. Assuming you intend to take advantage of the “smart” phone functionality be certain to know what you are getting before making a decision. Verizon tends to have the best overall coverage & AT&T is a close second. T-Mobile and Sprint also have very good coverage, but may (or may not) market to your area. All of these firms provide coverage maps at their websites. Some providers buy service from one or more of these companies at wholesale & “resell” the service. Examples are Wal*mart which contracts with Verizon & AT&T (depends on which phone you are using) & Metro PCS which uses the T-Mobile service & is owned by T-Mobile). Unlimited service (for talk, text & data) can be purchased in the $25 – $30 per month range. These lower end unlimited systems will restrict the amount of 4G or 4G LTE data (usually 1 gig a month) and then the speed is reduced to 2 or 3G). If you do not do a lot of streaming these programs work very well and they give you the option of purchasing additional high-speed access should you exceed your allotment. Unlimited high-speed service can be had for $50 $60 per month up to as much as $100! If you have heavy streaming activity this may be an option?

Beware of “free” offers, they are not always free. Several providers advertise a “free” phone. In some cases, it can be the latest I-phone or high-end Samsung. I would caution you to do the math before deciding. Typically, these programs require a two-year contract in the $80 per month range. When you compare this to a $50 per month program you are actually paying $30 x 24 or $720 for the phone. The value of these phones depreciates at about 30 – 35% per year so at the end of the contract you have paid $720 for a phone worth less than $300. “Free” is hardly ever free.