i-sako.com

Given my debt situation and the fact that my wife and I will soon celebrate our fifth wedding anniversary, I found this article at Salon very timely.

For poorer and for poorer

For young couples trying to start a new life together, the dismal economy means more fighting, postponed weddings—and less sex.

…

For the young people who graduated from college and high school in the booming 1990s, the future seemed endless. A new economy was taking shape, jobs were plentiful, and terrorism was something that happened far, far away.

Now all that has changed.

Dismal Economy

Some might think it foolish, but my wife and I got married a week before I graduated from college. Neither of us had any money to speak of, and I had accumulated some fairly daunting debts. I did, however, have a decent-paying job lined up (teaching English in Japan, of course—talk about foolish!) and so we didn’t have to suffer too much. The months that passed between our wedding and when we started making money were difficult, but we seem to have survived.

At the time, though, I distinctly remembered thinking that I was a total idiot for staying in Japan during the Internet boom. It seemed like anyone who could even spell “Internet” was able to slap together a PowerPoint presentation about virtually anything and sell it to venture capitalists for lots of money. Meanwhile, I was pulling my hair out trying to think of ways to motivate bored teenagers to take an interest in a language that none of them cared about.

Then the bubble burst, and Internet ventures went belly up all over the place. (Many former dot-com employees actually started applying for the job I had—I was shocked!) At that point, I felt like a total genius. Not only had I managed to pay off most of a 20-year student loan in just a few years, but I had also managed to raise a family while doing it. Not bad for a young guy!

More Fighting

Like any couple, my wife and I fight sometimes. When I think about it now, most of our worst fights have usually been about money—although not directly. One example that comes to mind right away is our disagreements about vacations. My wife loves to travel, we both do, but I am often against the idea of taking a vacation because, having a lot of debt, I usually can’t afford it. On the other hand, I can sometimes be compulsive (and defensive!) about purchasing software, which I thrive on but my wife sees little or no value in. She’d rather have a vacation than a new application, no question about it.

Over the years, I have learned to restrain my software-purchasing habits and splurge on the occasional vacation (although my wife still pays for far more of our outings than I do). These things, combined with the fact that our economic situation has improved considerably over the past few years, have brought us to a point where we don’t fight quite as much as we used to; and when we do fight, it’s not as bad as it used to be.

Less Sex

With our second child due in November, I obviously can’t claim that there is no sex in our relationship. Still, I can’t say that earning more money has lead to an increase, either.

The biggest factor here, I think, is the constant presence of of our daughter rather than a lack of money. With her around all the time, it’s a wonder we were able to conceive another!

Children, Parents, and Prosperity

Although I have no doubt that it will be difficult to raise two kids on the money we make now, I’m glad we’ve decided to have kids earlier in life than many couples do. By the time our children start becoming independent, we will still be young enough to have a few decades of usefulness left before we retire.

This could be critically important, because current economic indicators suggest that both of our countries are not going to be able to provide for the retiring baby-boomers who are our parents. By having kids early in life, I think we will probably be able to avoid being “sandwiched” supporting the generation above us as well as the one below.

All of these things lead me to a very strongly felt conviction: Working for a living is no way to get ahead in life. If Bush’s tax cuts prove anything, it’s that the people who own things get all the breaks. The sooner I can move my family into that category, the better. I’m still working on paying off debts now, but that won’t last forever. (With some help from my wife, it might not last for the rest of this year!)

So, in response to Salon’s article, I have some advice for young couples who are thinking about getting hitched: Do it! The circumstances may not be ideal, but it could take a long time for things to get better. Take my word for it, struggling is not so bad if you have someone you love to share it with. I’m glad I do.

The International Herald Tribune - Expatriates weather threat to tax exclusion:

Americans working abroad breathed a collective sigh of relief last week as Congress jettisoned an item in the tax reduction bill that would have repealed the $80,000 expatriate earned-income exclusion. The provision, section 911 of the Internal Revenue Service code, allows U.S. taxpayers who are foreign residents to exclude up to $80,000 of money earned from services performed abroad from their gross income, and calculate their U.S. taxes only on the rest.

That’s great news for us Yankee-gaijin, but it seems we’re not safe yet…

Although the proposal died in committee, some observers believe it will eventually be enacted. “It is clear the Bush administration has targeted this provision,” said Samuel Okoshken, an attorney in Paris who specializes in taxation. “They don’t see it as a tax increase for expats, but the closing of a loophole,” he said.

Any way you slice it, the Bush administration’s tax-cut fixation is economic voodoo. How in the world can you expect to sell a tax cut to people that will actually increase the amount they will have to pay in taxes?

Oh, but this is not a tax increase, you say? This is simply about closing an unfair loophole that allows Americans abroad to avoid paying their fair share? Um, no, not really. One might just as easily say that it’s unfair of the United States to tax expatriates in the first place. No other nation does. Also, how is it that “double-taxation” (a phony excuse for a tax cut if there ever was one) is unfair when it applies to dividends, but perfectly legitimate when it applies to the incomes of Americans living abroad?

Paul Krugman’s recent column at The New York Times calls attention to what most thinking people have been noticing for some time: The self-declared “patriotic” Republican-controlled government is screwing us all behind our backs.

The fog of war has concealed some of the worst hypocrisy imaginable. Take, for example, the act of praising our troops in one resolution, then screwing them in the next:

Since the war began, members of the House of Representatives gave speech after speech praising our soldiers, and passed a resolution declaring their support for the troops. Then they voted to slash veterans’ benefits.

Yeah, the troops are our nation’s “finest citizens” the Republicans say, but we need those gigantic tax cuts, so we really can’t afford to provide any benefits for our nation’s finest. What hollow words echo through the halls of Congress these days!

The clever folks over at Daily Kos note that, while the federal government is busy trying to cut taxes, state and local governments are scrambling to make up for lost revenue. Logic tells us that tax cuts are not magic pixy dust; the money that is lost in one area will have to come from somewhere.

Krugman knows where the money will come from: Big cuts in social spending.

...[T]he list of cuts—in child nutrition, medical care for children, child-care assistance and support for foster care and adoption (leave no child behind!)—was clearly designed to suggest that the budget can be balanced on the backs of the poor, without any significant cuts in programs that benefit the middle class.



Aside from its mean-spiritedness, this suggestion is simply false: our deficits are too large, and our current spending on the poor too small, for even the most Scrooge-like of governments to offer additional tax cuts for the rich without raising taxes or cutting benefits for the middle class.

The fog of war also allows the Republicans to wrap themselves in the flag and pretend to be both the party of financial responsibility and the party of national security, when in fact neither seem to be true. Although the Republicans like to talk tough on matters of national security, they seem awfully reluctant to provide adequate funding for it. The truth of the matter is that Bush is leading his party—and our whole country with it—into a disaster. Unfortunately, it seems that the average American is too busy being patriotic to notice the problems looming on the horizon.

Why the American people cannot see this is beyond me. I have long maintained that Bush’s approval ratings (currently hovering around 71 percent, mainly because of his ”war boost”) have been about 60 percentage points too high for his entire presidency.

The only good thing about this whole mess, I suppose, is that no one can blame the Democrats for anything (well, holding up the Estrada nomination maybe, but that’s about all). With the Republicans in full control of the entire government, the blame for what is being done behind our backs is all theirs.

In closing, back to Krugman:

Someday the public will figure all this out. But it may be a very long wait.

Although I also have concerns about the Bush administration’s full-scale assault on civil liberties, its poor handling of the economy, and a variety of other issues too long to list, this article at The New York Times sums up quite nicely the reason I am in no hurry to return to the United States.

With the economy in such dismal shape, I’m not sure how long it would take to find a job if I went back, but even more alarming is the fact that, faced with these budgetary problems, the states are deciding to cut funding for important programs like education. This means that not only would it be financially difficult for me to return to the States, but it would be bad for my daughter’s future as well. 

Bush’s irresponsible handling of the budget is causing a lot of trouble for the states, which--unlike the federal government--cannot run huge deficits and simply wait for the economy to make up the difference in the long run. And because schoolchildren don’t generally have very good lobbyists, their interests are often neglected in tough economic times. The real moral outrage here is that the economy doesn’t have to be that bad, but Bush is making a colossal gamble on the idea that cutting taxes will stimulate growth. If you remember the economy of the Reagan administration, you might remember that this kind of “trickle-down” economics didn’t work very well. (Kevin Phillips, author of ”Wealth and Democracy: A Political History of the American Rich,” says Bush’s plan is even worse; he calls it ”mist-down economics.")

And we’ve seen that Bush is only interested in state governors to the extent that they can help him put pressure on Congress for tax cuts, so the situation is unlikely to improve any time soon. 

Of course, it is not only education that is being threatened by the Bush plan. What is going to happen to Social Security and related programs as the Baby Boomers retire? Under Bush’s plan, the only alternatives will be to raise taxes to an unacceptably high level or kill off these programs. Perhaps that is the real objective, after all. Why should taxpayers be forced to pay for things like Social Security or education? Why not just give that money back, at a few hundred dollars a year (for your average taxpayer, that is), to the people who earned it? 

Well, for one thing, to do so would cause incredible social problems across the nation. Are people really so cheap that they would rather have a couple hundred bucks than a functional education system? Whatever happened to the Bush who promised to “leave no child behind”? I’m beginning to get the impression that what he meant to say was something more along the lines of “leave all children behind (except those from wealthy families and those fortunate enough to benefit from my faith-based initiatives).”

I see this as one of the biggest issues facing America today. Although my daughter is still too young to understand the implications of Bush’s tax cut fever, I can see that it has bad implications for her future. 

With those things in mind, the Japanese public education system (which I usually disparage) doesn’t seem so bad. 

Are you saddled with student loans? I am, in the worst way. So when I came across this article at Kuro5hin.org (which is in turn taken from Ted Rall’s article at Yahoo), it really grabbed my attention. 

Actually, the whole reason I am where I am in life right now is because of my student debt. I went to a modest state school, where I was enrolled in a somewhat prestigious journalism program. I thought I was doing the right thing financially--I even took a year off after high school to save as much money as possible and always held a job of some sort to pay as much of my expenses as I could while in school; and I had a few scholarships to help pay part of my tuition--but I ended up leaving school with about $45,000 of combined debt (student loans, mostly, but some credit debt as well).

Naturally, as a journalism major, I knew that I would not be pulling down a six-figure salary right away, but I was more than a little bit shocked to discover that most entry-level journalism jobs start with an unpaid intership, which some employers expect to last for at least six months! I don’t know about the rest of my j-school classmates, but when I left school I was in no position to move to places like New York or Chicago and work for several months with no pay. That, in a nutshell, is the reason I decided not to be a journalist: I couldn’t afford it!

Fortunately, I had a back-up plan. I was also an International Studies major, so when the chance to work in Japan came along, I took it. It turned out to be a job that I really despised (teaching English in public schools), but it paid well and I had a net worth that was in the -$50K range, so I couldn’t easily quit. I eventually managed to move into a job that suits me much better (technical writing), but I would still rather be doing something less restrictive than working in a Japanese corporation (where my skills go largely unrecognized and my prospects for advancement are non-existent).

So, here I am, nearly five years later, still in debt (though not nearly as much--there are only four negative figures in my net worth these days, not five) and unable to do much of anything interesting career-wise for the foreseeable future. My debt forces me to do work that pays well, whether I like it or not. At this point, I couldn’t switch to a lower-paying journalism job even if I wanted to. 

The real clincher, the point that really drives home what a sucker I am, though, is the fact that one of my good friends from high school decided not to go to college (which I thought was ridiculous, because he was a brilliant guy with plenty of academic potential). Instead, he used his credit card to buy a couple of computers…

When I went back to the States a few months ago, I paid this friend a visit. He now has a high-paying job working in a computer-related field, a gorgeous new house, two cars, a wife, two kids, and eight networked computers in his home office. Color me jealous! 

And I thought going to college would pay off in the long run. Well, I guess it’s paying off for someone (my creditors), but I have yet to see the financial rewards. I’ll let you know if my outlook improves in about three years or so, after I make my final loan payment.