Galt And Reality

Like the extreme prep stuff, the idea of going Galt is one of those seductive ideas that a lot of libertarian-conservatives go for and which I can never embrace fully.

Part of it with the prep stuff is the vague discomfort of having seen this before in the seventies, when it turned out not to be needed.  Now, I realize things are much different and in many ways far more serious, and I’ll agree that there’s a much higher chance the sh*t hits the fan this time.  However, the body learns, the animal learns, and making it unlearn it is very difficult.  When the animal is sure that “it will turn out just like last time”… well… I’m fighting it.

And yet, I realize I sound as a friend said yesterday, like someone she talked to who said that “It’s not going to happen.  The country always is all right.  It’s always been.”

So I’m not stupid, and I’m doing the prep stuff I can afford to do.  This is limited, of course, because we’re not wealthy and well, we have real world NOW obligations.

Which brings us to going Galt.

Going Galt is a very seductive idea, of course, as is any resistance to force and theft.  But it is an idea only suited to certain people at certain times in life.   Perhaps the most obvious example of “going Galt” (written by a liberal) is the Rex Stout novels.  When Nero Wolfe hits the point at which his earnings will no longer accrue to him, he stops working.

He’s in the perfect circumstances to go Galt: he is self employed, that I know has no mortgage due, and of course, has no dependent children.  Also he makes enough that cessation of work doesn’t mean starvation or penury.

We… not so much.  Oh, sure, some years, when I see my money creep up to where, on top of Dan’s salary and with social security double contribution, I end up keeping less than a third, I call my editor (or in other days the agent) and say “Can you delay that check a couple of months?”  Something they’re never averse to doing.  Mind you, not near it this year but that – sigh – is something else again.

Most of the time I have to work as much as I can, because kids have tuition, and house needs repairs, and well… it is what it is.

As for the idea of buying a bug-out shelter, a place to go to and live off the grid, we might have managed it ten years ago, but now it is a pipe dream and likely to remain so, unless my current books hit really big.

And yet – as I described before – one wants to do something.  One wants to feel one is engaged in small acts of rebellion, something to both keep the spirit alive and make us feel like we’re preparing, to an extent, should the unthinkable happen and everything break down.

Well, partly out of necessity (have ya’ll seen the prices in the stores?) I’ve come up with a mini-galt strategy.

1 – spend as little as you can.  This doesn’t mean cutting out ALL discretionary spending.  Heinlein said one should always budget luxuries first, and to an extent he was right.  When we were really broke we used to still try to buy a book or go watch one of the (dollar, back then – second run) movies, just out of giving yourself a break now and then.

But

a)      we’ve cut out most eating out.  We still go to Pete’s when we visit Denver, though, because it cheers us up.

b)      I’m doing strategic shopping.  Buying whatever is on sale, chopping up, freezing.  This is a lot of work, but as expensive as meat is, it’s also worth it.  If you don’t have a deep freezer, consider one.  You probably can get a used one, cheap.

c)       Entertainment is going to be of two kinds.  First, we have Amazon Prime, which I honestly wish we’d had when we were young and stone cold broke.  It’s cheaper than cable, and we get free streaming videos.  You also get a ton of free books every week, some of them traditionally published.  (Though I just discovered an indie mystery series that way.  That is I loved the first which was free a few months ago, and I’ve just bought the second – just out – for 3.99.  If it holds up, I’ll blog on it.)  But even if I buy those books, they are relatively cheap and don’t add to the clutter.

d)      Second, if you can buy memberships (to museums, to zoos, etc.) that are tax deductible, you’re both buying entertainment for a year and reducing your tax bite.  Double plus.  (Of course, most of those institutions are leftist, though I’ll note Wings Over The Rockies, in Denver, isn’t.) (We might yet cultivate a taste for long walks in scenic surroundings… though not till spring.)

e)      On money making, as I said there isn’t much I can do, though I MIGHT shift some of it to the next years, should we come to a point when “I’ve made enough money.”  Or I might write for the drawer for a while – but this is REALLY hard for me, because writing is communication, and one writes to be read.  At any rate, for us, other than the wonderful AMT coming at us with both barrels in January, making too much money is not something we can even figure out yet.  Even with the AMT – adjusted for family, I assume?  I really don’t know – if adjusted for family, we’re still well under.

 

I will, of course, if opportunity offers, exchange services with friends.  No, not short story writing, kids.  I mean, if you guys want a story written for you and want to do something for me in return, I’ll entertain the offer, of course.  Some adults, for reasons known only to themselves like stories written about them (don’t get me wrong, redshirting and its milder twin tuckerizing are tons of fun, both to give and to receive.  I meant more, though, writing an entire story around them/their situation.  I’ve heard of writers writing short stories so a guy can propose to his girlfriend with it, for instance.  For hire, of course.)  And you know, other than hard core erotica, I could probably do that.  But this being a story, it’s all “copyright weird” and all.  I mean, the other stuff I can do: paint walls, refinish furniture, and yeah, draw people.  It might take me three runs up to it, but I’m not a terrible portrait artist.  And I’d totally trade for stuff like proofreading or other stuff I need.  This type of exchange is of course unofficial and hors-de-taxes.  (It occurs to me a listing for exchanges of services might not be a bad idea.  It would work well with an idea I’ve been mulling for some time, with getting an indie-exchange going.  “I scratch your manuscript/cover, you scratch mine” sort of thing for those of us (most of us?) in strapped circumstances.)

We’re calling this mini-galt, though it could as easily be called “Galt on the discount plan.”  I’m sure it’s not the last word in Galting it, and that some of you have more ingenious ideas.  This one just applies to our situation.  Does it apply to anyone else?  I don’t know.  And what else have any of you come up with – always staying on the sunny side of the law, of course.

74 responses to “Galt And Reality

  1. We’re finding that an effective way to go mini-galt is to shop garage sales, thrift stores and second-hand, especially for things like clothes – especially outer garments, shoes and accessories. There are some incredibly good buys to be had – like the Pendleton woollen blazer that I bought for … $1.50. It was unworn, and it was marked down because it was the middle of summer. My daughter found a vintage Dooney & Burke handbag at a garage sale for $5.00, and I got a practically unused Zojirushi bread machine for the same. (Both of these items originally sold for $250.) Another benefit of buying vintage is that many items were made in the USA, and are of much better quality than the cheap s**t from China available today.

    • Oh, yes. Thanks for reminding me. After the troglodytes are up, I’m taking each of them out to the thrift store separately, so they can tell me what the other wants for xmas from what’s on offer. (Games. I don’t play.)

      • Jean buys a lot from the thrift stores, and also from the dollar stores. The best cleaning products made are sold through the dollar stores. She really likes to shop on the days the local stores offer extra discounts for seniors or military.

      • Another area to look at: Freecycle.org and Craigslist. Often lots of decent stuff on either, free or cheap.

        I will second the comment on Dollar Stores, and also the Big Lots chain, if you have one nearby. We even buy paper products there: paper towels and TP are cheap there, as well. . .

        You don’t have to be poor to be frugal. . . just wise. . . .

        • We used to shop at big lots, but our local one is… a little odd. Shall try dollar stores cleaners.

          I use craigslist free (and cheap) extensively. And if we get absolutely pinched I CAN refinish stuff and resell. I’ve not been doing it, because a) no working space in this house. Would have to rig something. b) no time because of writing. BUT there is a reason I write refinishing mysteries.

          • I will have to start looking at dollar stores too. I don’t usually look at clothing there because it falls apart to fast. I found that JC Penney or one of those stores has clothes that last for a long time–which in the long run makes it cheaper. Plus I now use a combination hydrogen peroxide/baking soda as a spot cleaner for my wash (recipe– 1/4 cup hydrogen peroxide, 1/4 cup washing powder (or baking soda)/1 cup of hot water– mix it then put it in a batch of clothes– it is really really really good for whites and takes out a lot of stains except motor grease. It lightens spaghetti sauce stains too).

            Baking soda is good as a toothpaste and a really good cleaner.

            • Do you know anything that does a good job of taking motor grease out of whites?

              The good cleaner from the dollar store comes in an eye-searing purple bottle and is called something like Kaboom. (this is for cleaning bathrooms, sinks, etc. I have no idea what it would do to clothes)

              • Whatever happened to good old Goop for axle or any other kind of grease? I have used Kaboom, it’s just another one of those grease and dirt getters. For strong grease, even grills I use Greased Lightning from the dollar store, Dollar General I think. I would try Goop, then use Greased Lightning or just liquid washer detergent from the bottle applied directly on the stain. It MIGHT work. Dish detergent directly on the ring gets “ring around the collar,” too

                • Goop and GoJo and other brands of mechanic’s hand cleaner – parts stores or WalMart what have you work well on grease – I suspect the magic ingredient is mineral spirits but I don’t know. For whites only there is pre -dye prep from Rit and other household clothing dye vendors intended to strip cloth to white. Grease has changed from being almost exclusively petroleum and bacon grease to including a number of synthetics and semi-synthetics themselves with assorted artificial colorings.

                • Goof Off. It also removes paint splatters from carpet.

              • I have a problem with deep grease (motor grease and so forth) so when the hubby ruins a T-shirt with it, I tell him to make it into a rag and use it instead of his clothes– *sigh doesn’t work, but he doesn’t get into the grease too often.

                • What Jean buys is called “Awesome”, is yellow, and comes in a clear plastic bottle. There are spray bottles and refill bottles, but the same basic ingredient. It gets pasta stains out of Timmy’s school clothes. I’ve used it on grease stains (cooking grease, not motor oil/grease), and it works sometimes, doesn’t sometimes, may work the second wash. We use Awesome Grill & Oven cleaner both on the grill and on any other greasy surface, including windows. It doesn’t streak.

          • Wayne Blackburn

            When I lived in Columbus, the store’s name was Odd Lots instead of Big Lots. Maybe they chose the wrong name? :-)

    • Some might argue that this denies producers their fair share. For example, when you buy a book second-hand the publisher (and author [insert Nelson Muntz “Hah-ha”]) are denied their fair compensation for the book.

      Alternatively, the ability to resell a book and thus recoup some portion of your investment therein may well be a significant inducement to purchase that book in the first place, thus increasing sales. Especially if the $ received from resale of the books is invested in new books.

      Used books also offer potential consumers a low-cost opportunity to try an author whom they might otherwise have eschewed, and thus increases the market for the author’s books. I might be dubious about Jim Butcher’s books but, having paid 2nd hand price for a Dresden Files book decide I am willing to buy them from my book dealer at full price.

      For certain luxury items, such as designer formal-ware (and, I s’pose, prom dresses) the secondary market probably serves as a major incentive for the original purchaser. Even if only donated to charity, such clothing can earn a hefty tax benefit for those whose incomes make that a consideration.

    • I get all my business suits and 90% of my “dress clothes” used from fleaBay, in part because I like the stuff from Germany and Austria that you don’t find over here, except at “ow, yowch, eep, whimper, whimper” prices. After all, it is a big international electronic garage sale.

  2. Galt Light

  3. I suppose if enough people go Galt or mini-Galt then your prediction of collapse is more likely to come true. Sort of a self-fulfilling prophecy.

    Note that I’m not currently planning on expanding my business and I’m considering cutting back hours and possibly retiring earlier (though still not for years), so I suppose I’m almost guilty of the mini-Galt thing too.

    • Dorothy Grant

      Bret – why do you say that it would cause a collapse? If people aren’t spending money on what they don’t need (other than a few luxuries), the money doesn’t disappear – it either gets redirected into what they needed but could not previously afford (fixing the plumbing, new set of tires for the car, etc), what will help them get save more money over time (paying down debt faster, putting more insulation in the attic to save on heating/cooling bills), or it is saved. People without crushing debt and with savings have a cushion that makes the personal difference between “rough spot” and “complete collapse”. Enough of that, and I think recession, yes. Collapse, no.

    • You mistake the symptom for the disease. People only go Galt (fully or partially) when they no longer believe the rewards for their effort sufficient to justify their effort. That only happens when a society is already in collapse.

      Besides, recent studies indicate that many of the least productive members of society are already gone Galt, preferring to live on redistributed benefits rather than their own efforts, mining the government (which is to say: the taxes paid by the productive.) A recently published analysius reported that a 27-year old single mother could, thanks to EITC, WTC and other benefits enjoy the same after-tax lifestyle as somebody earning $60K a year. (There are obvious flaws to this analysis, but probably not so obvious to that 27-yr-old single mom.)

      A quick [SEARCHENGINE] check for the ratio of taxpayers to tax consumers found a 2011 article in Forbes reporting that in California “For every 100 people employed in the private sector it has 113 people drawing benefits.”

      • Is it really “going Galt” to quit and be on the government dole? Maybe I’ve forgotten something.

        • No, going Galt is when a maker, refuses to work harder to support the takers using her own work against her. That was Rand’s point–they can’t take your freedom and your stuff without your help. They need you to make it, first.

          A maker going on the dole, OTOH, is sort of a conservative Cloward-Pivenist.

          Makers have every advantage. The takers depend on them making extra, to steal. But, makers don’t have to make extra. They can make “just enough.” There you go Barack–tax that.

        • Wayne Blackburn

          That’s kind of a tricky question. The effect is the same, though the reason is different. I would say that it doesn’t fit the implied meaning behind the phrase, but it actually works kind of twice as much damage to the government money stream.

        • When Rand wrote the book, it would’ve been extremely difficult for an able bodied male such as Galt to go on the dole. Nonetheless, it seems pretty clear to me that she would NOT have had Galt be on the dole. Galt says (numerous times) “I swear by my life and my love of it that I will never live for the sake of another man, nor ask another man to live for mine.” I think that being on the dole would violate the 2nd clause.

      • Maybe the light bulb has gone on in my head a little bit.

        Consider a couple of hypothetical cases. In the first case, we have a perfect government. Low spending, light regulation, good property rights, justice via rule of law, etc. Yet for some reason, one day a large percentage of the people go from being fully engaged in economic activities to going Galt or mini-Galt. Such a society would still experience an immediate severe contraction and lead to a collapse.

        I the second hypothetical case, we have a government that’s fairly corrupt, squanders substantial resources, regulates heavily, and in general has policies that aren’t particularly conducive to economic growth. Yet, let’s say that nonetheless, nearly everybody continues to stay engaged in economic activities as best they can. In this case, if the government is bad enough, collapse may still be in the cards but it may take a long time for that collapse to come.

        Previously, I haven’t been able to understand why many of you see imminent collapse because I was assuming the second case. Yeah, the government kinda sucks, but nothing about the government is really all that different than it was two years ago. Same president, same senate majority leader, same speaker of the house, same congressional majorities, similar regulatory burden, similar spending, etc. We didn’t collapse in the last two years so I didn’t see why we would suddenly collapse now.

        But if substantial numbers of people go Galt or mini-Galt for whatever reason, regardless of how good or bad the government is, then yes, that may cause a collapse or at least a severe economic contraction.

        It’s believable to me that people may pull back. Collapse may happen, not necessarily directly because of the government and its policies, but rather to spite it.

        • I see the collapse as more imminent, perhaps I could explain my reason by calling it the compound interest of the past few years or more like a snowball rolling down a hill. Bigger, bigger, bigger BIGGER!

          • Historically government efforts to “manage” the economy appear to have mostly succeeded in maintaining small problems long enough for them to fester and become great problems. Your “compound interest” comment is part of the reason for that, just as is the way in which a tendency, left uncorrected, can become a habit can become a trait. By delaying corrections we magnify the problem.

            The easiest, least expensive time to stop a bully is when the behaviour is first manifested. Sadly, we now live in a society where too many will challenge and debate necessary correctives.

        • Wayne Blackburn

          There are significant differences from two years ago.

          First, many companies were holding their breaths until after the election to see what was going to happen. They have now seen that they have minimum four more years of sharply escalating taxes and regulation. The regulation burden has been building for decades, but it has nearly reached the point that no small businesses can make any money if they comply with them. Obamacare is starting to be implemented, especially the taxes and regulations. You’ve probably heard the news stories of companies cutting hours for many of their employees so that they don’t get hit by some of these. This makes the outlook for individuals much worse.

          Second, now that the President doesn’t have to be worried about getting re-elected, he’s got nothing holding him back for pushing for the most egregious of new policies, and he has already shown that he is willing to circumvent the Congress to get his way.

          Third, since we didn’t get a serious move to a less Leftist government, debt is going to continue to spiral upward, at a horrendous rate, and if the interest rates start going up for the money we’re borrowing, it may very well take us beyond the point where we can pay even the interest before this President is gone.

          Individuals will see every day living become harder and harder, so that’s why they are going to go Galt or Mini-Galt, and while that will indeed hasten the collapse somewhat, it’s not going to make that much difference, because those that do go Galt will at least not be going on the dole.

          • Actually, there ARE restraints on Emperor Bath-house’s future actions. Even HE is starting to run out of Other People’s Money to spend. . . .

            • So he runs the printing press. And makes payments inflation adjusted so that only the workers and savers suffer from living in Weimar Germany and/or Zimbabwe.

        • This pancreatic cancer didn’t kill me last month, I don’t see why it will kill me next month.

        • The fundamental problem is not the president, the senate majority leader, the speaker of the house, the congressional majorities, the regulatory burden, or the spending.

          It’s an electorate willing to vote for them.

  4. Wolfe made a *lot* of money — the 91 percent marginal rate started at $3 million. http://online.wsj.com/article/SB10001424127887324705104578151601554982808.html?mod=WSJ_Opinion_LEADTop

    In 2011 dollars, that’s $22.5 million. Going the other direction, the $250K that makes you “rich” in Obama’s eyes is about $33,000 in 1960 dollars.

    • Sigh. I’d love to make THAT much… even with the taxes…

    • Okay, I think that $3 million was already inflation adjusted — the 91 percent marginal rate started at $400,000 in 1960 dollars.

      And yeah, I’d settle for $3 million and then taking the rest of the year off.

      • I am old enough to remember 1960. “Adjusted for inflation” is a very peculiar concept which works well for some items, less well for others. As the kind of person inclined to look through those “If you were born in 1960″ cards and compare prices … some things don’t compare easily.

        The costs of technology have come way down. The first time we bought an secondary hard drive for a PC we paid $200 for a 200 megabyte drive the size of a trade paperback. Now they sell 4G thumb drives in the grocery store for $20 — it isn’t even possible to buy anything under 2G, which means your data is rattling around in your hard drive like a pea in a soda can.

        Gasoline … I remember buying it for under twenty cents a gallon back in 1972 … but I don’t recall how many miles to the gallon I got; I would guess about 12. Going back to 1960, I don’t know what gas cost, nor how many mpg a typical car got, but I do remember that car A/C and automatic transmission were high-end luxuries. Car stereo? Hah! AM radios. Of course, back then there was actually stuff on AM the average person would want to listen to; pop music, for example.

        There is no denying that, overall, the value of the dollar has diminished. Heinlein’s rule of thumb (avg hours of journeyman carpenter labor required to buy a pound of protein or a loaf of bread) is still pretty good, for limited samples. My own measure is pretty good: how many hours of min. wage labor do you pay to see a movie? Back when I first earned my own money the min. wage was about $0.95, a movie was $1.50 — an hour and a half of mw got me into a movie. Another half hour bought popcorn. In the Reagan years when I first figured out this relationship, mw was $3.35, movies were $5.00 — popcorn about $1.75 … and nowadays the costs run about the same, depending on whether you go to a discount matinee, see your films in 3D etc etc.

        In other things, well, try to imagine what your PC would represent in 1960 technology. A clean room probably the size of a small house, sucking up electricity and throwing off heat enough to warm the globe all by itself.

        • Wayne Blackburn

          It’s impossible to compare your desktop PC to 1960, I’m afraid. The average PC, let’s say 2 years old, because lots of people keep them at least that long, is more computing power than, probably, the entire world had in 1960. An iPhone represents more computing power than the largest supercomputer from 30 years ago, in 1982.

          • I can relate to what you said, Wayne. I began working with computers in 1966. At the time, the computer the Air Force used for almost everything on the base where I was stationed was a Burroughs 263, with barely 256Kb of base memory, and NO storage. It was basically a huge adding machine. I learned to “program” (plug the right wires in the right place on the patch panel) both an IBM 836 keypunch machine and an IBM 401 tabulating machine. I learned to keypunch/verify, run a sorter, and all the other things that went with a punched card database. I also went through the “advances” to tape drives and external disk packs. I have 4 MB of RAM in my 5-year-old computer, which was about equal to the VAX 11/70 we used to run the intelligence database for my last unit. A modern dual-core processing system connected to a 20Gb RAID device has more processing power than most universities had until the early 1990s.

            The astonishingly rapid advances in computer power are now changing anything and everything that requires computation. We no longer make maps by hand, it’s done by computer. Fracking is affordable now (it’s been known since the 1940’s) because we have the computing power to manage it. Computers aren’t changing EVERYTHING, but they’re changing everything that dealt with data management, computations, and information flow. Since that’s about half of what modern commerce entails, many commercial businesses themselves are being forced to change.

            We are on the cusp of a dozen more changes as profound as the advances in computer technology. Only government can stop them, and possibly not even government.

            • Wayne Blackburn

              “Logic” says there has to be a limit on computing power (in small systems) somewhere, but we have already exceeded the limits that “Logic” said we would bump our noses on as little as 15 years ago.

              The next story I am planning to work on (which will probably take me better than a year, as I just finished the first draft of the short I started working on after finding this blog [thus making it Sarah’s fault], and it’s only 12,000 words) will be set just 30 years in the future, but even the phones will be capable of fully understanding normal speech, and usually capable of understanding puns, weather prediction will be available in blocks approximately 100 yards across, and a plethora of diseases will have fallen to sophisticated data analysis such as that currently being used to analyze protein folding, in order to predict methods of attack.

    • Wolfe’s example is one of many. Ronald Reagan reportedly saw the light on this when he realized that earning an additional dollar required more effort than it was worth. At some point you place a higher value on your leisure than on the money you would get from exerting yourself and putting up with the !@# you have to stand to earn that marginal dollar.

  5. I am elderly. We live on almost 7 acres in the wilderness, about 12 miles from the Walmart in our town, and the HEB grocery store. The biggies around here. We have a generator, and a travel trailer that uses propane gas. These will both be handy should the power fail.
    We have a 3000 gal water tank we keep filled from our well. The well pump uses 220 v electricity the pump from the tank uses 110, so we could use it with our small generator.
    We are not going Galt, we are just retired and want to be prepared for hurricanes and other, including financial calamities. We have a pension, we have some money in different stocks and funds, but not much and that has gone down considerably in the past few months.
    We just purchased a new Expedition. We had planned to pay cash but when we found how much the interest rate was we financed half of it, knowing the dollars we paid it off with would negate any interest in fact.
    We also bought a new refrigerator with a larger freezer. So we have a lot more freezer room. But if the power is off longer than we have gasoline for the generator, all that food will have to be cooked at one time. We have plenty of woods and a lot of dead wood because of the drought so we can cook with wood if necessary. We do have a wood stove for emergencies.
    I caution people about having food that needs water and fire to be prepared. Rice and beans are very good and nutritious but need cooking with water to be edible. Canned goods do not. When I lived where I could have a good garden I canned, now I can’t have a good garden and I don’t. So I try to keep my pantry pretty full, including plenty of canned beans and potatoes. Not my favorite flavor for potatoes but they keep well.
    After being married for 54 years we have plenty of clothes, bedding, and other accoutrements which are mostly unnecessary to life.
    We just call this our disaster preparedness, not going Galt or Doomsday prep.

  6. I’ve lived on the Gulf coast long enough to have been personally impacted by two hurricanes. Nothing much to do with going mini-galt. But having a bug out location?

    You’d better be preparred to drop everything and run for it at the first whiff of trouble. In hurricane Rita, just a few weeks after Katrina hit NO, Houston attempted an evacuation. Rather than the careful gradual “Let the people on the coast got first, then the next echelon . . . ” Everyone hit the roads at once. 24 hours stuck in traffic wasn’t unheard of. It was so slow–and gas stations out of gas so quickly–that people were turning their cars off, and pushing them a few car lengths at a time.

    It took days to recover, because delivery trucks won’t go into huge urban areas with no gasoline available. Ditto armored cars taking and delivering cash to stores. The grocery stores were credit card only, they had no change. Keep several means of paying for things handy, no telling what will or won’t work when there’s an emergency.

    Try to make your home as bug-in-able as possible. Or be ready to leave fast, ahead of the crowd, and try to locate your bug out spot on the same side of your city as you live on.

    Second hurricane lesson. All it takes is a few large branchs or mid-sized trees down to trap you–or keep other people out of your neighborhood.

    And buying food ahead–the kind of food you eat regularly–can help you past sudden price spikes, shortages, and money crunches.

    • See what happens when you threaten “price gougers”? People don’t raise price in crises, and so don’t inhibit people from buying things they don’t need.

  7. I grew up here, then we retired here, so I do know the dangers of hurricanes. We have lived on one coast or the other all our lives. We have sons in Austin and San Antonio so we have refuges. Getting back in past the authorities is a problem so it is hard to get my husband to think it necessary to leave. Also built the house with all 6 x 6 studs and so many tie downs it is almost ridiculous. But it should withstand a very strong wind. The men who framed it for us told us they planned to come here in case of a storm, joking of course. We have gone through Hurricane Force 1 winds once. We were here for that. Thanks for the kind advice.

  8. Clark E Myers

    Chest type freezers – especially as noted used/estate sale – run cheaper to buy and often to use. Somewhat less convenient for daily use and vastly better when the power goes out.

    Water tends to be easy to store and a good filter will be handy in the long run. Not so easy as it was when Sysco had a cash and carry store on South Broadway but lentils, split peas, beans and brown rice in true bulk are cheap and store fairly well – mix with ramen for seasoning and a complete grain/legume protein..

  9. It used to be I could create my own work if there was no full time job to be had. I’ve washed commercial windows and washed fleet trucks, done plumbing and sold my own metal work and wood art. I’m just too arthritic and old to do that sort of thing anymore. My books are a nice addition to income, but they are not enough to live on. I depend on Social Security disability and to me the system is in doubt. Really Social Security could be saved, but they lump the monster Medicare with it any time it is discussed and that can’t be rescued unless something is done about the 9% annual increase in health care costs and the fact health care is exempt from all the antitrust laws.
    We also live in a condo complex, which is good since I’m not physically up to lawn care, snow removal, and exterior maintenance. However if the electricity goes out this complex is uninhabitable.
    A couple years ago our power went out in the summer for four days. We were the only couple in 72 units capable of cooking a meal. I cooked breakfast down by the pool for everyone who wanted to come.
    If things get really bad we have offers from several people to bug out on their property. Being prepared to do that is as good as we can do.
    Galt? Galt would never let himself depend on gubbamint cheese like I do.
    Am I ashamed to take it? No, I paid in so much that I qualified for the top rate decades ago. I just don’t trust them to hold up their end.
    We have bug out bags and an exit check list on the refrigerator. We have as much food and essential supplies as we have room, which isn’t much in a tiny two bedroom condo.
    The main thing we have going for us is that if we walk out the door we owe nothing for which we can be pursued or sued. We still owe some on our condo but both vehicles we own are in good running condition and paid off.
    The mortgage will be paid off in 5 years and it is a trivial $312/ mon.
    What I worry about is price inflation doubling or tripling the cost of food and medicine, and the fact that we are 16 miles from Detroit. We are getting armed robberies of both businesses and individuals in town this year after 20 some years of not having that sort of problem here. We are well away from any expressway and it was a protection. People did not rob here because there is no easy way out of town. Well those days are gone.
    I agree very few people can live the Galt dream.

  10. Our tax code makes receiving bartered goods and services for your services taxable unless the good you receive is for something deductible as a business expense. You are still supposed to report both the gross income and the deductible expense which needs to be reported to the IRS on a 1099 form if it exceeds $600. If you advertise for barter on a website, expect an eventual visit from IRS agents who follow such exchange postings.

  11. d) Second, if you can buy memberships (to museums, to zoos, etc.) that are tax deductible, you’re both buying entertainment for a year and reducing your tax bite.

    A word about things being “tax deductible”.

    First, that only matters if you itemize your deductions. If you are married and filing jointly, your standard deduction — what you can take without itemizing, meaning you don’t have to provide receipts or the like — will be $12,100 in 2013. To gain ANY benefit from itemizing you must first accumulate OVER $12,100 in deductible expenses, which mean, in practice, that if you have $15,000 in deductible expenses the benefit to you is NOT $15,000 but $2,900.

    For most people the single largest deductible expense is mortgage interest, with property and state income taxes following behind. The additional benefit of a $150 museum membership is not likely to materially affect your taxes. If you are above the standard deduction threshold any additional deductions are of some value, and if you fall below that threshold they provide no tax benefit.

    Second, the utility of that tax deduction depends on what your tax rate is. A $100 additional deduction will “cost” somebody paying a 15% tax rate $85; that same $100 only costs the taxpayer in the 35% bracket $65 — making the deduction (or rather: the expenditure to purchase that deduction) significantly more valuable the higher your tax bracket. If you are in a 90% tax bracket, a $1,000 season ticket to the opera only actually costs you $100; the schlub in the lower income bracket of 20% must reduce his after-tax net income by $800 for that same season pass. (Does this explain part of why so many rich folk endorse higher tax rates?)

    Any deduction that reduces taxable income may move the taxpayer into a lower bracket and thus have even greater tax benefit. Keep in mind that tax brackets do NOT reflect your TOTAL tax rate, merely the marginal rate for each additional dollar earned.

    Tax policy is a very complex issue (some of the cynical among us would say this is deliberate) but some basic principles should be kept in mind. Tax deductible expenses that don’t amount to more than the standard deduction are worthless; those that do accumulate to more than that std deduction are valuable only to the extent they exceed that std deduction. Tax deductions are more valuable the higher your marginal tax rate, thus they are regressive in their effect. Finally, all tax analysis should be undertaken in terms of how they affect your net after-tax income — the money you actually end up with.

    Sorry for such a lengthy disquisition on a topic that causes most people’s eyes to glaze over within a paragraph. You don’t even want to get me started on how scam artists like Warren Buffett advocate higher marginal tax rates as a way of increasing the market for the tax-avoidance schemes he profits from selling.

    • we deduct at least my share because it’s very rare for me to go through a museum and not come away with a story idea.

    • Oh,and my business itemizes. Have to, when you think about it. Keeping track of the dang expenses is a pain and a half, though.

      • Yes, businesses employ different principles than individual personal taxes. Essentially anything that contributes to generating income is an “above the line” expense, which for writers means that life is pretty much deductible as a cost of doing business (CAUTION: IRS Auditors are unlikely to share this perspective.) These deductions only apply against income earned through the relevant activity, so that while Sarah can shield her book selling income by the amount of such expenses (for example: this blog is to promote her book sales, therefore the cost of hosting this blog may be charged against any income derived from sales of her books.)

        It is also worth noting that if Sarah’s “writing” expenses in a given year exceed the income derived from book sales (and, I guess, any paid public appearances) she has a Net Operating Loss which can be carried over and employed to reduce such income for some number of future years.

        BTW, that “paid public appearance” reminds me: for Sarah her cost of attending cons and promoting her work are deductible business expenses.

        But in such instances the “tax deductibility” of museum memberships is irrelevant. They are tax deductible for ordinary persons as contributions to a non-profit organization, thus a charitable donation. For Sarah they are deductible as business expenses, which renders the non-profit status of the organization irrelevant.

        • Sarah’s assertion about her business itemizing brings to mind: she is wrong, at least to the extent we think of “itemizing” tax deductions. What she is actually doing is accurately keeping up with her operating costs. Again, business and personal are very different things so far as the tax code is concerned.

          To illuminate, say a person maintains an S&M dungeon, fully equipped, in their basement. The professional S&M provider*, on the other hand, not only gets to reduce their taxable income by the cost of maintaining a home office (which will eventually be reflected in the taxable gain from sale of that home) but also can deduct the costs of whips, manacles, feather ticklers, bustiers, spiked heels, ball gags and whatever other items are needed to provide the customer the full experience desired. You pervert hobbyists, on the other hand, get no deduction.

          *NB – this only applies in communities which legally permit such services. Which, assuming no actual sexual service is included, might be anywhere in the US. While I doubt there is much market for non-sexual S&M entertainment, I have not engaged in much (alright – in any) research on the matter. I wonder what would happen if somebody argued to the court that their sexual favors were entirely gratuitous, they only charged for the role-playing? After the judge stopped laughing, of course.

      • My husband has authored a book and scientific papers so he does benefit from the use of those deductions, but it is more than a pain and a half, and he has PhD syndrome so he does our taxes even though his field is science. PhD syndrome: self explanatory.

  12. Sarah, Maybe Going Galt is the wrong approach, and you should consider Cloward-Pivin instead.

    Two things in my life make me think that. 1) I was once laid off and went without work for a few months. 2) I put my kids through college.

    In both of those situations, doing the right thing cost me thousands of dollars I might have gotten from Uncle Sugar. In the first case, because I lived without debt, had no car payment, or mortgage payment, I couldn’t qualify for gubmint assistance, whereas HAD I lived like a spendthrift in the prior months, I would have.

    Similarly, when it came time to apply for college assistance from the gubmint, my good sense and frugality caused the DOE to give a lot of money to the families of my children’s friends and none to me. ERGO, if you think some kind of hyperinflation is in the cards, being one of the folks who are in debt up to their eyeballs is clearly the right idea. Particularly, if you can transfer dollar-denominated assets that show up on a FISA application to tangible-assets that do not.

  13. The answer when crunch time comes will be a new system called micro-mercantilism. The idea began when Bill Whittle introduced the idea of creating parallel economic systems in response to Obama Term Two. Members from BW’s old braintrust are working on the problem now. I drafted the introduction to the theory this morning and sent it by email to the core-group. You’ll be hearing from us when the cocept has been fully developed and the kinks worked out.

    • I’m sure most of us will be watching for it.

    • Wayne Blackburn

      I don’t know if you were reading a few days ago, but Sarah suggested something of a similar (though probably not as fully-formed) nature.

      • Either there’s more than one Wayne Blackburn or it’s a very small world. I have you listed as a member of BW’s old E3 core group.

        • Wayne Blackburn

          Same one. I sent Sarah an email asking if she were in that list under a pseudonym, because they came up on the same day.

  14. Yes, it made no sense to my husband that he had no credit rating at all, after paying off his house mortgage, and with no job, but that I had a decent credit rating a few years after bankruptcy, but with a good paying job. We got both our names on the car loan and he had a good credit rating while we were paying on it, but I don’t know if he still has one now that the car has been paid off for over a year.

    Inflation and finances make my head hurt. :(

    • Makes no sense to me either Naleta. I have a great credit rating, but no one wants to lend me money. My hubby has a bad credit rating even after paying off a personal loans–etc. They won’t lend him money either. Makes my head hurt too–

    • I know someone who refinanced their mortgage to get a shorter term with a lower rate. Even though they will save a ton of money in the long term, their credit score dropped a hundred points because the payment went up.

      Dave Ramsey says his credit score is zero because he does not borrow money. He could not rent an apartment. But, he could write a check and buy the building.

      FICO can work in mysterious ways.

      • I checked right after and not so long ago and my score is dropping now too. I went broke and then consolidated everything and once I paid it all off I have never financed anything or got any new cards. I got bombarded with offers for a few months after but since, not a peep so I got curious and looked again at it. It is now lower than right after I went into consolidation negotiations.
        Sadly though I ain’t gonna be buying an apartment building anytime soon.

      • My sister had a trick and a half getting a credit card because she didn’t get one right out of college — debit card was working fine — and she concluded that someday she might want to buy a hosue and so she needed that rating.

    • Its not a good idea to worship at the altar of Fair Isaa Credit Organization …

      That’s my advice to my bankruptcy clients. Because people get talked into bad advice in the guise of “repairing” their credit rating.

  15. Many of the comments reflect simple commonsense tightwaddery. See The Tightwad Gazette (Amy Dacyczyn) for ideas to expand on frugal living. Some’s a bit dated, some wouldn’t necessarily apply to SHTF/TEOTWAWKI situations, but making commonsense tightwaddery just a normal part of living is both pretty easy and especially smart, in times like these (I tend to go with “anytime” but folks’ mileage varies on the issue).

    I’ve engaged in most of the frugal/preparedness behaviors/activities noted in comments so far–some more, some less–but have also done a few things I haven’t seen mentioned.

    Dumpster diving/large refuse picking. Oh, yes! Even if it were just the 4″-think slabs of styrofoam I picked and have used to make cold/hot boxes, make common “coolers” super-insulated boxes and seriously beef up the insulation on our chest freezer, this activity has been worth it (but the really good furniture folks throw out–refinish and sell, give away, trade or use–can astound, and small appliances and electronics? Ditto. Repair, clean up and use, give away or swap and etc. for an amazing array of stuff our throwaway society just discards). I also have no problems asking at a construction site if they’d like me to haul away some scrap for them. :-) (The 12′ epoxy-coated wire shelving one site had just thrown in a dumpster at a reno? Mine. A great way to turn a small spare bedroom in our older home into a large walk-in closet.)

    As for bugout/bugin: our location is good for either. Heck, our lil town would be a great bugout location for most folks. Seriously. For a lot of reasons. We’ve had mini-previews during ice storms, floods, etc. that have taken out power, destroyed roads, etc. in recent years here, and have found that we (as a community) have pretty darned good disaster handling capabilities w/o waiting on the state or the feds. Can do. Food? Small scale agriculture only (apart from the d**** chicken houses). I know more than a few (lots) who garden their “retreats” (bugout locations) and have for years, drop by AM/PM for a quick check on the chicken coop, etc. My fav beef is from a 60-acre spread in the “back of beyond” that raises miniature highlands… that thrive on eating darned near anything a goat would, and more.

    I just hope it doesn’t all come to a SHTF/TEOTWAWKI scene. *sigh* Not what I’d want children and grandchildren living through.

  16. Just want you to know I really enjoy reading your blog. I went out the other day and picked up ‘Renegades’ at B&N and I’m looking forward to reading it (I can’t yet because I don’t have ‘Thieves’).

  17. We can all go Galt to the extent it is feasible for our unique situation. That said, why cut off your nose…
    A few ideas: If you live in a sales tax state, consider private party used transactions. Maintain and keep autos longer. Farmers markets for produce and meat.
    As far as prepping goes, the disaster that you experience is not the one you prepared for. Consider the state of the electrical grid in many areas of the country. Being prepared is just common sense.
    Let’s not forget the black market. While I am not commenting on the ethics of it, it is becoming widespread in my area, especially for construction and labor. You can always ask if there is a cash discount.

  18. I just wanted to add, that “Going Galt” sometimes just…happens. For example, I have just recently accepted work where I currently live, in Utah. While I was looking for work, though, I considered a company in Palo Alto, California–several, in fact–but ultimately, between the significantly higher cost of living, the concern we’d have with homeschooling in California (we didn’t like the hoops), and the realization that, because we’d have to have a much higher salary just to “break even”, we’d also be paying a lot more in taxes…

    Well, let’s just say that staying in Utah Valley edged out even thinking about moving to California…and that California will NOT be getting my tax dollars, as a result. (And neither will Uncle Sam, for that matter.)

  19. Another Denver area museum you may want to consider:

    The Colorado Railroad Museum out in Golden.