In 1981—the last year I was in college and the first year I was working at a real job, long-term interest rates got very high. I thought this was great. (I wasn’t in the market to take out a mortgage, but rather was starting to save money.)

Graph of 3-month and 30-year interest rates from 1977 to 1983

I actually spent a lot of time calculating how much money I’d need to save and invest in long-term treasury bonds, in order to support myself without needing a regular job. I can remember when long rates got up around 14%, thinking that, since I could live on around $20,000 a year, I’d need a base amount of about $143,000 invested, plus enough extra to cover taxes, and to reinvest against inflation, totaling perhaps $300,000.

I was ahead of FIRE (Financial Independence Retire Early), and I rather missed out on the “reduce spending” half of the idea, so I didn’t make much progress toward my $300,000 goal for the first several years. It wouldn’t be until the early 1990s that I figured that part out, and by then interest rates were a lot lower. Worse, they were falling pretty fast, making the whole thing a lot harder.

Graph of 3-month and 30-year treasury interest rates from 1992 to 2026

Rates kept moving against my goals pretty steadily, right through the great financial crisis in 2007, and then again during and after the pandemic in 2020. Of course inflation was falling until after the pandemic, making it seem a bit less difficult to invest enough that the return would support me even after allowing for inflation. (And, as a bonus, the Treasury started issuing TIPS, which adjusted their value to keep even with inflation, and paid their interest rate on the adjusted value. You still had to invest enough to cover inflation, but a lot of the risk and guess-work was removed.)

Now, finally, rates are moving in the right direction again. The 30-year TIPS is now paying an inflation-adjusted 3%.

The inflation calculator at the BLS says that $20,000 in 1982 is equivalent to $71,046 today. At 3% you’d need to invest $2,368,186 in TIPS to bring in that much cash. (But you wouldn’t have to worry about inflation.) Weirdly, the same BLS calculator says that the 1982 equivalent would have been $666,666. So just over double the $300,000 that I imagined would have sufficed back in the day. Which is perfectly reasonable, considering that back in the day I could have gotten 14% on my money.

Anyway, after a long period during which it was impossible to invest for a real return on a safe asset—what you want to do, if you’re doing the FIRE thing—we are finally back to having that option. It’ll be good for people like me. I think it’s good for the economy as well, even if it sucks if you want to take out a big mortgage so you can afford to buy a bigger house than you need.

A slug crawling on a wet sidewalk

I am almost completely unconcerned about the “dangers” of AI that I’m hearing about.

In particular, I’m completely unconcerned about the danger that terrorists (or bored high school students) are going to use AI to make a bioweapon. I guess the concern is that AI will be able to try thousands of changes in the time a human could try three? That is different from what evolution has been doing for two billion years in no way whatsoever.

Similar only in that it is another AI danger that’s easily ameliorated, is AI-facilitated hacking, which the AI firms want us to come up with regulations for.

The fact is, we scarcely need any new regulations at all. Just an ordinary legal structure where, if someone using AI does something improper, the legal and criminal liability falls equally on the person prompting the AI and on the company that wrote the AI.

Of course, if the harm passes through someone else who’s supposed to be taking due care (such as your bank or broker) that person also has ordinary responsibility. (So if an AI helps someone steal your retirement account, the broker holding your retirement account has to make you whole, just as if they had handed your money over to someone who hadn’t used AI. About the only AI-related regulation needed is something making it clear that the broker can not only sue the criminal who stole it, but also the AI firm whose tool was used to effectuate the crime.)

My point is that all those supposed horrible dangers are perfectly ordinary, and there is no need to do anything special at all.

What’s really interesting is why are the AI firms and AI scientists trying to gin up all this worry? Could it be that they can see that without some buy-in from governments the companies are all going to collapse in short order?

That’s my best guess.

The Bureau of Engraving and Printing has a bunch of downloadable guides to tell cashiers and tellers (and ordinary folks) how to identify genuine currency.

A $100 bill

So now seems like a good time to mention that a couple of new U.S. currency note designs came out while I was writing for Wise Bread, and each time I wrote a post or two about them:

And, of course, I wrote a general article on spotting counterfeits.

Many Americans want fewer immigrants, primarily because they worry that immigrants are competing with native-born U.S. citizens for jobs. There are of course other reasons. Some people are racists. Some people imagine that immigrant populations will include radicals or terrorists. But I think the jobs one is the big one.

Border fence with barbed wire at the top and a sign warning "Danger high voltage no trespassing"

I think I see a good way to fix this particular problem. A good enough way that we probably don’t even need to have visas, or immigration checks at the borders. Most important, we wouldn’t need to have a police state with ICE agents sweeping up brown people and demanding to see their papers.

My idea is simple: add a tax surcharge—perhaps 15%—on companies, on the payrolls of immigrants, legal or not. (Plus a twist I’ll mention in a minute.)

This fixes several problems at once.

First, it means people can quit arguing about whether companies are hiring immigrants because of their skills, or just because they’re cheaper or more willing to work long hours, or whatever. If companies are willing to pay an extra 15%, they’re definitely in need of the skills. (Maybe the ideal rate is 10% or 20%. It should specifically be enough that companies will hire native-born workers if they’re capable of doing the job, because they’re cheaper than foreign-born workers after taxes. A bit of experience will show us the ideal rate.)

Second, it’ll raise wages and salaries for Americans, because even a big raise would be cheaper than hiring an immigrant.

Third, it’ll greatly reduce the cost and trouble of the numerous visa programs. In fact, we can probably just get rid of visas. Anyone can come to the U.S. and work, as long as their employer pays the surcharge.

Of course this only works if employers actually pay the surcharge—and why would they do that, if they’ve been cheating on employing illegal immigrants all along?

Well, the twist I mentioned above is to solve that: Make the statute of limitations on this tax ridiculously long. Maybe 35 years. Add on some severe penalties for non-payment as well—double the original bill, plus interest and the ordinary penalties for unpaid taxes.

Oh, and spread the liability around. If the immigrant is technically employed by a contractor, but he or she works at your site, you’re also liable for the surcharge. (I don’t expect it would be possible, but I’d like to see the CEO be personally liable for the surcharge, in cases where the corporation went bankrupt somewhere along the line.)

With a policy like this in place, employers—instead of looking the other way when they suspect someone is an illegal immigrant—now really want to know. Because they either have to pay the surtax now, or else they’re on the hook for double that money for years into the future.

I’m thinking of 35 years, because it’s long enough that the immigrants might be reaching retirement age about then. If we throw in a little incentive—perhaps 10% of the tax collected—they might be willing to report all their former employers when they’re ready to retire. Remember: They don’t owe any extra tax—the liability is all on their employers. But they can collect that little 10% as a boost to their retirement by ratting out three decades of tax-cheating employers.

I think this solves everything.

Since everyone is legal, there’s no need to worry about whether someone is “documented” or not. No need to worry about visas. No need to check anyone’s papers.

Oh, there’ll still be a need for papers—employers will want to be sure a potential employee is a citizen—there’s just no need for the police to check them. And of course, some citizens might have trouble coming up with papers. But those problems are no worse than they are already, with the bonus that they can be sorted out at leisure in ordinary courts, rather than in special immigration courts with people in detention. Citizens can show they’re native born all sorts of ways, just like they do now if they need to get a passport, but don’t have a birth certificate. Naturalized citizens have naturalization papers, plus there are other records.

Companies can copy and maintain the documentation to show that their employees were citizens, or else pay the taxes.

Nobody is “illegal.” Anybody can call the police, get a drivers license, get car insurance, send their kids to public school, go to the doctor, all without any worry that they’ll be deported. (Of course, they might not stay long, if they don’t have skills that justify their employer paying an extra 15% tax to employ them, but that’s okay too.)

We can save a bunch of money on border security, because anybody can come into the country, as long as they’re willing to compete with the locals at a 15% disadvantage.

My main interest here is in getting rid of the need for police-state behaviors on the part of the government. If everybody is legal, there’s no need for them. My secondary interest is in living in a more diverse community. I like having foreigners around. I like living among a diverse ethnic population. I think it could be awesome.

As a bonus, those extra taxes will fund quite a bit of extra government spending. Maybe even makes some headway on the national debt.

I had completely forgotten about this post, written more than 20 years ago, even though I went on to write about exactly this topic for Wise Bread for years.

This post was about the difference between playing at being poor (which gives you a bunch of psychic benefits) versus actually being poor:

Playing at being poor means living in a cheap apartment, eating cheap, healthy food prepared at home, having only one car (and not a new one), and so on. It’s really only a matter of giving up stuff–and not even all stuff. You can easily justify an extravagance or two. You might give up cable, but have a cable modem. Give up movies, but go to plays. Give up coffee shop coffee, but buy Jamaican Blue Mountain for home. In many ways, it’s the way I live now. But I try not to be smug about it. I know the difference between what I’m doing and being poor.

Being poor isn’t frugal or safe or healthy. Being poor means skipping an oil change because the alternative is skipping lunch for ten days. Being poor means living in a dangerous neighborhood. Being poor means wearing shoes that hurt your feet.

The difference is a matter of capital. Having capital is frugal. If you have capital you can play at being poor and actually live more cheaply than a real poor person. A frugal person’s car lasts a lot longer than a poor person’s. You can buy when things are cheap, instead of paying whatever price they happen to be when you simply can’t do without them any longer. Similarly, it’s safer and healthier.

Source: 2002-03-06

There’s a bit more if you click through.

Me (giving empty electrolyte supplement to my wife to carry back to the kitchen): I had foot cramps in the night last night.

Jackie: You had [mumble mumble]?

Me: Foot cramps.

Jackie: Oh. Okay. That makes sense. I thought you said foot prints.

Me: You mean, like foot prints at a murder scene?

Jackie: I hadn’t thought of that. I was thinking maybe muddy footprints on the carpet.

My brother and I are creating an on-line magazine called Elegant Lich.

Our plan is to publish science fiction and fantasy stories. You can read our planning blog here: https://blog.elegantlich.com/

We spent some time looking into creating an Illinois LLC, but are currently leaning against that idea. It would be a lot of work to get it all done and to keep the paperwork right going forward. And although (in Illinois) it wouldn’t be too terribly expensive, it would still cost a large fraction of the cost of putting out an issue of the magazine. So instead we’re thinking we just won’t call it a business, but rather just a hobby. There are some things we wouldn’t want to do if it’s just a hobby (such as sell stuff), but it’ll save us time, money, and trouble.

Our tentative cover art is by Hermann Paul, who did this woodcut as well:

Source: https://commons.wikimedia.org/w/index.php?curid=197103640

Normally I want to respond to every report that suggests that cannabis has very few studies backing up its effectiveness to point out, “That’s because doing such a study was illegal for most of the past century.” But this time I’ll just say, “Point to a few approved drugs with ‘real benefits’ that aren’t ‘limited to only a few conditions.'”

A major review finds medical cannabis widely overestimated and potentially risky, with real benefits limited to only a few conditions.

Source: ScienceDaily