Just stop paying your mortgage
signonsandiego.com — Interesting read on the recently-passed bailout legislation, suggesting that foreclosure is essentially not an option for many banks these days, or at least, won’t be an option in the very near term.  If you’re struggling under a mortgage and don’t have much equity, the smartest thing to do might be to simply not pay.

Star Trek movie updates
firstshowing.net — Entertainment Weekly has a handful of photos, finally, from the new Star Trek movie, due out May 8, 2009.  I’m still completely skeptical that this will be any good, but will that stop me from seeing it on opening night?  Of course not.

McCain Frowns, Rolls Eyes, Blinks 3000 Times
huffingtonpost.com — It always amazes me how presidential elections, in the end, boil down to personality.  For whatever reasons, independent swing voters don’t like it when candidates seem condescending or mean during debates.  (I’m the opposite; I love being condescending.)  In the third debate between McCain and Obama, watch as Obama starts to get very cranky.  And please, somebody, get this guy some eyedrops.

FriendFeed Unveils New Live Updater
techcrunch.com — FriendFeed earlier tonight apparently unveiled a new auto-updating non-refresh scrolling updater.  As this article says, the new functionality turns the Internet into a chat room.  Like, the whole Internet.  I haven’t played with this yet, but I’m excited about another way to procrastinate!

TMobile G1 Review
engadget.com — The gadgeteers at Engadget finally gets hands-on with the new TMobile G1, which looks pretty badass to me.  I’m not about to buy one tomorrow, as it seems there are some kinks left to work out.  But this seems promising.  Finally, TMobile customers get a new product before everyone else!

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Posted by Joe on October 15th, 2008 • Permalink

Lest you think I have not written on this website for two weeks because I am lazy, let me assure you of two things. First, I am indeed lazy. But second, my excellent excuse for tardiness is that I have moved to Colorado. More on that later. In the meantime, I will share with you some random thoughts that have occurred to me over the last two weeks.

It’s Getting Hot In Here…

My deep thanks go out to all those Republicans who, for the last several decades, have been telling us that global warming is a myth. I’m talking about you, Tom Delay, and you too, Bill Frist. Thanks, fellas, for ignoring the vast majority of the scientific community for all these years.

My initial reaction to Republican denials of global warming was that maybe these guys are just stupid. Or perhaps, I thought, they are skeptical in a healthy way. Like the folks who denied that cigarettes cause cancer, or the folks who supported using Agent Orange, maybe the Republicans were just uninformed. But then it finally dawned on me: They just like it hot. They know that global warming is happening, but they deny it because they secretly want the planet to become a scalding desert.

But why would anyone want that? Well, I finally figured it out. I read this report recently that found a negative correlation between Republicans and sex. Essentially, ABC News did a little study a few years ago, and found that Republicans are basically closeted on sexual issues. They are far less adventurous, sexually speaking, than their Democratic counterparts. In almost every major category, Democrats have “been there, done that” and Republicans have not. In layman’s terms, it’s like this: A Democrat is going to get absolutely smashed in a game of “I Never”, and a Republican is going to stay dead sober. The most telling statistic is this: Republicans think about sex 10% more often than Democrats.

Eureka!, I thought to myself. Who would want the planet to be a scalding hot desert? A person who doesn’t see much action in the bedroom! (I’ll go ahead and draw the connection for slow people: When it’s hot outside, women wear less clothing, which is ideal for a typical Republican, who needs that kind of stimulation.)

Then today, the Chicago Tribune reported in this article that the Earth’s temperature is at an all-time 12,000 year high. Looks like the Republicans’ plan is working. Thanks again, fellas.

The Earth Is Flat…

I know we’re all supposed to believe that whole Copernican idea that the Earth is actually a sphere that orbits around the sun, yada yada. I bought that theory too, hook line and sinker. But then, I drove through Nebraska.

My heartfelt sympathy goes out to all y’all Nebraskans. As I drove through your great state, I couldn’t help but wonder: What in the name of all that is holy are you doing there? I admit an occassional obsession with the notion of a barn dance, and I like country music and corn chowder as much as the next guy. But I have to ask: Are you aware that there are places that are not flat?

In related news, I sometimes watch the Discovery Channel, and I saw recently a show about Antarctica, where the temperatures sometimes reach 140 degrees below zero. The narrator was raving on and on about some beetles, which are able to survive in the cold. How amazing, said the narrator, that life can adapt to even the harshest of environments. But the narrator did not answer the question that immediately popped into my head: Would the beetles still live in Antarctica if they knew there were other places to go?

On Michigan Football…

I resolve to never again move in the fall, because I have now missed three consecutive weeks of college football. I did listen to the Michigan vs. Notre Dame game on the radio while driving through Nebraska (see above), and I listened for three hours on my cell phone to play-by-play commentary of the Michigan vs. Wisconsin game from my friend Jim. (Thanks Jim.) Since I did not actually see either game, the Joetown analysis is once again lacking. My apologies. Nonetheless, I have three things to say.

First, to Notre Dame: Ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha. Ha. I hate you.

Second, although I did not get to watch the games, I did play them on my XBox. Michigan crushed Notre Dame 108-0, and then demolished Wisconsin 122-0. Once again, in case I wasn’t clear: Ha.

Third, and this is important: Predicting a several week inability to post things on Joetown, I arranged with my buddy Todd to post updates on my website concerning Michigan football. Like me, Todd claims to be a rabid Wolverine fan. He assured me that he would keep up with things; I even gave him a password so that he could write what I imagined to be creative little missives about how brutally thrashed the Irish were last weekend. I was sure that Todd would fulfill this task because he did, after all, graduate from Harvard University, and no one from Harvard University ever drops the ball, ever.

But like Brady Quinn, Todd fumbled his prestigious task. Yes, I’m angry about that. But on the other hand, I now have the opportunity to analogize Todd to Brady Quinn, and that’s kind of exciting.

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Posted by Joe on September 26th, 2006 • Permalink

For the last couple of years, Congress has been debating how to address the problem of the “patent troll”. In June, the Senate held hearings on the issue, and various pieces of legislation have drifted in and out of committee since 2004.

Patent law is not a hot-button issue like abortion; you don’t see protestors on the steps of the capitol holding up signs to “abolish the doctrine of equivalents”. Most people (read: most voters) don’t care a whole lot about patent law. And very, very few people know anything about it in the first place. It’s an exceptionally complicated area of the law, and in attempting its reform, Congress has waded into the deep end of the pool.

But the issue has teeth. Estimates vary, but as much as twenty billion dollars are spent in the U.S. every year obtaining and enforcing patent rights. Some industries, like the pharmaceutical and computer industries, are absolutely dependent on the patent system; without it, they simply would not exist. Patent law may be an arcane field, but most seem to agree that it’s vital to the concept of capitalism itself.

There are many problems with the patent system, but none more annoying than the problem of “the patent troll”. A patent troll is a holding company which has only one asset: a patent, and only one type of employee: a lawyer. The company doesn’t actively do anything at all, except one thing: sue other companies for patent infringement. There’s a tremendous amount of money to be made in patent trolling, largely because the cost of litigation is so extremely high that most defendants settle for a “nuisance fee” rather than engage in a protracted lawsuit.

It works like this: A company invests a few thousand dollars to acquire a patent on a “new” technology, whether by actually prosecuting the patent itself, or by simply buying a patent that has already been issued. The company then hires a lawyer to sue all the other companies in the field that might infringe that patent. Lawyers in such cases routinely agree to take the cases on a contingency-fee basis, because the settlement values in these cases can be so incredibly high. Because the company isn’t paying the lawyer any fees, the cost of litigation is therefore extremely low. The defendants in such cases typically offer a settlement amount that begins in the tens of thousands of dollars; far more than it cost to get the patent in the first place. The patent trolling company then moves on to its next victim.

Defendants rarely engage in a defense, for two reasons. First, the cost of a patent infringement defense routinely jumps into the millions of dollars, which is far more than it costs to simply pay the patent troll to go away. Second, the risk of loss can be enormous; a few years ago, Microsoft lost a famous case against a plaintiff who was arguably a patent troll. The judgment in that case was half a billion dollars. That liability is then passed on, of course, to the consumer, who pays more for a Microsoft product these days because Microsoft needs to pay off the patent trolls who constantly nip at its heels. All large companies in the U.S. are in a similar predicament; Sony, for example, is sued for patent infringement nearly 100 times every year.

Ask a corporate general counsel what the biggest problem is facing her company these days, and she won’t say “oil prices” or “tax reform”; the answer is routinely “patent trolls”. It may not be an issue for most people, but patent trolls have the potential to become a devestating burden on the economy. At the Senate hearings on the issue back in June, one general counsel said that the cost of paying off the patent trolls was so high for his company that it was directly attributable to the layoff of 75,000 employees.

So how to fix the problem? Because most people agree that patents are vital to the economy, the tricky question is this: How do you make it possible for “good” patents to be procured, while making it extremely difficult, if not impossible, for “bad” patents and “bad” patent trolls to continue to drain the economy?

Proposed answers to that question vary, and some of the proposals — especially the ones from members of Congress themselves — are simply bad ideas. Senator Orin Hatch, for example, has proposed a definition of “prior art” that would make obtaining a patent all but impossible. Under his proposal, a patent application could be rejected if the Patent Office says, “Hey, I think I’ve seen this before”, without having any evidence to support that belief. Not only would the proposal do nothing to stop patent trolling, it would also cripple the startup industry, which is genuinely trying to invent cool new things. Senator Hatch knows about as much about patents as I do about bobsledding. But there he is, and Congress with him, trying to fix a system they know nothing about.

One very simple and effective solution to the patent troll problem has been floated before Congress several times, most recently at the June hearings, but has never been taken seriously. (My theory is that it’s so simple that Congress has effectively rejected it because it’s just too easy.) The solution is this: To obtain standing to file a lawsuit for patent infringement, the plaintiff must be actively engaged in producing or manufacturing a product. To protect the startups, the definition of “actively engaged” can include research and development costs.

Patent trolls are holding companies that do nothing except sue for patent infringement. They don’t really do anything. Under the proposal, they wouldn’t be able to sue for patent infringement, because they’re not actively engaged in making a product. Problem solved.

Lawyers reading this will rightfully point out that “solo inventors” who invent a cool new technology in their garage would also be unable to sue for patent infringement. For example, let’s take the hypothetical case of Bob v. Microsoft. If plaintiff Bob invents a cool new technology and obtains a patent on it, and defendant Microsoft later steals his technology, then Bob is shit out of luck under the proposal, because Bob is not actively engaged in making a product. Therefore, goes the argument, the proposal tramples on the little guy and is a bad proposal.

But think about this for a second. If Bob isn’t actively engaged in making a product, do we care? The patent system exists to encourage innovation, but it also exists to encourage production of useful technology. If Bob invents something, and patents it, but doesn’t pursue it, what’s the loss to the system if Bob is prohibited from suing Microsoft? I submit that the loss is zero. In fact, by prohibiting Bob from his day in court, we gain something, because Microsoft will be free to incorporate Bob’s invention into its product to the benefit of the consumer.

Moreover, if Microsoft actually steals Bob’s invention, Bob doesn’t have to rely on patent law; he can still have his day in court under a different theory, like trade secrets or misappropriation. The proposal wouldn’t trample on Bob’s rights; it would simply provide incentive for him to act quickly in licensing his technology to Microsoft. To completely alleviate this concern, an additional “grace period” could be written into the law, giving a patent owner, say, one year from the date of issuance to pursue a license, during which time Bob could have his standing to sue. That’s a little complicated for my taste, but point is this: The rights of the little guy are easily protected under the proposal.

No, it’s not as sexy as abortion or stem cells. But patent trolling is a problem, with an easy solution.

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Posted by Joe on August 20th, 2006 • Permalink

The Senate this week is debating a proposed amendment to the U.S. Constitution that would forbid any level of government in this country from defining “marriage” as anything other than between a man and a woman. The Senate may vote on the measure as early as today. There is much to say about this debate. But here, I want to focus on one tiny (and rather legal) part of the conversation. As an attorney, it pisses me off when people abuse the law to accomplish their own objectives. It turns out, that’s what that the religious right has done recently on this issue. I’d like to set the record straight.

It has been suggested by some right-wing conservatives recently that without the amendment, churches would be in danger of losing their tax-exempt status. The story goes like this: If the amendment is not adopted, then a state government would be free to allow same-sex marriage. Then, a gay married employee of a church could petition his employer, the church, to provide health insurance benefits to his spouse. The church could refuse, but might then be found by the state government to have voided its tax-exempt status by running counter to public policy.

As will be seen, that’s a pretty far-fetched scenario. The real problem with that story, however, is that it’s a blatant scare tactic by the religious right to muster support for the amendment. It is tantamount to: “vote for the amendment, or your church will go out of business”. Let me set this straight: the scare tactic story advanced by the conservatives is simply not true.

First, the law already provides for perfectly legal de jure discrimination by religious organizations. In other words, a church already has the right to hire, fire and deny insurance benefits to people it doesn’t like, and can do so based on the religious beliefs of the “victim”. For example, the Catholic Church doesn’t allow women to become priests. Have you ever wondered how that’s legal? It’s legal because the Supreme Court has basically said, “the courts are not going to interfere with the internal happenings of the church.”

A long string of cases has boldly established this concept. Good examples include Jones v. Wolf, 443 U.S. 595 (1979), and Diocese v. Milivojevich, 426 U.S. 696 (1976). It’s called the “ministerial exception”, and it essentially provides that all the progressive employment-related and equal-access laws apply everywhere except for churches. They’re just different.

A great recent example of the doctrine can be found in Tomic v. Catholic Diocese (7th Cir., Apr. 4, 2006). In that case, the 7th Circuit Court of Appeals decided the case of an organist who claimed he was wrongfully fired by a church, in violation of the Age Discrimination in Employment Act. Basically, the organist claimed that the church broke the law when they fired him. The Court didn’t even bother to hear his case. The Court effectively said, “well, you work in a church, so we’re just not going to interfere.” That’s what the ministerial exception does; it removes courts from the church.

The idea that the failure of the proposed anti-gay-marriage amendment would change any of that is completely ignorant of the law. If the amendment fails, churches will still be completely safe from court meddling. Why? Because of the ministerial exception, which already exists.

It’s worth noting that some organizations — but no churches — have experienced this effect firsthand. Some years ago, Bob Jones University (an extreme right-wing fanatical college) lost its tax-exempt status because of a college policy that outlawed interracial dating on campus. More recently, the Boy Scouts have come under attack because of their anti-gay policies. Some have suggested (rightfully so, in my opinion) that the Boy Scouts should lose its tax-exempt status.

Right-wingers have pointed to those examples in recent days as proof, they say, that the same thing could happen to churches if their hateful amendment is not passed. But you’ll notice something consistent about every example the conservatives have provided: they’re not churches. It’s as simple as this: The law doesn’t allow the government to meddle in the internal affairs of the church. A vote against the proposed amendment wouldn’t change any of that; in fact, it would be an endorsement of the status quo, which protects churches from entanglement with the law.

More importantly, in states that have already recognized some form of same-sex marriage, the churches are safe and sound. Vermont recognizes same-sex unions, and the churches there haven’t gone out of business or lost their tax-exempt status. In fact, no one in Vermont has ever proposed otherwise. Same-sex marriage and the church can co-exist, and Vermont is proof.

Which makes articles like this one so offensive. Throughout the country this week, local newspapers are running articles about how the failure of the anti-gay-marriage amendment would threaten the tax exempt status of churches. That’s the effect of the right wing media machine: To distort the truth of things and scare people into being hateful. The problem is that the articles aren’t editorials; they’re being presented as news that is based on fact. The truth, however, as you now know, is that the propaganda put forth by the conservatives is simply an abuse and gross misread of the law.

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Posted by Joe on June 6th, 2006 • Permalink

Religious groups over the last several years have been pushing teenagers to sign something called a “virginity pledge”, which is a document in which the teenager promises to refrain from premarital sex. Even some public schools have gotten on board in encouraging their students to sign the pledges. Some estimate than more than two million American teenagers have signed up for chastity.

Which makes a recent study by Harvard University fairly amusing. The study found that 52 percent of teenagers who had signed the pledge engaged in premarital sex within two years of signing. In fact, a teenager who has signed the pledge is 14 percent more likely to have premarital sex than a teenager who doesn’t sign. (If you ask me, this is the “cookie jar” conundrum, but I digress.)

In a stunning bit of scientific brilliance, the conservative think thank Concerned Women for America replied simply, “The Harvard report is wrong.”

Interestingly, there may be some truth to that. 73 percent of the teenagers who reported taking the pledge during a first survey later reported that, in addition to having sex, they had never taken the pledge. So not only are those who sign the pledge more likely to have sex; they’re also more likely to lie.

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Posted by Joe on May 9th, 2006 • Permalink

Apple’s new ads

Apple is running some truly hysterical advertisements. To see them all, click here.

My ‘Lost’ theory

What’s up with Michael killing everyone, and then shooting himself? With Libby dead, I’m not sure I want to watch… Hurley is by far the best character, and I don’t want to see him upset. In general, I have two theories on the show. Theory A is that The Others are scientists from the Dharma Project, who are actually running a psychological experiment in which they pretend to be jungle people, kind of like a ‘Lord of the Flies’ in real life, just to see what happens. Theory B is roughly similar, except that instead of objectively running the experiment, the scientists at some point began to actually believe the truth of the experiment, and are now behaving within it.

I base these theories on (a) the existence of other hatches on the island, (b) the stated purpose for one of the hatches being parapsychological theory, including group behavior, (c) the existence of jungle people costumes within the medical hatch and the clean-shaven Others in Claire’s medical hatch flashback, and (d) the clearly scientific nature of The Others, as also illustrated in Claire’s flashback. My theory explains the apparently supernatural forces on the island as a parapsychological phenomen called “remote viewing”, which is another of the stated purposes of one of the other hatches. My theory also explains why the plane crashed in the first place: it was either shot down or sabotaged by the scientists in order to get subjects for the experiment.

I don’t yet have an explanation for why The Others are so obsessed with kidnapping, although one possibility is that children are immune to the so-called plague, and the scientists need the kids to study their immunity. (One spinoff possibility here is that the scientists themselves created the plague, and must find a cure before they can return to civilization; hence their ruthlessness in pursuing a cure.) I also don’t have an explanation for who “He” is, although the head of the Dharma project seems likely.

Republicanism is the new liberalism

Republicans like to refer to themselves as conservative, and have indeed built their party ideology on the ideas of limited government, limited spending and limited taxes. A “conservative”, after all, is someone who likes to conserve and reign in the scope of the government. But does that really make sense these days? The Republicans have ballooned the federal deficit, spent hundreds of billions of dollars in pursuit of haphazard foreign policy, dramatically increased the size and scope of the federal government (e.g., unprecedented powers given to the national security agencies) and impuned civil liberty more than any other administration in U.S. history. It would seem that today’s Republican is far more liberal than even the most liberal Democrat. The best example: Bill Frist’s recent proposal to solve the energy crisis by writing every American a $100 check. There’s an ideological point here somewhere, I swear… can Democrats win the next election by portraying themselves as the party of smaller government?

The CTA is crazy

A few weeks ago I wrote about how the Chicago Transit Authority is basically awful. My biggest gripe is that the CTA spends far too much of its budget on new service lines, instead of improving the ancient infrastructure that so badly plagues its existing service. Today, the CTA provided a case in point to that theory, by continuing to charge ahead with its new “Circle Line” proposal. The Chicago Tribune article is here.

Steve Jobs is my hero

You may have already read the commencement speech delivered in 2005 at Stanford University by Apple founder Steve Jobs. If you haven’t, you need to read it now. It’s the smartest thing I’ve heard anyone say in a long time. The transcript can be found here.

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Posted by Joe on May 3rd, 2006 • Permalink

It’s a good time to be a Democrat. Not because we have any political power (we don’t) or because we have money to win elections (we don’t). Rather, it’s a good time to be a Democrat because finding jaw-dropping instances of corruption and outright rape of the American political system on the other side of the aisle is just so easy these days.

Where to begin? Let’s start with Congress. The Republican House recently passed the National Uniformity for Food Act, which is an impressive bit of legislation. The law effectively forbids states from requiring labeling of more than 200 food toxins and allergens. It actually overrides state regulations that are stricter than the more relaxed federal labeling requirements. In a bizarre coincidence, it turns out that the food industry has donated in excess of $81 million to Republican campaigns over the last six years. The most shocking part is that the Republican House actually passed the bill without a public hearing.

The House has also recently passed legislation that waives government royalties for oil drilling in the Gulf of Mexico. Keep in mind that this statute comes on the heels of the oil industry posting the largest profit margins in U.S. history. Waiving the royalties will cost the government $7 billion over the next five years. Did I mention that the drilling will occur in U.S. public waters?

It gets worse. House majority leader Tom DeLay recently “retired”, which is a polite way of conceding that his political career was destroyed when he was indicted for money laundering. Former Republican Congressman Duke Cunningham just began an eight year prison sentence on similar charges. Ohio Congressman Bob Ney and Senate majority leader Bill Frist are facing similar investigations.

That brings me to Dick Cheney. The vice president’s 2005 tax return claims $6.8 million in charitable donations. That would ordinarily make him a very nice person, except that the donations are claimed under the legislation that provides relief to victims of Hurricane Katrina. The charities to which Cheney donated his money appear not to have been affected by Katrina at all. Did I mention that he accidentaly shot someone a month ago? Did I mention that his former chief of staff, Scooter Libby, has been indicted for perjury and obstruction of justice?

But it wasn’t Scooter’s fault. He was apparently instructed by President Bush to leak the name of an undercover agent for the CIA. Why? Because her husband, a noted scholar on the middle east, was critical of the Bush administration. In retaliation, it appears that Bush decided to discredit him by destroying his wife’s career. That’s classy.

Speaking of President Bush, his approval numbers are abysmally low. He hovers at just over 40% these days, which in my opinion is still overly optimistic. As of this posting, 2,375 Americans have died in Iraq. The vast majority of those were killed after the president declared his “mission accomplished”. Yet, only 32% of Americans actually think the war is a good idea. Hmm.

Speaking of Iraq, let’s talk about Donald Rumsfeld, who has come under attack in recent days. No fewer than six highly decorated retired military officers have declared him “strategically incompetent”. Their allegation, essentially, is that Rumsfeld has no idea what he’s doing as a military leader. I suppose it’s a good thing he’s the Secretary of Defense; it would appear that he has about as much experience as former FEMA Director Michael Brown.

The most astonishing part about all this isn’t the Republicans, it’s the Democrats. You would think that in such an amazing atmosphere of corruption, those donkeys would be out there begging the American people to throw these guys out of office. Ousting Republicans should be as easy as shooting fish in a barrel. But no. The Democratic Party these days remains the party of missed opportunities, and has been largely silent on the flagrant corruption. Oh, they’re talking about it alright… to each other. But the party’s public presence remains almost invisible. No wonder these guys can’t win elections; they can’t find the microphone.

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Posted by Joe on April 19th, 2006 • Permalink

Well, it’s that time of the year again. My accountant friends have gone into hiding, and I’ve been busy this weekend preparing my god-awful tax returns. Every year around this time, I’m reminded how convoluted the Internal Revenue Code actually is. I’m also reminded of the quote by Albert Einstein: “The hardest thing in the world is to understand the income tax.”

We all have our gripes about paying taxes, even we Democrats. But I have one in particular that deserves some attention, and I actually have a proposal to fix it.

Student loans are loans that you take to pay for education. You pay interest on those loans, just like every other type of loan. They come in all shapes and sizes. Some are fixed interest, some are variable. Some have grace periods, some do not. But even the cheapest of these loans still has interest. For example, for every dollar you pay on a Stafford Loan, you’re only paying about 97 cents, because the rest of it goes to interest.

Student loans are incredibly common. Graduate loans for law school, for example, typically average around $100,000. Many people own homes that are far less expensive than that. And they’re common; nearly 98% of the students who graduate from law school will graduate with a significant amount of debt. The same is true for anyone who has (a) pursued a graduate degree, and (b) isn’t rich.

The interest on student loans adds up. Most student loans are private, and have a variable interest rate of around 10%. Government loans have much lower rates of around 3%, but only cover about half of tuition. The net result of this is that after graduation, most people will end up paying around 7% interest on their loans. When you owe $100,000 or more, like most law and medical students do, that 7% can hurt.

Since most college grads are young people, this financial handicap can be especially painful. While they’re at the beginning of their careers, and have no equity, recent grads already have a mortgage on their education, and already owe interest on the mortgage. So, in 1997, Congress decided to cut the kids a break. Since then, interest payments on student loans have been tax deductible.

With one catch. If you make more than $70,000 per year, you get no deduction. There’s an irony here, since the jobs that pay more than $70,000 are the jobs that require the advanced degrees. And the advanced degrees are the most expensive to get. As a result, the people who owe the most are the people who get to deduct nothing.

The $70,000 income cap on student loan deductions is absurdly unfair. It punishes those people who pursued advanced degrees. It effectively says, “Oh, you wanted to be a doctor, eh? Pay up.” To get the great job, you need a great degree. To get the great degree, you need to borrow lots of money. But once you get the great job, you have to pay taxes on the interest on the money you borrowed. You would have been better off not pursuing the degree in the first place. In the parlance of politics, that’s a “stick”; an incentive to not do something. In the parlance of young people, it’s just plain shitty. The folks who owe the most get penalized the most, and that just makes no sense.

I propose instead, quite simply, that the income cap on student loan deductions be eliminated. An education loan is for education, whether you make lots of money or not. And education is something we should value, whether its goal is noble or purely financial. We should not penalize people for pursuing expensive degrees.

I’m open to compromise. One option is to limit deductions to 50% of interest paid if one’s income is over the salary cap. Another option is to allow the deduction only if the education debt exceeds a certain percentage of income. There are lots of ways to do this, but they all have the same effect: To value the money spent earning an advanced degree.

Some of you will take issue with me as yet another wealthy guy complaining about paying his taxes. The argument essentially is, “Why on earth would you complain? Your income is over $70,000.” And there’s some truth to that. The answer, however, is equally simple: I pay taxes on that income. In fact, I pay more, because my higher income places me in a higher bracket. I’m not asking for the government to cut me a break on my high income tax. I’m asking only that they cut me a break on the extent to which I try to pay off my student loans.

Everyone complains about how we don’t value education in this country. Expanding student loan deductions would be a great way to start.

I want to offer one footnote here, which is more of an historical sidenote than anything else. It’s also a useful tidbit for every time you hear someone say that the Republican Party supports lower taxes. As you’ll see, it turns out that’s not true.

The original student loan tax deduction (to lower taxes) was first proposed by President Clinton in 1997. Democrats had been calling for it since the early 80’s, but the Reagan and Bush I administrations had defeated the measure. In 1997, with a Democratic president, it was finally passed over the objections of the Republican leadership. The statute was expanded in 2001, this time under the Bush II administration and a Republican-controlled House. Once again, however, the Republicans and President Bush attempted to block the measure. It would seem, after all, that Republicans are in fact not in favor of lowering taxes.

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Posted by Joe on April 16th, 2006 • Permalink
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