When President Obama gave the State Of The Union Address at 6pm PST, I had just left the office to go eat some yummy butter chicken and garlic naan at Amber Restaurant in downtown San Francisco. I assume many other hard-working West Coasters missed the SOTU address as well. Alas, living through an East Coast centric TV schedule is something we’ve grown used to.
But as any true patriot would do, I DVRed the SOTU address, watched the one hour long speech, took notes like a good student, and spent several hours putting together this 2,000 word article to help others think about our nation’s issues.
It’s important we all know and have an opinion about the main topics our nation faces. We don’t have to all agree, but having the knowledge helps us make choices about how we want to live, what occupations we should pursue, the type of investments we should make, and how others might view Americans on a global stage. Oh, and after reading this article, I promise you’ll be able to hold your own at any stuffy cocktail party on the planet.
Knowledge is what will set us all free!
THE STATE OF THE UNION ADDRESS 2015 CHEAT SHEET
“Tonight, after a breakthrough year for America, our economy is growing and creating jobs at the fastest pace since 1999. Our unemployment rate is now lower than it was before the financial crisis. More of our kids are graduating than ever before. … In the past five years, our businesses have created more than 11 million new jobs.”
– The economy feels strong, but it doesn’t feel as strong as it did in 2007, right before the world blew up due to a cascade of mortgage defaults. The US Bureau of Labor Statistics says the US currently has an unemployment rate of 5.8% as of October 2014. But unless I’m blind, this unemployment chart clearly states we were at 4.4% on March, 2007.
“Will we accept an economy that only a few of us do spectacularly very well? Or will we commit ourselves to an economy that generates rising income and chances for everyone who makes the effort?”
– The widening wealth gap is the #1 social issue we face in America, and perhaps the world. The rich have gotten tremendously rich due to the acquisition of assets that have grown in value. But I do wonder whether income inequality really matters as much given there is much more social equality nowadays. I do hope my children and my nieces and nephews grow up where they have a level playing field to make their dreams come true.
“Tonight, since the first time since 911, our combat mission in Afghanistan is over. Six years ago, nearly 180,000 American troops served in Iraq and Afghanistan. Today, fewer than 15,000 remain.”
– War begets war. One of the biggest reasons why I don’t want to pay taxes is because I know there is a massive military budget in America (~$600-700 billion per year) to not only keep us safe, but to also kill thousands of other people. How amazing would it be to spend $700 billion on education, infrastructure, helping the poor, and diplomacy instead.
“We believed we could reduce our dependence on foreign oil and protect our planet. And today, America is number one in oil and gas. America is number one in wind power. Every three weeks, we bring online as much solar power as we did in all of 2008. And thanks to lower gas prices and higher fuel standards, the typical family this year should save $750 at the pump.”
– Bravo! It’s amazing to see oil prices plummet given it’s like an instant tax cut for consumers. If I knew oil prices would decline by 50% within 12 months, maybe I would have bought a gas guzzling Range Rover Sport HSE instead! Oil is an input cost for many finished goods, not just gasoline. We’re talking about plastics, cars, toys, and airfare prices.
“Today, thanks to a growing economy, the recovery is touching more and more lives. Wages are finally starting to rise again. We know that more small business owners plan to raise their employees’ pay than at any time since 2007.”
– As a small business owner, the red-tape is still immense, at least here in California. So many documents to file and fees to pay, it’s very hard to keep track. The government makes things complicated in order to maximize their tax collection and keep certain interest groups alive imo. If you’re never started a business, it’s hard to imagine how difficult the process is. I hope companies like LegalZoom, who make starting a business easier, do well.
“Today, we’re the only advanced country on Earth that doesn’t guarantee paid sick leave or paid maternity leave to our workers. Forty-three million workers have no paid sick leave. Forty-three million. Think about that. And that forces too many parents to make the gut-wrenching choice between a paycheck and a sick kid at home.”
– The happiest countries in the world always hail from Europe due to their generous healthcare, sick leave, maternity leave, and vacation policies. If America wants to become one of the happiest, why not just follow Europe’s lead? Sure, there are issues with motivation and production in Europe, but what’s the end game? Money or happiness? I choose happiness. I’ve seen the future, and it looks bright because America is turning into Europe as we speak.
“Since 2010, America has put more people back to work than Europe, Japan, and all advanced economies combined. Our manufacturers have added almost 800,000 new jobs. Some of our bedrock sectors, like our auto industry, are booming. But there are also millions of Americans who work in jobs that didn’t even exist ten or twenty years ago — jobs at companies like Google, and eBay, and Tesla.”
– I’m glad President Obama highlighted Google, eBay, and Tesla because they are based right here in the San Francisco Bay Area. Part of gaining wealth is going where the wealth is. Any college student or mobile person should strongly consider coming out to San Francisco. The startup community is hiring like gangbusters because tremendous amounts of money are being raised. You might have to sacrifice a little by shacking up with strange roommates for $1,000 a month. But sacrificing is what makes success feel so much sweeter! I’ve got a couple posts in the hopper that will address my journey as an independent contractor post your feedback on whether company loyalty is costing you a fortune.
“I’m sending this Congress a plan to lower the cost of community college to ZERO. Keep in mind that 40% of our college students choose community college. Whoever you are, this plan is your chance to graduate, ready for the new economy without a load of debt. Understand you’ve got to earn it. You’ve got to keep your grades up and graduate on time! … Tennessee, a state with Republican leadership, and Chicago, a city with Democratic leadership, is showing that free community college is possible.”
– The cost might be ~$60 billion a year, but boy oh boy, this could be a huge step in creating better lives for millions of Americans in the future! I truly believe education is what will set us all free. When we understand how to communicate and are armed with knowledge, we’re able to do more things we want to do. The student loan debt burden is out of control, especially when the Internet has made knowledge free. I’m curious to see who pays for the free community schools, but if it’s me, I’m all for it!
“We’re making it easier for Veterans to transfer their skills and experience into civilian jobs. To every CEO in America, if you want someone to get the job done, and done right, hire a veteran.”
– I’m proud of our government for helping Veterans get jobs when they come back home. It’s an embarrassment to see any Veteran who has fought for us to be homeless or jobless.
“And let’s close the loopholes that lead to inequality by allowing the top one percent to avoid paying taxes on their accumulated wealth. We can use that money to help more families pay for childcare and send their kids to college. We need a tax code that truly helps working Americans trying to get a leg up in the new economy, and we can achieve that together.”
There can’t be a President Obama speech without discussing taxes and the top one percent! It’s true that the top one percent earn a tremendous amount of money through long-term capital gains, which is taxed at a much lower rate than the current top one percent’s marginal federal tax rate of 39.6%. Now that I don’t make top one percent money, and am purposefully trying to keep my AGI to $250,000 or less, I totally understand why it feels good to go after one income group when you don’t have to pay more yourself! The question is: is discrimination OK just because we aren’t being discriminated against?
“And in the past year alone, about ten million uninsured Americans finally gained the security of health coverage. We can’t put the security of families at risk by taking away their health insurances.”
– Ten million more insured families is a lot, and there are tens of millions more to go. The Affordable Care Act is super contentious because it doesn’t just affect the top one percent. Based on my research regarding the subsidy amounts by income for ACA and what percentage of Americans make what, I’m estimating that roughly 20% of Americans are now called upon to subsidize singles who make under $47,000 and families of four who make under $78,000 a year.
Given I’m used to paying higher than average taxes as a lowly wage earner for 15+ years, I’m very amenable to The Affordable Care Act because at least I know my tax dollars are going to help families live or live longer! Genetics do not discriminate between the rich or poor. It is not fair that someone must suffer or die because they can’t afford to fight cancer or some random illness they never asked for. Furthermore, in a nation as rich as ours, it seems comical that we weren’t providing this health safety net, when plenty of other countries have.
The final piece of information everybody should know is that the President plans to roll back expanded tax cuts for 529 education savings plans that were enacted in 2001 for new contributions. This is somewhat of a curious move because it’s taking away a benefit mostly used by the upper middle class, even though there is no income limit to contribute pre-tax (IRS). As a result, everybody who has kids or wants kids better start contributing more now!
IS THE UNION STRONG?
Every time I listen the the State Of The Union Address, I feel like working harder. I’m reminded that Americans are amazingly fortunate to be living in a country that has so much opportunity. For example, I strongly feel that if I put in more effort in writing more helpful articles, more people will come and say hello on Financial Samurai. I don’t want to waste my chance, because chances don’t last forever.
Being able to see a correlation with effort is what anybody ever wants.
There is this nasty perception by those who have, that those who don’t have are lazy and feel entitled. I’ve spent time talking to people at the unemployment office, hanging out with fellow tennis junkies at Golden Gate Park, in the middle of the day between 2012 and 2013 when I didn’t have a job, and I can unequivocally tell you that the desire for a hand out is not there. Everybody who was down on their luck just wanted a chance to succeed. And if they got that chance, they’d try like hell never to return to the state they were in.
One of my good friends Jabir has a wife and daughter. He camped out in front of the Apple store from 10pm – 7am multiple nights a week when the iPhone 5 came out just so he could buy two and resell them each for a $100 – $200 profit. He’d then proceed to drive 10 hours for Uber for $20 an hour. Now that is hustle!
So long as our country allows anybody with enough desire to succeed, America will always be #1.
How do you feel about our union? I’d love to hear from all of you on the highlights from President’s Obama speech. Are you better off than you were six years ago? Are you hopeful about the next five years? What are some of the problems you still face?