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The Unseasonably High Cost Of Living.

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After listening to our President's final press conference ahead of the holidays, I was left a little deflated. Sure, there was the very festive question asking him what his New Year's resolution would be; but most of it was mundane and dismal. I was less impressed by the questions from the press corps, than the somewhat repetitive answers they received.

The President started the press conference with a short overview of recent events. He touched on the budget deal, gun control, the affordable care act, immigration reform, Iranian Sanctions, the defense bill, our troops serving abroad and unemployment insurance running out for 1.3 million Americans. I felt that he covered a lot of ground on a range of important topics. It was for this reason I was disappointed that the majority of questions coming from the press could be split into just two categories;

"Your poll numbers are really low, what do you think about that?"

and the Snowden , NSA, privacy group of questions which uncovered nothing new. I started to wonder if they listened to the answers that their fellow reporters had elicited. As this continued, I realized that this was in fact the point. Each reporter got their shot and tried to get the President to say something radically different by phrasing the question ever so slightly differently. It resulted in, what I saw as, a completely wasted opportunity.

There was a lot to be thankful for. Not too very long ago we were in the midst of another government shutdown. The most recent budget deal has helped to take that off the table in the near future. Millions of government employees know that they will at least have a job to go to. Christmas and the New Year are looking a little more secure for many. The Defense Bill provides a level of security for military personnel, guaranteeing the most basic benefits that we had already promised them. For those people who are putting their lives at risk to protect us, we were at least able to accomplish the bare minimum. So a special thanks to them for what they do, and for putting up with all the nonsense.

The Affordable Care Act is going into effect and perhaps the New Year looks a little better for some because of it. They will actually feel an economic benefit next year, even if it is not in time for Christmas. There are also those who will just have a greater peace of mind and that has to be worth something too.

The loss of unemployment benefits for 1.3 million Americans just after Christmas is perhaps the saddest aspect of the Holiday Season. These are fathers and mothers who had been working until recently. Families that will struggle to make it till the end of the year. Many of them will be desperately waiting to file their tax return. At this point they are owed money due to the change in their circumstance. They have overpaid in the early part of the year, because they expected to keep working. The government shutdown, has delayed any hope they had of filing early. They have at least an extra month of waiting, then send in the family return and wait again to get paid. I am sure some of them will be able to get a little help from friends and family. I am also sure many of them will not get help from anyone.

Unemployment benefits are taxable income. For a majority of people that would have received an extension; the extension would only have reduced the amount of money the government owes them. This is why I feel the Republicans dealt this group a double whammy this Christmas. They absolutely would not put the extension in any budget deal and the shutdown delayed any chance of them getting any money owed to them promptly. I hope the party is proud of what they have accomplished.

Unemployment benefits are a form of insurance. Similar to Social Security and Medicare, that helps to provide for our seniors upon retirement. Those programs provide benefits which are paid for by a lifetime of contributions. These 1.3 million Americans paid their insurance premiums while they were working. Up until now it has just been the money they were owed, by that policy, which they have received. The extension would only have been a loan against the other monies they are owed, until such time as the government sees fit to give them their refund. The Republicans essentially said,

"How dare you ask for the money we owe you!"

Instead of doing the simple thing the Republicans have chosen the most expensive route. The big budget battle designed to cut government spending has in fact cost more. Left with no other alternative, these families will end up on another government program, TANF. Although they were already receiving food stamps, the amount of food stamps they receive now will be greater. Due to the timing of this any benefits paid will not happen until January, therefore not included in this year's tax return. They have also ensured that 1.3 million Americans will be completely dependent on the ACA for health insurance.

When you add to this the cost of all the extra appointments needed to switch them from one program to the other. The additional man-hours and paperwork involved in accomplishing the switch. The additional man-hours required to enforce the jobs requirement portion of TANF. It starts to look like an expensive proposition. In fact, it would seem that the Republicans were in favor of making these people more dependent on the state. In favor of sustaining a larger government more actively involved in peoples' lives. Who knew?

Reducing benefits for these people also has a negative effect on their ability to find work. It leaves less money for a haircut, none for a decent set of clothes. It makes it hard to look presentable at interview. No money for day care or for transportation to the interview. The economy may be improving, with a few more jobs becoming available. We would all agree that we wish there were more jobs being created but it is a start. There is a light at the end of the tunnel for those looking for work. It just seems counter intuitive to take away their flashlight, or choose not to give them new batteries now theirs are running low.

I have heard this described as a lump of coal for Christmas. I am not sure it is even that generous as many of these families could use an extra lump of coal to heat their homes this winter.

On a side note, I did hear that the President had commuted the sentence of eight prisoners. These eight were serving mandatory minimum sentences that Congress has since decided were unfair. The legislation Congress enacted was not retroactive and so many thousands of people as still serving sentences they could not receive today. I will not argue about whether or not this was a good idea. I just want to point out that, these eight people will be released in April. Your sentence has been commuted now, so we will let you go in four months time. Had I been sitting in the last Whitehouse press conference before Christmas; I may have asked, "After 20 years, was it really too hard to get them home in time for Christmas?"

There appears to be a little too much humbug this year,

We would welcome just a little more cheer.

Happy Holidays,

PapaofFour

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Additional disclosure: Just a few thoughts for the Holiday season.

Stocks: DIA, SPY, GLD