Ansuz

The Well-Rounded Total

I've posted some notes on the computer-science aspects of reporting rounded numbers in financial statements and hoping for the totals to add up correctly. You've doubtless seen footnotes on things that say "Totals may not add due to rounding." Can that be avoided? Here's a detailed examination of the question.

Some thoughts on the Cost Disease

The lovely and talented Scott Alexander has a posting on Cost Disease: the costs of some things, notably education and medical care especially in the USA, have increased in the last few generations to a really unfathomable extent. He gives detailed statistics, but it's typically about a factor of 10 after accounting for general inflation. Why has this happened? He gives some hypotheses, and in a followup posting shares some ideas contributed by readers, but it's not at all clear what's going on. And it seems like knowing might be valuable, because the fact of this phenomenon's occurrence (whatever the cause) is causing a great deal of misery for a whole lot of people, bearing on many other important issues.

I don't know either, but it made me think of some things.

Gas prices and the Conservative tax on everything

I've been hearing a lot of grumbling about gasoline prices recently. People who ought to know better on my social-networking friends lists circulated that asinine one-day "boycott" message a little while back. My alarm clock wakes me with CBC Radio every morning, and today they were talking to someone from Consumer's Union who was hoping to pressure the Federal government to Do Something. I'm of the opinion that the Federal government has already Done way too Much in this matter, and they ought to butt out already.

One of Harper's talking points in the recent election was to accuse the Liberals of pressing for a "tax on everything" (a scary renaming of the carbon tax that anybody who cares about survival of the planet, including a clear majority of Canadians, actually supports). But when you fill up your car's gas tank and pay today's prices for it, you are paying the Conservative tax on everything, which they implemented without a vote and which never received proper discussion or coverage. Let's put the blame where it belongs.

Disclosure: I don't own a car, and I do own units of a real-return bond index fund, which makes more profit in nominal terms when the price of everything (including gasoline) goes up. I don't think that really means I benefit from higher prices, only that I lose less than some other people. I've written about inflation-indexed bonds before. I'd rather have prices stay low and my bonds not make so many dollars.

An index for all reasons

There are probably as many reasons to save money as there are savers. One of mine is as follows: I don't want to be forced to change my lifestyle. In particular, after I'm retired and living on the savings I create today, I don't want to find myself in a situation where, because of changes in the world beyond my control that affect prices, the money I put aside to buy goods for myself during retirement is no longer enough to cover the kind of lifestyle I intended for myself, and so I'm forced to cut back. I want someone else, not me, to be accountable for cutting back to make sure I don't have to, and I'm willing to pay money up front in order to remove belt-tightening from the list of things I have to take responsibility for.

The cosmic brokers

Einstein taught us that space and time can be considered equivalent, and the Gilbreths taught us that time and money are similarly connected. Money, by definition, can be used to buy matter and energy, and those things can also be sold for money. These relationships form a sort of skeleton, technically what graph theorists call a "spanning tree", among the five elements of space, time, money, matter, and energy. The existence of a spanning tree, with the transitivity of the equivalence relation, implies a complete graph, with all vertices adjacent to each other. Each of of the Five can be exchanged for any other, and in a perfectly efficient economy, that would be the end of it all.