Things must really suck in Argentina

It must be really bad in Argentina, why else would Su Excelencia Señora Presidente de la Nación Argentina aka Cristina Elisabet Fernández de Kirchner have a letter published stating that Britain should give back the Falkland/Malvinas Islands, especially given that there might be untapped oil and gas reserves in the island economic zone of control and she needs that revenue stream.

The Dutch first observed it and named them (Sebald Islands), the English come along and rename them, the French start the first settlement.  The English claim the islands acting surprised that that French claim the island. (These two groups have never really played nice).  Spain acquires the French Colony (England and Spain have never really played nice).  We to tell the truth none of them have ever really played nice with each other and that continues to this very day.  The Spanish and English have an incident that ends with everyone going back to their respective corners.  Somewhere along the way an American sailing under letter of marque from a precursor of Argentina, lays claim after both the English and then the Spanish leave the island, (they both left notes saying that even though they were not there in the flesh the islands still belong to their respective governments).  Somewhere along the way the American Privateer, sailing under a letter of Marque from a precursor of Argentina lays claim to island for the precursor of Argentina, and in the process manages to piss the United States off, and the US Navy shows ups and does what any and every military forces does (lays waste to the offenders and then leaves (Not in the Nation building mode yet are we).  Captain Silas Duncan Captain of the USS Lexington declares the islands “Free from all Governments”, this is after elements under his command have ransacked the island and arrested seven senior member of the community for piracy. (They are latter release without charge).  And its history just keeps on getting more convoluted as time goes on.

Off of her reelection in October 2011, a year of losses in fights with the Argentina Judicial and Legislative branches and the IMF, the New York Bond Market, a business climate that is taking a turn for the worse as if could not get any worse, a reported inflation rate that no one believes, her popularity starting to fall, some of her most trusted advisory having to leave their positions due to corruption, why not try to direct the peoples attention away from internal concerns to external concerns, after all it worked out so well for Leopoldo Fortunato Galtieri Castelli.

It is France, and they are French

What the French Constitutional Council really ruled.

The Constitutional Council of France ruled that since the French income tax is based on the Household, and not the Individual, the proposed plan to raise the tax rate on an “Individual’s” income rather than a “Household’s” income was unconstitutional, no matter at what rate or income level.  The ruling by the French Constitutional Court was very narrow in scope and terse.  Not the broad sweeping rebuke that it is being played up in the press.

Had President Hollande and his ministers proposed changes to the French Tax code had read that “Households” with income greater than 1 Million Euro would be subject to this new rate rather than “Individuals” it would have been very interesting on what the ruling would have been.  French politics just like all politics are a weird form of Kabuki Theater.

President Hollande has the Council to blame for this set back. The narrow scope and terse ruling of the council is an attempt to deny cover to the President.  The ruling also attempts to highlight the apparent ineptness of the President and his ministers, after all they have been out of power since 1995, and President Hollande prior to his election as President only held office at the local level or as a deputy in the National Assembly, never as a Minister or even as Junior Minister, although he was party secretary.

To paraphrase Chief Inspector Captain Louis Renault “I am shocked, shocked to find that one of my trusted and able ministers could have made such an error”

Some individual speculated that he was sabotaged by members of his own party in the legislature, in that no one really know how the verbiage of the bill came to read “Individuals” versus “Households”.  But I am sure that the usual suspects are being collected at this time to determine how a blunder of this magnitude occurred, and I am sure that the appropriate innocent party or parties will be punished.

The best news for the President Hollande and the Constitutional Council is that all of this occurred between Christmas and New Years, and pretty much everyone in France has other things to occupy their time and attention (Family and Parties).  Since I do not believe in coincidence I believe that the timing of the ruling was not a coincidence for both parties.  After all everyone has to look like they are busy doing their respective jobs.

Based on the ruling it would be a simple matter for the President Hollande to have the measure corrected to insure that it applies to “Households” and have it presented for approval by the National Assembly and the Senate, and resubmitted to the Constitutional Council for a ruling as required by law.  After all his party does hold a majority in the Assembly (295 of 577) and pretty sizable block in the Senate (132 of 348).

But the deputies are a fickle lot, and have been known to be unruly, and just how beholding they are to the President Hollande is questionable who is not to say that another small slight change to text might not slip into the legislation and the cycle starts again, after all it is France.

President Hollande power is limited at this point in time to persuasion he cannot threaten their positions in the National Assembly or the French Senate.  The French Senate is even more insulated from the power of the president in that these individual are elected indirectly by grand electors who themselves are elected or appointed, he would have to wait until this summer to disband the Assembly and call for new elections, that pesky 12-month rule in the French Constitution.  There is also a probability that his party could be swept out of office just as dramatically as it was swept in to office, after all the French people will have actually seen at least a years worth of performance out of his government and the fragrance of the bloom may have faded significantly, and he has yet to deliver the miracle.

At this time President Hollande is telling his supporter on the left that he and his government tried and that they tried really hard to make the rich pay, but the French Constitutional Council stood in their way.  I suspect that the French Constitutional Council will continue to stand in his way.

The French Constitutional Council is currently made up of 12 individuals who each serve for 9 years.  At least every three years three new members get appointed (Assembly, Senate and President), plus any former Presidents may serve on the Court provided that they are out of politics (What a crock).  In the case of this court President Hollande does not have that many friends since most of the member if not all of the court were appoint by pervious National Assemblies, Senates and Presidents (and they were all right of center), and there three former Presidents of France currently setting in the Court (Sarkozy, Chirac, and d’Estaing (all right of center).  It is really great that the individual you just defeated for office gets to sit on the council that determines whether laws are constitutional or not, is this a great system or what?  Talk about sabotage.

The Constitutional Council of France is like the tail of a kite, in that it’s makeup will always be slightly out of step with the National Assembly and the current administration.  It function is to act as a brake, to force change to take place at a slower pace.  The Constitution Council of France is stacked against him, hence the ruling, and it limited scope, and tenor.

Get ready for Round 2.  The judges have rule the first round to the loyal opposition.

Although it rained late on New Years Eve in Paris, there is nothing like it (The Food, The Wine, The People) anywhere else in the world, even with the rain.

Entering the Deflationary Phase of Our Lives

It is the end of the year time to start gathering all the bits and pieces of data to start our annual tax preparation process.  Many of my friends look upon the tax preparation process as being capture by the secret police, being held in incommunicado and being questioned with techniques that Richard Cheney would approve.

I look at it as a time to compare the data to our annual plan.  Yes we actually do have a plan for our finances, technically I currently am pretty much the only one in the household who actually looks at and acts upon it.  I do present a quarter report to the family as to where we are according to the plan.  This is as exciting as dry toast, and for some just as palatable, their eyes actually do roll up into the back of their heads.  I do update the plan annually during tax time.

But in reviewing the plans of the past few years something has quietly slipped into the documents.  That something is that our expenditure on durable goods has all but disappeared, and that our expenditures for nondurable goods for at least 2/3 of our household have taken a significant downturn.  The only exception is for the last of our children who in a few years will be on his way in the world.  We have started down the slipper slope of becoming a deflationary household.  I full expect that within 8 years we will be a fully deflationary household.

Yes we still buy food, and we buy some clothing (when they wear out as opposed to out growing them), the number of gallons of gasoline that we purchase is down (I know what some of you might be thinking, this guy is anal retentive or suffers from some compulsive disorder if he tracks fuel usage on his vehicle) (fuel use is down not because of the price, but mainly because of the lack of need).  We currently live in a town that is walk able, and to tell the truth rather difficult to find places to park a car, so we walk.  Instead of buying new books at the bookstore we frequent the used bookstore.  Some of the books we keep, some we recycle back to store for others. For me there is something about reading a real book as to reading a book on the computer screen.  Call me old fashion, it is ok my son does it all of the time, but I can fix the car and he cannot.

Now for a little side trip about E-readers (If you are not interested skip to the next paragraph, otherwise just humor an old man).  What I really dislike about them is why does Amazon really need to know what books I read, how long it took me to read it, and what pages did I seem to spend the greatest amount of time on, and how many times did I look at that page.  Amazons ability to delete products off my system, for whatever reason is scary.  The device is a “Chatty Cathy” trying to gain access thru any and all networks.  I see my wife’s e-reader trying to gain access to our home network all the time (it was given to her, and not by me).   Her little device has found a neighbors network (Wide Open) to stick its vampire fangs into (it can now talk to the mother ship all the time) so it happy now and is not an issue to me anymore.

Back to the post, as I started looking at the 2013 plan I see more indications that our household will become even more deflationary.  We currently have no plans to replace automobiles, we currently have no plans to purchase any replacement electronic equipment (just had the caps replaced on my computer monitor, it’s a good monitor should last another 5 years), no purchases planned for kitchen equipment.  No plans to remodel our home.  As I look out into next year as far as our household is concern we currently do not have plans to purchase any durable goods we are in the mid life of all of our major household system, and we have found that in several cases it was cheaper to replace the compressor in the refrigerator rather than purchase a new one.  We do not eat out much, prepare most of our food, some prepared food items, but not many.  We do have a few vacation trips planned, but nothing earthshaking.

As I stated earlier we are well on our way to being deflationary; it appears that we will not be stimulating growth of the economy in any meaning full way.  The really bad news is at some point in the future it is only going to get worse as we start to draw our respective (my) social security, and (her) government retirement.  The only ray of sunshine is that I plan to wait on my social security, I do not need it at this time and it appears that the government does.

Oh Goodie

First the cliff, and now the ceiling! Sounds like something Stan Freberg would write. What is next?  Rivers turning to blood, raining frogs, Lice, Flies, Livestock dropping in the fields, Boils, Hail, Locust, Darkness, and last but not least that all time favorite death of the first-born male (you and your cow), unless you had applied lambs bloods to your door post. (Wait has that been done before?)

So what will get us first the falling off the cliff or get crushed by the ceiling?

Don’t you just love it when a plan comes together?

We have historical evidence that it took 12 Plagues to force Pharaoh to relent.

How many will it take to get the House of Representatives to relent?

In the mean time, how about a round of drinks in celebration of the 7 years of lean that we are about to embark on, as if the past 4 were not enough.

How I started the ball rolling

From time to time various individuals who I have met or word with will ask me a series of questions concerning how my wife and I got to where we are financially.  Many of these individuals confess that the task appears to be too daunting, complex and insurmountable, and as a consequence they give up before they try.

First my advice is free and unsolicited and as such it should be viewed with a critical eye.  What is in it for me is one of the first questions you should ask?  I do own the funds that are detailed in this post.  I have no other vested interest in the organization that sell and manage these funds other than I own them.  I receive no direct material gain if you choose to purchase these funds.  Instead of re telling the story, I can just point to this post.

I am describing the path that I took it is not the only path.  My path may or may not work for you, either way I hope the best for you and yours.

After making up our minds that we were going to save for our future, making up our mind was easy; the saving would be a bit more difficult.  How did I get started building our investments?

Many years ago when we started our investment program many of the tasks appeared to be difficult if not impossible, we to were lost and confused.  The first step was to start small, so we did some research and picked a portfolio to mimic.  The requirements for this first portfolio were that we had to understand it, which means that it had to be simple, that entry cost had to be low, for we did not have much in the way of disposable cash.

By taking this path realize that you are taking a somewhat passive path, which to my way of thinking is good, you should have other more pressing issue in your life to attend to, your spouse, your children, your self, your job.  That you are willing to accept the gain or loss the market via its indexes is providing, you are not trying to beat the market you are trying to be the market.  The instruments will to some extent under perform the market, due to their fee and expense structure, so therefore fees and expenses do matter.

In our case we initially selected what would eventually be called the “Couch-Potato” Portfolio published by Scott Burns, a blend of two Vanguard mutual funds Vanguard 500 Index (VFINX), and Vanguard Total Bond Fund (VBMFX) split 50/50.  Please note, that at the time we started Electronic Traded Funds (ETF’s) did not exists.  Discussion of ETF versus Mutual Funds is a subject for another day.  This is a presentation of the path that we took using the investment vehicles that were available at the time.

After a few years we decided that the next step was to build a portfolio that is 50 percent “Couch-Potato Portfolio.” and 50 percent “Margaritaville” Portfolio.   The “ Margaritaville” portfolio is a blend of three Vanguard mutual funds, Vanguard Total Stock Index (VTSMX), Vanguard Total International Stock Index (VGTSX) and Vanguard Inflation Protected Securities (VIPSX).  Within the “Margaritaville” portion of the portfolio, 34 percent is allocated to VTSMX, and 33 percent to VGTSX, and VIPSX.

Once the portfolio was now approximately 50 percent “Couch Potato” and “Margaritaville” another modification was made, and this one would be much more complicated.  This was the integration of this portfolio into the “Aronson Family Taxable” into our portfolio.  We wanted our portfolio to be 50 percent our hybrid Portfolio (50 percent “Couch Potato” and “Margaritavile” and 50 percent Aronson Family Taxable.

The Aronson Family Taxable portfolio is composed of 11 different Vanguard mutual funds.  The good news was that 3 of the funds in the Aronson were already in our hybrid portfolio, namely Vanguard 500 Index, Vanguard Total Stock Market, and Vanguard Inflation Protected Securities.  Therefore they could serve double duty count for the hybrid portion of the portfolio and count for the Aronson Family Taxable portion of the portfolio.  We need now to add positions in Vanguard Extended Market (VEXMX), Vanguard Small Cap Growth (VISGX), Vanguard Small Cap Value (VISVX), Vanguard Emerging Market Stock (VEIEX), Vanguard Pacific Stock (VPACX), Vanguard European Stock (VEURX), Vanguard High-Yield Corporate (VWEHX), and Vanguard Long-Term Treasury Investor (VUSTX).  At this point all I can say is thank God for spreadsheets.

Once parity was achieved with this new hybrid portfolio (“Couch Potato”, Margaritaville”, and Aronson Family Taxable, I thought that I was done, until I read about and did research on the Yale U Unconventional Portfolio.  This model portfolio of 6 Vanguard mutual funds performance was pretty remarkable even when compared to the Aronson Family Taxable portfolio.  The Yale U Unconventional Portfolio contained 6 Vanguard mutual funds, of which we already held position in 4.  This time we had to add Vanguard Developed Markets (VDMAX) and Vanguard REIT (VGSLX) to the mix.

Initial portfolio weighting between the respective portfolios was 17.54 percent for the “Couch” and “Margritiaville” portfolios, and 35.09 percent for the Aronson Family Taxable and Yale U Unconventional portfolios.  This results in a portfolio that is 69.65 percent Stock, and 30.35 percent Bonds.  25.94 percent of the stocks are Foreign.

I wanted a little more of the portfolio in stocks and I wanted the put more emphasis on domestic stocks.  After a little spreadsheet magic I settle on a portfolio weighting of 9.1 percent for the “Couch” and “Margaritiaville” portfolios, 36.04 percent for the Aronson Taxable, and 54.05 percent for the Yale U Unconventional.  This blended portfolio assets were now 73.06 percent in Stocks and 26.40 percent in Bonds.  22.40 percent are Foreign.  This final portfolio and its allocation is just my preference, it is my sleep point.

Somewhere along the way Vanguard had decided create different class of shares for their various funds, investors, admirals, and institutional, your basis determined which class of share you owned and purchased.  Eventually we had amassed enough value in each of the funds that they were converted from investor shares to admiral shares.  These conversions were handled as a stock-split.  It was not a taxable event to convert from investor share to admiral share.  The only difference between the shares was that the management fee are lower, depending on the fund the management fee was reduced b at least by .5 to .6.  The result is more of the earnings are returned to you, and that is a win for you.

All of this was not done overnight, it has taken 25 years to get all of the foundations built.  Now we just keep adding courses of bricks to the walls.

As our Hybrid portfolio investment goals are as follows.

VBMFX         4.50 %
VFINX            9.91 %
VTSMX          21.08 %
VGTSX           2.97 %
VIPSX             16.49 %
VEXMX         3.60 %
VISGX            1.80 %
VISVX            1.80 %
VEIEX            6.31 %
VPACX          5.41 %
VEURX          1.80 %
VWEHX         3.60 %
VUSTX           1.80 %
VDMAX        8.11 %
VGSLX           10.81 %

According to the Quicken Calculation since 1978 we have seen an IRR of 8.44 percent, which I consider to be well within acceptable limits, our money is doubling every 8.5 years.  Do I have any regrets, just three, and they deal with not having more cash on hand to take advantage of the events in 1987, 2003, and 2008, but I do not lose sleep on them.

Well there it is the path that I started on and continue on today.  Feel free to use it if you want, or do not use it is your choice.  I wrote this for my son and daughter, and a few of my friends in hopes of explaining my crazy and sometimes difficult ways that they have observed from time to time.

The ultimate end goal is to have enough investments that produce enough income to provide us a nice comfortable income in our retirement.

What is a millionaire

But what is a millionaire?  What do the various groups that are using the term (Democrats, Republicans, Liberal, Conservatives, Libertarians, Independents or any other group that you can think of) mean when they use the word?  What is the term “millionaire” a code word for?  To tell the truth I have no earthly idea at this point in time?

It used to be that when a person was a millionaire he or she current net worth (Assets – Liabilities) was equal to or exceed $1,000,000.00 Dollars.  It was not used as a term to describe someone who income (gross or net) exceeded $1,000,000.00 Dollars per calendar year.  I have no idea what one would call this individual other than possibly blessed and or extremely lucky.

So is a person who has a net worth in excess of $1,000,000.00 Dollars rich?

So is a person who has a net income in excess of $1,000,000.00 Dollars rich?

Lets take the first question.  The answer depends.

I have a cousin who is mentally handicapped he has the ability to function as someone in the third grade.  Both of his parents are now deceased.  After all was said in done the proceeds from their estate was worth slightly more than a million dollars at the time of his fathers death.  Based on various sources his most likely projected lifetime would be on the order of 26 years (the average of various life expectation tables).   We then performed calculation assuming a 4.0 percent inflation rate (computed average 3.23) and 4.0 percent net rate of return (25 year annualized return for SP-500 was 9.28), this calculation indicated that he could expend at most 35K$ per year for his assisted living arrangement and not out live his trust.  Would you classify this individual as a millionaire?  (Net Worth now is in excess of 1M$, but annual income below US Average)

Lets take the second question.  Again the answer depends.

I have another cousin (other side of the family) who is also mentally challenged he has the ability to function as a college graduate he actually graduated from college.  He has a position that has provided him and his family a 7-figure income for many years (Medical Sales will do that).  So on the surface his salary and bonus is slightly over  $1,000,000.00 Dollars (he is a very good salesman, he has almost sold me once or twice).  He lives in a very nice Mac Mansion (Not paid for), he drives a very nice high end Japanese luxury sedan (Not paid for).  He has his hobbies (not paid for).  His American Express bill some months is equal to significant percentage of Americans annual salary.  He has loved often but typically not wisely which has resulted in a cash flow hole that will end some 6 years in the future.  But at the end of the day he has a negative net worth, even with his company life insurance his creditor will still lose.  Would you classify this individual as a millionaire? (Net Worth is less than 0$, but is annual income is way above US Average)

So today what do we really mean when we say millionaire?

I think that in reality our government and individuals in our government actually uses both definitions, it just depends who is talking and what they are talking about. (They never really tell you which definition that they are using after all “In confusion there is Profit” (“Operation Petty Coat” Universal International, 1959)

The first definition (Traditional/Historical) is used when the Government is in the business of collecting estate taxes.  1M$ is a great deal of wealth transfer not to tax, whether you are a Republican or a Democrats.

The second definition (Non Traditional) is used when the Government is in the business of collecting income taxes.  Applying the current low rate to such large amount of income appears to be pure folly especially given the current fiscal situation.  Granted that the number of individuals making these high incomes is a relative few it is being made and it is being made because of the features, benefits and or accommodations of our current system of government.  It is highly unlikely that these individual would be as fortunate operating somewhere else in the world.  It should also be remembered that individuals or relatively large groups of individuals making incomes in excess of 1M$ is historically a relatively recent phenomena.

I am starting to think that more and more individuals are also using the nontraditional definition that a millionaire is an individual whose income whether earned or unearned is in excess of 1M$, but I suspect that will change if and when a relative dies and that relative has an estate in excess of 1M$ that they might share in.

To set the record straight by the traditional definition my wife and I could be classified as millionaires, we have a net worth in excess of $1,000,000.00 Dollars but at no time in our life have we ever received income in excess of $1,000,000.00 Dollars in income.

We have never met the requirements of the second definition, and I suspect that we will never will we are too old, and too slow, and quite frankly do not really need or want the hassle.  They do not pay you that kind of money because you look and smell nice, ok for a few select individual they do, but for most of us they don’t.

We both have college degrees, and we have worked for all of adult lives.  We own a modest house that is paid for (It has been our only house).  We made a concerted effort to pay off the mortgage as soon as possible (did not really care about the mortgage deduction since at best we put a dollar out the door in interest and received a deduction of at best 39 cents.  At the end of the day we were out at least 61 cents.  Pay off the house, and invest that dollar, give 25 cents to the Government and keep 75 cents, a much better deal.  One I am out 61 cents and the other I am up 75 cents.  It is a game of inches).

We own two cars, one (mine) is over 11 years old hers is 5 years old both are paid for.  It is cheaper to fix then purchase a new one.  A vehicles only real purpose is to get you from point A to point B in a safe, comfortable and most cost effective manner, nothing more nothing less.

We strive to live below our means, and yet we live comfortably.

We set about from the beginning on living on one of our salaries and saving the others salary.  We chose to live on the lesser salary and save the greater salary.  We did not get here over night.

We invested in the herds (Indexes Stock, REITs, Bonds, Foreign Markets). Our investments were diversified.  We did not nor do we actively trade.  We invested in funds with low expenses and fees.  Our expectations for our investments are modest.  We did not seek to out perform nor did we want under perform the market.  We know that we cannot beat the market.

We do not invest in things we do not understand or do not make sense.  The majority of our investments are in companies that make things that people need versus making things that people want.  Our investments are not exciting or for that matter entertaining (you want exciting and or entertaining try the movies or the circus).

We tend to our investments like a garden.  Periodically we do pull the weeds (losers) and compost them (reinvest the proceeds).  We will sell when it makes sense (High) and buy when it makes sense (Low).  Investments are for the most part spreadsheet driven it removes the emotions of the moment.  We practice the three-day rule on large purchases or sales of any investment, in other words no quick snap decisions.

We have found that the hardest thing to do concerning investing is that sometimes you must do nothing.  Do not have a clear idea of where to invest your money then let it sit in cash.

We periodically review our contribution allocations and make adjustments if the situation requires, it is not set it and forget it.  We keep enough of our investments in cash to pay our modest expenses for 12 to 18 months.

A smaller government, why not smaller congressional support staff?

According to the CNBC post

 “The truth is that both the president and House Republicans have agreed to shrink a critical part of the government to its smallest in at least half a century.”

www.cnbc.com/id/100326700

Does it not stand to reason that the Senate and House member’s staff should also shrink?

Does it not stand to reason that the White House Staff should also shrink?

As of 6 January 2011 House Resolution 22, reduced each members authorized level for 2011 and 2012 by 5 percent of the 2010 level.  2011 allowances range from $1,356,975 Dollars to $1,671,596 Dollars with an average Member’s Representational Allowance of $1,446,009 Dollars.  This according to the Congressional Research Service document found at the following link

library.clerk.house.gov/reference-files/112_20120104_Salary.pdf

Well it time for another House Resolution to fund the Member’s Representational Allowance.  It was nice that they took a 5 percent hit off of the 2010 allowance levels.  The question now is what about 2013 and 2014 Members Representational Allowance?  Are we the people only going to get a token reduction, or will congress step up show some leadership reduce their spending on their own offices and staffs?

The distinguished members of the Congress of the United States should step up and take one for the team cut your staff positions, not one of the lower paid slots, no fish bone the salaries, and pick a salary that will make a statement, that you care.

I know it is hard to come to plate, and then crowd the plate, know that the pitcher is going to throw the heater at you, and you have to step into the pitch, it will hurt but you will get on base and after all you know you cannot score unless you are on base.

I am sure that like most business, your largest expense item in your Members Representational Allowance is personnel, people are not cheap, and good people are really not cheap.  At the present time you are limited in the number of individual you may hire full time and part time (There is just so much of God’s work that must be done, what was leadership thinking when they came up with this).  Additional limits have been placed on the maximum salary that you may pay individual staff members (Good people are really expensive). Finally your Official Office Expenses are capped (do these people not know how expensive office supplies and equipment are?).

It is tough being a member of the United States Congress, and it just keeps getting harder in that you must stand for re election every two years (What were the founding fathers thinking), especially now given that you must start your campaign for your next term no sooner than you were elected to the current term (24 hour news cycle is a bitch).  To make matter worse the voters actually expect you to do something legislatively (What were they thinking, or were they even thinking?)

I know reducing your Members Representational Allowance, by any significant percentage (25-45 percent) would not significantly change the current deficit picture, the few hundred Million dollars of savings would hardly change the current very deficit number.  But a mighty Oak grows from an acorn, and a start is a start.  One must begin the journey somewhere.

I know that a 25 to 45 percent reduction in the Members Representational Allowance would put a great many good people out of work, but good people typically do not have a problem finding a new job, or at least that is what you are told.  If these individual are not fortunate to find a new position, well there is always unemployment insurance (Or did we gut that fish), anyway if they are unemployment it is certainly cheaper for the United States, unemployment payment is considerable less then their current salaries, and after all it all comes out of the same pot, and you still have your position (That a good thing, right?) and you will have reduced United States government expenditures, and made government smaller (I am sure that these two items were central to re election campaign).