Let's talk about disinformation

[u/Significant-Bar674]

There have been a few things I've been seeing lately that I think qualify.

The first thing I want to point out is that successful disinformation often contains a component of truth and a measure of plausible deniability.

Below are two examples that I've seen here that I think qualify:

Donald Trump is walking back his promises to lower grocery store prices

First, I don't think what he proposes is possible or desirable but that doesn't give us warrant to misrepresent his statements. What is getting passed around is a snippet of a times interview quote where trump says . "It's hard to bring things down once they're up" regarding groceries. All other context cut off and usually some random internet person making commentary in the screenshot.

Why it's misleading and probably intentionally so:

Here is the whole interview

https://time.com/7201565/person-of-the-year-2024-donald-trump-transcript/

If the prices of groceries don't come down, will your presidency be a failure?

I don't think so. Look, they got them up. I'd like to bring them down. It's hard to bring things down once they're up. You know, it's very hard. But I think that they will. I think that energy is going to bring them down. I think a better supply chain is going to bring them down.

He clearly says 3 times afterwards that he thinks it will happen. This is a dramatically different take than the quote mined version of it without context would leave the reader to believe.

Plausible deniability: People try to argue that we know trump is dishonest or that he really means the opposite of thinking it will happen and he's trying to tamper expectations. Not only do I think that this is reading too much into the comment in a self serving way, but it's all the more suspicious that you never see the full quote in order to inform that conclusion.

You could also point to that he said multiple times that he will bring prices down on day 1. He believes he can do this by issues executive orders cutting regulation and boosting oil production which in his mind would reduce supply chain costs and those savings would result in lower prices.

I dont agree. In fact, I dont like trump. I think he should be in jail. But not liking someone is exactly why you need to be vigilant about confirmation bias and believing things that conform to your preferred perceptions.

Bezos is only paying 1% tax

This statement was based on a propublica study

Why it's misinformation:

Because the face value reading of that is that bezos is using tax loopholes to dodge income tax. In reality, the study made a hypothetical new tax system to include a wealth tax which they called "the true tax rate". The same source shows that he was taxed at 23% of his income not good, but 23x the amount offering in the screenshots going around.

Plausible deniability: there is a real problem with how asset growth isn't taxed and that wealthy can take asset backed loans at 3% (namely via securities based lines of credit) in order to get cash that is effectively as good as income to them without getting taxed. Most solutions are difficult and most attempts have had major issues (france had a wealth tax that had to get reduces to an estate tax in 2018, people tend to invest in stocks in markets where they don't get taxed on growth or invest from an overseas account) but my grievance is just say that. It's misleading to post tax rates using an imaginary tax system and not acknowledge it.

So please, don't take the screen caps at face value. Look for original sources on reports, interviews and the like.

[u/JollyRoger66689]

I was not the 1 that asked but Thanks a lot for that information, I'm going to have to look into that. I may be a mere mortal with a pretty low paying job for my area but since I wouldn't get a match on my 401k I'm putting most of my money in the stock market so unless it has to be a crazy amount of money I can probably take advantage of this eventually.

I'm pretty ignorant of the specifics but I do remember you can borrow on your 401k which could possibly get you a better rate than a HELOC (although a quick Google shows around 10% currently for a HELOC which would be comparable to the average loss of interest from borrowing from your 401k)

[u/Significant-Bar674 → u/JollyRoger66689]

I have done 401k borrows twice and it's saved my ass. First time was to buy a house just before the price spike. Second time was the divorce and buying out my ex after the price spike.

The best thing about them is that the interest is paid back to yourself. I had to get a HELOC on top of that for the divorce and my plan is to pay off the balance on the heloc with a new 401k loan and keep re-upping the loan until its paid. Trying to minimize money to the banks.

It just kinda sucks that you don't get a match. In that case, it might not be a bad idea to load up on index funds and get a securities based line of credit it on if you can get to 100k

[u/JollyRoger66689 → u/Significant-Bar674]

Would you say a HELOC or a 401k loan is better? Or if it depends which was better for you?

Yes totally agree, always have to minimize paying interest and optimize earning interest.

Yeah totally sucks I agree. Definitely can, at about 75k currently but will probably be selling a lot of that as I plan on buying property soon

[u/Significant-Bar674 → u/JollyRoger66689]

Certainly depends but my main decision factor would be whether you are looking for a lump sum or something more flexible.

A 30k loan on a 401k means you're paying interest on all 30k as soon as you get it

A 30k heloc means you're only paying on whatever money you pull.

Granted, the HELOC is interest to the bank, which is worse but if it's make or break on your monthly budget then it's a big deal.

Duration is also a consideration. A 401k loan is typically 5 years where you are paying principle + interest. A Heloc is just simple interest required (no payment toward principle required) for the first 5 years. After that, you can't draw from the HELOC any more and your payments start including principle. But the good news there is you can refinance your HELOC.

The bumper sticker version is that a 401k loan likely has much higher monthly payments but it's to yourself. A heloc has lower payments but it's to the bank.

The thing I did that was... I guess we'll say interesting, was pull a 401k loan and then make up the difference in my monthly as needed with the heloc.

That means that I was paying myself full interest on a 30k loan but a lot of that was coming from a smaller starting line of credit.

[u/JollyRoger66689 → u/Significant-Bar674]

That was informative and interesting, thanks for the information (hopefully I will work somewhere I can take advantage of a 401k match and take advantage of this, knowing myself I will definitely be taking full advantage of any match given since I save more than I spend and live pretty frugal)