The Zombies Paid Off

The Zombies Paid Off

Editor Aaron GentzlerSure, we can complain about what's going on. But the folks who kept quiet and instead took advantage of the opportunity doubled their money.

Oh no... the fury has been unleashed. My apologies in advance to all who are about to be affected.

Here's the deal. My wife recently broke the screen on her cell phone. Instead of displaying the number of the person calling, it looks more like a Rorschach test -- and her psychological diagnosis is rage against the system.

According to our cell phone plan -- it's the same contract we've had for 16 years -- we're entitled to a free phone upgrade every 24 months. It was perfect timing for my wife and her newly destroyed device. Last night, she went to the nearest store (I'll withhold the name until the statute of limitations clears the guilty) to get her free phone.

But there was a problem. The phone was anything but free.

"They want me to pay $30 for the 'privilege' of renewing our contract. That's ridiculous," she said to me, using a tone normally reserved for when I spend way too much at a fly shop. "We pay them over $100 per month for the last 16 years and they want to charge me to lock into another two years. Meanwhile, they give free phones and free service to people on welfare."

Oh snap... she pulled out the zombie card.

I didn't have a rebuttal. Normally, when I hear that tone, I have a well-rehearsed comeback... something about the quality of the reel or the craftsmanship of the handmade rod.

Not this time. There is no good excuse -- not even a half-assed one.

Just like health care, education, defense and organized labor... the zombies have infiltrated the cell phone market.

I've written to you about it before. It's called the Telecommunications Act of 1996. Like so many of Washington's laws, it started out with good intentions. It was supposed to give rural Americans reliable access to 911.

But as always, the plan grew.

A free handset... free texting... free long-distance calls. Everything I pay $111.37 per month for.

All a person has to do is meet a few basic requirements. As long as they get assistance from any one of these programs... the call is free:

  • Federal public housing assistance/Section 8
  • Food stamps
  • Low Income Home Energy Assistance Program (LIHEAP)
  • Supplemental Security Income (SSI)
  • National School Lunch (free program only)
  • Temporary Assistance for Needy Families (TANF)
  • Medicaid
  • State Blind Pension.

And how much does all of this free stuff cost you and me, the saps unfortunate enough not to be poor? I sure hope my dear wife doesn't read this next line.

$4 billion each year.

Yup... that's another $4 billion that gets ripped from the living side of the economy and stuffed into the pocket of the dead.

I first wrote about the cell-phone boondoggle on March 29. This is my favorite part of that day's message:

Gary Carter is a top manager for Assurance -- the branch of Sprint Nextel (S:NYSE) benefiting from the "right" to own a cell phone.

He recently shared some deep thoughts.

"The program is about peace of mind," he said. Free cell service means "one less bill that someone has to pay, so they can pay their rent or for day care... it is a right to have peace of mind."

That's a line worth repeating... "It is a right to have a peace of mind."

If that's truly the case, I demand an attorney. My rights have been shattered, stomped on and tossed in the trash.

The bottom line, though, is this story has nothing to do with the so-called rights of American citizens. The truth is Sprint depends on its government-subsidized Assurance division to acquire over half of its new subscribers.

Without taking money from your pocket each month, Sprint would be out of business.

Welcome to America's zombie economy. Thanks to Uncle Sam, the dead walk among us.

The actionable side of all of this is where my wife and I differ. As I type, she's probably at home devising a business plan to attack the cell phone industry's wide and deep moat. Or she's building an independent communications system in our attic.

As for me... I'm the passive-aggressive type. I'll merely sit back and take advantage of the situation. After all, this zombie economy of ours is quite lucrative.

Thanks to its ability to put its hands deep inside Uncle Sam's pockets, Sprint is far from throwing a going-out-of-business sale. Here's a chart that shows the company's share price from when I first told you about the free-phone deal until today:

Sprint Chart
View larger chart

The way I see it, I've got no problem if Uncle Sam tacks on a few extra bucks to my cell phone bill each month to feed his zombies. I don't see it as a tax... it's a fee for pointing me straight to the next surefire opportunity.

We live in a manipulated economy. We can moan about it. Or we can take advantage of it.

At our house... we do both.

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