All right, the voters have spoken. The conclusion is that we obviously like gridlock a lot. More likely, we stand divided in our national philosophy about the role of government in our lives.
In one way, I wish that the economic ship of state moved along faster than it does. But since millions of people must take their time to react to events and decide what to do about them, the dismal pseudo-science of economics takes months and often years for the effects of policy decisions to be determined. Even then there are so many factors in play, the cause-and-effect relationships are and will always be debated.
You may be familiar with the butterfly concept. It supposes that a butterfly flapping its wings somewhere in the world can begin a breeze becoming a wind becoming a hurricane or typhoon in all of its fearsome glory. Whether sound or not, I do believe that many conditions in our world are affected by very small causes.
In our recent political history, the recommendations of the Simpson-Bowles Commission seem to fit that scenario. They relied upon fairly simple changes in spending and taxation over years by only a few percentage points of relative decrease and increase respectively. We did not get into this spendaholic state just in the past four years – although it has been quite a binge – and we could perhaps change our evil ways gradually as well.
Concerning our future Social Security train wreck, I would propose one change as an example of that line of reasoning. Earlier this year, I mentioned the comment of real estate billionaire Sam Zell to the effect that each month he simply decides what charity should receive his Social Security check, in excess of $3,000. Is that the supplement that FDR had in mind?
Many of us in the baby boomer generation see the handwriting on the wall and plan to work much longer than our parents did. I absolutely love my work (to the point that it is not work as most think of it) and, Lord willing, have no plans to retire or even slow down until I might be forced to by disability, perhaps even greater senility than I exhibit now.
But currently, ready or not, you and I must begin taking our Social Security checks at age 70. For every year that we do not begin our receipts from age 62 on, our checks will increase by 8 percent. Since I have paid the maximum into the system for a number of years, my check will look like a major chip off the entitlement rock (and national debt). If I am still doing fine at age 70 but might need some income at 80 or even later, why should you all force me to take it then? Even if I died before I ever drew a penny, my dear wife could then use it since almost all of her hard work has not been rewarded in monetary earnings.
Page 2 of 2 - As a nation, we do so many wacky things like this in the name of equality or due process. I am sure that almost any of us could be locked in a room for a few days and solve these issues. It is time to lock 536 people up in Washington, D.C., and tell them if they don’t work these things out, they won’t have to worry about re-election. We will take away their pensions and deport them to the Antarctic as a science experiment!
Ron Finke is president of Stewardship Capital, a registered investment adviser. This is general advice and not meant to contain specific recommendations. Reach Finke at email@example.com.