A Note to My Congressperson

There they go again, there in the sandbox, throwing sand up in the air … at each other, and crying. A scene familiar to all parents, right? What a mess. Where’d they learn to do that? We didn’t teach them. Don’t they know someone always gets hurt?

Except this time we’re not talking about the sandbox – but about our own congress. The behavior is the same; the outcome as well. Someone always gets hurt. Everyone is so driven to protect “their interests” that they overlook the common objective: What’s good for the country, for the people.

And what are we fighting about today? The economy, the debt ceiling. The Democrats want to tax the rich and save the poor. Republicans want to protect the rich and effectively place the burden on the middle class. And what about us, those that will ultimately be affected by all of this? Well, we’re either oblivious to the whole thing, going about our lives in the belief that there’s nothing we can do about it anyway; or, we're busily choosing sides, lining up behind whichever side we think will protect our position the best … keep the most money in our own pockets.

What a mess. Someone is going to get hurt. I’ve got something to say to you … Stop it! Look across the aisle – that person, “the opposition” that you spend so much time blaming didn’t create this mess any more than you did. You both inherited it, so blaming each other isn’t the way to solve the problem. In fact, that’s how we got into this mess in the first place.

The simple fact is that, as a country, we’ve spent more money than we’ve made for a very long time. If we were an individual or a corporation, we’d be on the brink of financial ruin. We cannot let this go on, and the political haggling and finger pointing makes us look ridiculous. We’re the most powerful, most affluent country on earth, and yet we behave like those children in the sand box. I am ashamed of this behavior, saddened because it’s telling me that our form of representative government is losing its grip on reality.

Now, you are some of the smartest people on the planet … our elected officials. Yet, you act so stupid! Worse, you treat us like we are stupid. For example, in a recent media presentation (don’t get me started on the media; we’ll save that for another discussion), there was a chart that looked something like this to explain why some advocate cutting Social Security and Medicare, “entitlements” they call them. The chart is supposed to represent the fraction of the federal budget allocated to these items and I don’t know whether these figures are real or not. But I am offended by this entire discussion – and its use to persuade us to go along with your reasoning. First, Medical and Social spending should not be considered a part of the general budget because they should not be funded by general revenues. Yet they are. Why? Because the money we’ve put into these programs through payroll deductions intended solely for them has been mismanaged and mishandled, the funds comingled with general funds. Some of that is my money, given over to the federal government in trust for my retirement. If private companies treated their pension funds the way our government has handled our social security, the executives would be imprisoned. We’ve heard for years that these social programs were in trouble; bankrupt. We’ve heard that they will not likely last and that our children might not be able to expect to have them, whether they continue to contribute to them or not. I call BS on that!

Let me give you an example, my facts derived from my last Social Security Statement, and official government document. Over 45 years, I (and my employers on my behalf), contributed slightly little more than $240,000 to Social Security. When I retired at age 66 in 2010, the Social Security Administration determined that they would pay me $2200/month. Assuming that my $240,000 didn’t, and won’t, earn any interest, my money on deposit would only last until I am 74. This is one of the reasons the system is bankrupt, because the money on deposit has not been increasing in value over time. And this does not consider the fact that the money has been used as part of the general fund.

In a bank, drawing simple end-of-year interest of 2%, the cumulative value of that when I retired would have been $317,000; at 5% $520,000, which means that my money would have lasted until I was 78 or 86, respectively. Invested in a mutual fund over the same 45 years would returning an average of 10% (way low, as far as I can determine), would have been worth $1,450,000, and I could have drawn $4,000 per month until I was 96 before it was tapped out.

Why do you target “the entitlements”? Well, first of all they are easy targets. Cutting Social Security by 10% could provide $73 billion/year or so with very little administrative effort; one program, one stroke of the pen. Likewise for Medicare/Medicaid. Yet, combined these two reductions would drop spending by less than $160 Billion/year.

I think President Obama is right about one thing. There is no short-term fix for the mess our government has gotten us into. Look at the chart, below (Source: White House office of Management and Budget). Our deficit spending for fiscal 2011 alone is $1.3 trillion. Excuse me! Wrong! I call BS.

Can we fix this mess in one fell swoop? I say nay, nay. There is no one thing that can be done that will accomplish that feat. Simply balancing the budget won’t reduce the debt, and we will forever be paying a quarter of a trillion dollars in service of that debt. This is going to hurt everyone, but it’s high time we realize that the cost of saving the world is too high for us to pay alone, the impact of raising the debt ceiling and borrowing more money is catastrophic!

This entire process has underscored a number of realities for us. Even doubling personal and corporate income taxes will only balance the budget at the current level of spending. We’ve got to curb the spending, stop the bleeding. To mention but a few:

• $850 billion on military – this is NOT defense, this is an offense. We can’t afford to be the world’s protector on our own income.
• There are huge tax loopholes – incentives to farmers to “not produce”, tax breaks for oil companies generating billions in profits, the rich paying less taxes as a percentage of their income than the middle class, etc. Yet fixing them alone will have minimal impact to the deficit, that's just wrong.
• What is this “other discretionary” spending of a half-trillion dollars?
• Even us old folks – while it’s wrong to reduce the income for which we have already paid, the money doesn’t exist. It has already been squandered. I’m not saying we pay the entire bill, but as a pro-rate reduction in spending, I’m afraid we have to face the music along with the rest of the programs.

So, what is the solution. I’ve an opinion, too.

Balance the Budget. Don’t spend more than we make. Duh!

• Cut military spending by 60% 537 billion
• Cut other discretionary spending by 40% 208 billion
• Cut all mandatory spending by 10% 216 billion
• Eliminate loopholes 120 billion (est)
• Increase individual and corporate income taxes 15% 210 billion

That's a total of 1.291 trillion dollars

• Accept the fact that we won’t be able to accomplish this in one year’s time, that it might take 2-5 years to get to this point, and that will require raising the debt ceiling until we do. But once we’re back on a balanced budget, make it unconstitutional to spend more than we make and treason to propose otherwise.

Ladies and gentlemen of the congress: Your predecessors have made a muck of it. This is hard. You took the job to represent us, and unless you’re complete idiots, you knew what you were getting into when you did so. Stop bickering. Stop trying to blame the other party. Stop throwing sand at each other. Now it’s up to you to fix it. I won’t like the fact that I’m going to have to live on less income and pay more taxes, in fact, I’m going to hate it. But unless I accept the fact and learn to live with it, financial ruin for my country is inevitable in my lifetime.

Do your job … or resign.

P.S. Oh, by the way. Those pensions you get. They should be cut in proportion to Social Security. Moreover, in any given year the budget doesn’t get balanced, they should be funded at $0.00!