What The New President and Congress Need To Address

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On Sunday’s CBS 60 Minutes, they reported that 82% of likely voters are more disgusted than excited for the election.  Regardless of your politics, neither candidate gets high marks for trustworthiness and there is a lack of confidence that the country is heading in the right direction.

On this day before Election Day, I thought I would comment on the four key things that will be very important for early retirees in the future and I would like the new President and Congress to focus on:

  • Government Debt – Despite general strength in the dollar and very low inflation, I worry that with $20T in federal debt, our currency is vulnerable when the rest of the world begins to strengthen.  Continued government debt leads to inflation and since part of our retirement nest egg is a fixed pension, inflation will have a dramatic impact on its value. Fully 49 of the 50 states have a balanced-budget requirement that I would love to see adopted on a federal level. 
  • Social Security / Medicare Entitlements – If you worry about where the federal debt stands today ($20T), what are we going to do to pay the promises we’ve made to senior citizens in the future?  Looking at federal spending, Ezra Klein from the Washington Post commented that our government could be described as “An insurance company with an Army”.  In fact, SSA and Medicare spending is already 2.5x what we spend on the military.  The two programs are expected to drive us an additional $40T in debt over the next 30 years unless the programs get a major overhaul.
  • Affordable Care Act – ObamaCare has been great for early retirees in providing guaranteed coverage, but the economics of how it has been structured is an absolute mess.  I wrote about our experience in this post recently, and we are getting close to committing to our plan for 2017.  It looks like we will pay +38% more and have our deductible double to $13K.  Additionally, the federal cost for the program has ballooned from Obama’s original estimate of $0.9T to $2.6T.  We’re fortunate enough to be able to cover the exorbitant increase, but many people are being incredibly squeezed.
  • Income Tax Reform – Our federal tax code is needlessly complicated.  Printed out, they say it is over 1,000 pages and has thousands of breaks and penalties for seemingly every person and special interest.  While I wish they would look at a simple national sales tax to encourage savings, at the minimum I would like the new President and Congress to reform the income tax code and eliminate all the loopholes and complexity that pick winners and losers in our society.  In fact, I would love to see a discussion behind a flat tax – back to Steve Forbes’ call for a 1040 form that would fit on a postcard.

Unfortunately, throughout the campaign season, neither of the major party candidates seemed prepared to address these issues in any significant way.  Our political system seems to almost guarantee slow change in Washington DC, except when major issues flare up and voters demand action.  Please comment on what issues you would like to see the new President and Congress focus on that are important to early retirees?

Image Credit: Washington Post “What if a typical family spent like the federal government? It’d be a very weird family.”

9 thoughts on “What The New President and Congress Need To Address

  1. Very thoughtful post. Too bad our elected officials aren’t so thoughtful. I very much enjoyed (although I’m not sure that’s the right word) the 60 Minutes piece. I fear we may be too far entrenched behind our individual ideologies to fix things and thrive as a country.

    Liked by 1 person

    • Thanks – Yes, I think that promises of significant action in these four areas would likely not get a candidate elected. That said,
      Let’s hope they put some focus on these things over the next couple years.

      Liked by 1 person

  2. Thanks for your thoughts–I agree with many of them. The national debt seems almost mythical–the amount is astronomical, and no one seems to have a solid plan for dealing with it. I agree that this is an area that needs more thoughtful attention.

    Student loan debt is also a problem. It is seriously delaying retirement savings, and affects the economy. And the cost of college is a concern for early retirees who want to help their kids with college costs. I don’t think college should be free, but we need to protect teenagers from being pressured into loans they do not truly understand the weight of, and sometimes when they aren’t really ready for college yet.

    Liked by 1 person

    • Yes – college loans would be a good 5th thing for the new President & Congress to address. The amount of student loans given out has shot up in recent years. I think these easy loans just encourage universities to up tuition costs and fees. These costs have WAY outpaced inflation and campuses are sporting amazing amenities.

      Like

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  4. I’d love to see these changes as well! It looks like the Gop will have a chance to do so given they now control Washington. Hopefully significant changes can be made to SS, Medicare, and the ACA! We’ll see…

    Liked by 1 person

    • Regardless of your politics, having one party in control of Washington DC will certainly allowed change to be made. I am hoping for the better…

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