For the optimists among you, I present the following work, which aggressively outlines a compromise-based politics approach for the United States of America:
Take a look and let me know what you think!
Category: Federal Government
The Truth About Congressional Pensions
“Congressmen serve just one term and get their full salary for LIFE!”
Any denizen of the internet dot com has surely seen a claim of this nature, or perhaps even received one of those chain emails ranting about the travesty of our political system. The idea is so widespread that most people refuse to question it. Even people running for Congress, such as this “decolonized madre,” accept the notion at face value:
Sema sounds like a great human organism, but she’s woefully incorrect, just like everyone who spits this talking point without so much as a fact check. In reality, congressional pensions are not nearly as lavish as people claim, and certainly fall short of the quote’s mark.
Most existing members of Congress are party to the FERS system, a modified version of the earlier CSRS model which was phased out in 1984. Under this program, participants enjoy access to a tripartite system which includes a small pension, a 401k with matching, and Social Security. The highest percentage of their total salary ($174,000) for a pension is about 34 percent, and the average FERS pension in 2014 was $42,048. That’s decent, but nothing close to “full salary for life.”
The 80 percent idea holds some water, but data available suggests it only kicks in after 32 years of service. To put things in perspective, former representative Howard Coble of North Carolina retired in 2015 after thirty years of service. His pension would have been $130,500, but he turned it down. Nothing miserable about such a figure, but it took three decades to accrue, not a single, two-year term.
As for the one-term pension argument, let us keep in mind that a person must serve five years to even be eligible for a federal pension. In the case of former senator Kay Hagan, she served one six-year Senate term and was in line for a whopping $16,000 annual pension. That amount is certainly not chickenfeed to the working class, but hardly an extravagant offering.
I admit to disliking Congress more than the next person, yet that doesn’t excuse blatant ignorance. Do a Google search and find the facts, not a popular opinion.
Our Man In D.C.
I tend to deliver a lot of realist commentary, which can come off at times as “black pill” or “depressing” to different people. While I disagree with the characterization, from time to time we encounter brilliant rays of hope to uplift the broader gloom of the time. In this case, the glimmer comes in the form of Mark “The Rejector” Calabria.
Mr. Calabria is the director of the Federal Housing Finance Agency, and the strongest line of defense against further corporate rescues by the federal government. Just to place it in perspective, Fannie Mae and Freddie Mac already have their hands in over half of the $11 trillion mortgage market, and advocates are clamoring for a lot more.
No dice for them so far. Calabria has continued to block their hopes, and even suggested he would have not permitted the 2008 rescues which handed cash to select industry failures. Imagine that.
It remains to be seen how long he can hold out before someone higher up (read: McPelosi) overrides the move and dishes out money, but for now the horizon is splendid.
Here’s hoping for more Calabrianism.
The SBA’s Dramatic Failure
For all the desperate hand-wringing about the need for Congress the pass SOMETHING, the outcomes are usually pretty poor. Several weeks ago our federal legislatures enacted the CARES Act, a $2 trillion juggernaut meant to prop up the flailing economy. In its assorted blubber they inserted the Economic Injury Disaster Loan program, designed to provide up to $2 million in working capital for small businesses.
Thus far, it’s not working too well. Instead of that magic number, firms are being promised closer to 25-35k, with strains making the current disbursement around 15k, at least for the time being.
It’s truly remarkable. The government capable of mass printing and borrowing to fund gigantic programs and nation-building wars is bumbling where the fate of its own business owners are concerned. The Small Business “Administration” has been swamped by requests in a heartbeat, despite having over 3,000 employees and a budget of $710 million.
Is the solution an increase in their budget, which Trump has already attempted as recently as February? Perhaps an even larger stimulus is needed, because money appears to be the magic solution for every problem Congress faces.
Or, we could structure programs in a manner that makes sense, and not demand an archaic application process which many cash-based companies will inevitably struggle to complete.
Just a suggestion.
Why A Balanced Budget May Not Work
Ever since at least the 1990s, conservative Americans have been fixated on the importance of a constitutional amendment to ensure federal revenues do not fall short of expenditures. The idea picked up a lot of steam during the rise of the Tea Party movement in 2010, and now some Democrats are even advocating for such a reform.
At its base, the notion is attractive. By placing legal limits on spending, we might prevent the runaway inflation and financial ruin likely to be foisted upon ours or future generations. In his book The Liberty Amendments, Mark Levin expanded the concept by suggesting a cap on the size of government spending at 17.5 percent of GDP, and a mandatory 5 percent cut in overall spending if Congress fails to adopt a budget.
This all sounds great, but several problems remain. First off, most plans include exceptions for emergencies and times of war. The obvious fail point would be politicians declaring a health crisis like coronavirus to be indefinite, or using the so-called “War On Terror” as justification to spend without limit.
An equally significant issue is the risk of “off-the-books budgeting,” which has been practiced for years by government officials. In Nazi Germany, it was employed to get around the Versailles Treaty restrictions concerning maximum outlays on military buildup projects. During the years leading up to the 2008 financial crisis, the Greek government acted with related malevolence, only in their case it was to complete corrupt real estate deals and hide inflated salaries that violated EU standards.
Believe it or not, America is hardly free of these unethical strategies. The Central Intelligence Agency has been allowed to evade federal budgetary restrictions for decades, and a recent audit of the DOD revealed the agency is incapable of accounting for billions – if not trillions—of taxpayer money spent on a variety of projects.
The upshot is that while a balanced budget amendment might improve the nation’s solvency on paper, it fails to prevent the eternal scheming of the political class to bankrupt our treasury in pursuit of their own interests.
Politicians Are Never “Ready”
Governor Andrew Cuomo of New York was just quoted saying his state is “not yet ready” for the anticipated coronavirus peak over the next week.
Newsflash: politicians are never prepared. Maybe it says something about the nature of government, although one would think “use or lose” federal budgetary strategies make an increased medical stockpile quite sensible. Instead, they whiz the money away on nothing and then claim there is a massive equipment crisis when things go bad.
The bigger issue is this: no one gets rewarded politically for thinking ahead. Humans have been trained to expect a state-sanctioned RESPONSE, something to calm their nerves and fill the headlines. Thus being the dutiful worker ant doesn’t help where attentions are concerned.
Suppose Trump and Co. had 600 million reusable facemasks in storage, a containment plan ready to go, and “a hospital ship for every diversity region.” Would the media cheer? Might we count on Democrats to clap their hands? Probably not, because the issue itself would be less threatening. The politician is only paid election-wise for effectively putting on a show, not demonstrating foresight. If Trump’s reaction looks good, he will benefit, but otherwise his opponents win. Simple as that.
For all these reasons, individuals need to prepare. The government can do marvelous things, but it rarely thinks out of the box, or even about the future.
ECONOMIC COMMANDER 