An Open Letter, To President Trump
Congratulations! You have survived one of the most brutal and bizarre election campaigns in American history and will soon take on the awesome responsibility of being our President. Your mind is doubtlessly occupied with the many actions you must take, the powerful options at your command, and the difficult choices that await. As you ponder all this, we humbly ask you to consider the following friendly advice….
You are clearly aware that an unusually large number of Americans think poorly of you and consider you unqualified for the office you’re about to assume. In fairness, they are probably both angry and frightened about their own futures, and the future of our nation. Despite their misgivings, remember that you are their President, too.
So please make a special effort to reach out to them. They may not be in the mood to hear it, but keep reaching out anyway. It is important to heal America's deep rift — because we can only address our substantial problems with cooperation and a sense of shared purpose.
And while we are an outstanding nation in many ways, we do have serious economic issues that must be addressed head-on, and not simply passed down to future generations. Here are just a few:
Insufficient Retirement Funds – Retirees are facing retirement funding problems on multiple fronts. Social Security is projected to run deficits beginning in 2020. If corrective action is not taken, by 2035, there will only be enough income from payroll taxes to cover 75% of promised beneficiary payments. State and local pension plans are only 75% funded.
Meanwhile, too many Americans simply are not saving enough on their own for retirement. According to a recent survey, nearly one-third of Americans have less than $1,000 in savings.
Many Americans will be retiring over the next few years only to discover that their nest eggs do not allow the type of retirement that they envisioned. So you must take steps to insure the solvency of Social Security and promote policies that encourage greater retirement savings. You can also help retirees with their typical greatest expense by addressing...
Medical Costs – Whether you want to fix Obamacare or blow it up and start over, all sides agree on one thing — as is, the system will be difficult, if not impossible, to sustain. Obamacare has sharply reduced the number of uninsured Americans but also tilted risk factors against insurance companies, resulting in dwindling choices and sharply rising premiums, as various plans become economically impractical or disappear entirely. How can you retain the gains within an economically sustainable model? Further, how do you address rising pharmaceutical costs without collapsing the pharmaceutical market?
You have a great task ahead in not only creating solid health care policies, but also in getting those policies enacted against the myriad of special interest groups and partisan wrangling. It will take all of the diplomatic and political skills you possess to navigate this minefield; Obamacare may seem like a pillow fight by comparison. Rise to the challenge, and history will look kindly on your efforts — even though, in the short-term, your colleagues may not.
Fairly and effectively distributing the burden of medical costs is one of the many factors you must face in tackling...
Growth and Inequality – Growth has been increasing tilted toward wealthier households – between 2000 and 2011, the net worth (defined as all assets minus all debts) of the majority of US households actually fell while wealthier households saw their net income rise. As of 2012, the oft-referenced top 1% of households held over 40% of America's net wealth — a percentage not seen since the 1930's.
How do we help the less fortunate in society without perpetuating a cycle of dependence? Adjusting the tax structure to address inequality will require a delicate balance to keep from stifling growth while directing some of the benefits of growth to where it is most needed.
We can't guarantee equality of economic outcome as a nation, but we must strive to reach equality of opportunity. In order to do that, you will need to focus on...
Jobs and Wages – While we have experienced a record run of job growth, the wages that too many of these jobs provide are not sufficient to meet the needs of today's families. The American economy is approximately 70% driven by consumer spending, and demand is simply not going to recover strongly if too many people are simply unable to afford items beyond the basics — especially if they are expected to save properly for their retirement as well as pay for their children's education.
This lackluster wage growth may require you to embark on a two-fold solution: introducing new technologies and opportunities that produce well-paying jobs, along with more targeted yet affordable education to match skills with workplace needs. Of course, that necessary education comes at an increasingly high price, which leads us to...
Personal Debt – Outstanding student loan debt is closing in on $1.4 trillion dollars, with an average debt per borrower of $28,400 as of July 2016. On top of that, collective consumer debt is just below $3.67 trillion.
Debt is dragging down the recovery of the housing market. The combined consumer and student loan debt have left too many young Americans unable to afford to buy a house despite record-low interest rates. Interest rates are almost certain to rise soon, closing a window of opportunity. Meanwhile, many Americans who do own homes face an unpleasant surprise as their pre-recession home-equity loans (HELOCs) are about to reset into full payment phase, adding to cash-flow concerns.
Debt is not inherently bad, but the huge collective debts and the rates of increase are sending increasing numbers of Americans toward a dangerous debt spiral and aggravating the economic inequalities noted above.
For Americans to simultaneously spur the economy, pay down massive debt, and save for retirement, we must have economic growth that balances higher wages with inflationary pressures. That is a difficult needle to thread. Use your position to establish a visionary path that brings back growth and wages without encouraging poor spending habits that will re-impose economic burdens in the future. The same arguments also apply to our...
National Debt – Our collective national debt is in just as dire straits as our personal debt. As it is, our national debt is a staggering $19.8 trillion — over $61,000 for every man, woman and child in America today. Our debt has been essentially at or over 100% of GDP since 2012. The debt spiral mechanism applies to nations just as it does to individuals, and we are creeping ever closer to that point as a nation.
We must seek not only balanced budgets, but also a return to budget surpluses over time. That takes both economic growth and prudent spending — continuing to invest in our national infrastructure, but getting a solid return for our invested dollars. With interest rates low, you could borrow to put Americans to work improving our crumbling infrastructure, but that would add to our debt levels. Please don't take the easy way out and apply short-term solutions at the expense of our children and grandchildren.
In closing: good luck, Mr. President. You have a tough road ahead, but the country is counting on you. Be the excellent leader that America needs, and prove the naysayers wrong. We wish you well, whether or not we voted for you.