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'What To Do' List

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for families, individuals, students and elected officials
facing economic challenges in the 21st century, domestically and globally
by Michael Hodges (email)

NOTE: to save time, the reader may wish to jump to the To-Do List below, after which please read the introduction and the 'Summary Message.'

Then make your own To-Do list.


INTRODUCTION

The Grandfather Economic Report series reviews economic trends facing families and youth, compared to prior generations - and, provides the findings to others in an easy-to-understand presentation with pictures - to enhance individual knowledge.

Although individuals may feel powerless to reverse, on a national basis, the many negative trends shown in this report series we must not allow ourselves to become discouraged or pessimistic, because individuals can take individual actions to counter the influence of national trends on their own lives. Many visitors to this series, after reading individual data chapters, have requested an easy-to-understand 'what to do list'.

Included below is a list of suggested items which you can use as starter ideas to help build your own 'to do list.' Many will draw different conclusions as to what personally they should do with the hard data presented in these reports. The following to-do-list would be taken out of context if the reader has not first absorbed each chapter of the Grandfather Economic Report series, and other similar reports based on hard data

The author of the Grandfather Economic Reports has formed a core belief that a nation is best served with small, debt-free government - where combined federal and state & local government spending do not exceed 15% of the economy's national income (compared to today's 42% share) - and a large free-market private sector (85% share), with each individual responsible for his or her own welfare (not dependent on transfers from or regulation of others). Additionally, the medium of exchange, the dollar, should be a measurable store of domestic and international value over long periods of time with no depreciation of its buying power due to inflation or exchange rate devaluation. It is a further belief that a nation of individuals with low individual debt, high savings and exceptional education quality is safer economically than otherwise.

From studying the Federalist Papers and other historic documents, it is my belief such was also the intent of our nation's founding fathers. We have strayed far astray from their principles. After decades of a consumptive wasting of resources, with little to show for it except mountains of government and private sector debt, both domestically and internationally, and with failing social security, Medicare, welfare and education systems, we are in the beginning of an unprecedented challenge for future living standards world-wide - more than ever. We must, for the first time, economically compete with large sections of the world (China, Russia, eastern Europe, South America, India, and many Asian nations) which start-out with lower living standards than ours but are taking unprecedented actions toward upside economic potential for their citizens, part of which may be at the expense of those here at home that are the least prepared. There will be new winners and new losers.

It is my view that the more who utilize good data and data trends to help form their view of a given serious subject, the more winners - - especially compared to the many in ostrich-mode and the many forming views without a base of clean data. The objective of this Grandfather Economic Report series is to provide some of that data in an easy-to-understand format - - and thereby provoke deeper thought, based on data. If you read most chapters I hope you find that 'trip' useful.


A SUMMARY MESSAGE

Families should not wait for government bureaucrats & politicians to 'save them' or 'set it right again' - they must take their own individual responsibility to develop actions to reduce their own consumption and invest more of their own productive time in high-quality education and savings, while maximizing their own assets free & clear of any debt. In other words, families must face the reality of certain national trends - - or suffer consequences.

> Make Your Own To-Do List - - and act accordingly <


TO-DO PRESCRIPTION LIST

THIS LIST IS TO HELP YOU BECOME ONE OF THE WINNERS.
Families & individuals - - youth & students - - government officials

Here's the first draft of my 'to-do prescription' list.
Just as with an important medical opinion, you are encouraged to get 2nd and 3rd opinions as you develop your own To-Do List. After you have read each chapter in the Grandfather Economic Report series, and the following list, you are encouraged to develop your own to-do-list - according to your own belief. If you care to share your list with the author, that would be informative. If you would like to criticize my list, that's fine. I'm not a financial advisor. I provide these suggestions for you to consider, to help get you started. But, please have your own list and put it in writing to yourself and with your spouse - and, base it only on hard supporting data evidence - not on rhetoric of others who do not provide clean data.


darts.gif (1727 bytes)FOR FAMILIES and SINGLE ADULTS

A Goal to consider: debt free except home and (perhaps) real estate investments, highest quality education for children with parents making choice from own funds, and building own savings & retirement funds - with principal residence free & clear by age 45.

  1. Eliminate all consumer debt and automobile leases, including any financed via home equity loans. (Note: 30 percent of all credit card holders no longer carry a monthly balance, leaving the remaining 70 percent responsible for all credit card interest. Which group do you want to be in?) [to better understand debt and debt trends, read all pages of America's Total Debt Report, especially the part about household debt.]
  2. Develop savings plan of 25% of your annual gross income, excluding home equity, and develop a plan for investment of these savings for your retirement. If both husband and wife are working, consider living on one salary and saving 100% of the second. When it comes to thinking about what I should do about my savings, rely less on others - - depend on yourself and become your own financial advisor by reading investment books and attending lectures - - no one cares more about your savings than you do (many have suffered huge losses by over-relying on say a stock broker - - those are your precious savings and you must 100% understand and agree how they are invested and protected - - if you don't know what to do then play it safe with FDIC-insured CDs until you do understand risk vs. reward of other forms). As you may know, private savings in America are nearly nil. You should stand tall, way above that crowd. (read about savings trends and an easy to understand graphic)
  3. Make a plan to achieve a debt-free home as soon as possible - - say by age 45. Note: 38% of homeowners have no mortgage debt, leaving the rest to pay all mortgages - - guess whose homes are more at risk. Would you prefer to be in the free and clear group, or in the debtor group? One way is to steadily increase your monthly mortgage payments faster than required by the lender - and, never borrow on your home equity for anything other than perhaps adding a wing to your house that is guaranteed to increase its value - - but consider never borrowing your equity to support consumption items like a new roof, a pool, a car, a vacation, paying down credit card debt, to buy stocks, etc.).
  4. Understand the challenge children and to family income where both parents work. (read all pages of the Family Income Report).
  5. Educate children only in schools that can independently demonstrate at least 5-years of good measurable achievement levels that equal or exceed national and international math & science result. Recognize the challenge of expecting world-class quality education from a monopoly system. (be sure to read ALL sections of the Education Report to better understand this challenge, and consider homeschooling so one parent can become a more effective, full-time parent).
  6. Develop an attitude of depending on yourself, and therefore avoid working for government entities, and maximize self-employment where possible or at least plan your career to gain the necessary practical knowledge to become your own boss one day.
  7. Adults should continue their education, each year, according to a plan that includes economics (with accounting and investment).
  8. Make all possible efforts to have a husband/wife family and to organize cost of living and size of ones house based on the income of but one family member , NOT TWO. If both are working then try to save all net income of one and live on the income of the other.
  9. Have one responsible parent at home until children graduate from high school, and become involved in their schools so you really know what is going on regarding course rigor compared to standards (see #3) and how your child is performing.
  10. Do not take on any debt other than for education of children and/or for hard assets (such as residence or investment properties), with plan to amortize debt quickly.
  11. Vote in all elections for candidates that have clearly demonstrated they will not design programs that take more of your hard-earned money (or take from any other person or group), but will in fact reduce your contribution - - except in time of a declared national emergency. In making your vote choice base it on what the candidate has in fact demonstrated by actions, and ignore all verbal promises or claims. Never vote for a candidate who employs severe 'scare' tactics against his or her opponent. The more one's rhetoric is 'scare' vs. the opponent, the more you should look deeply at the programs proposed by the opponent. (see the Vote Turn-out Report and Election report 1 and 2)
  12. Seek the wisdom from as many accomplished advisors as possible - - especially from those who support their views with hard data evidence.
  13. Always keep in touch with your children and parents, doing your part to assure the most effective and loving 'larger family' unit.
  14. Do not fall into the trap of 'keeping up with the Jones', as the Jonses are probably consuming beyond their means and may not be successful for the long-run.
  15. It is not how much money you make each year that counts. It's how much more savings, and less debt, you have at the end of the year compared to the prior year.
  16. Be sure your family has a level of medical insurance to protect you from the really big bills. One can keep their premium relatively low by having a major medical insurance policy with a large deductible - - because small bills will not put you in the poor house, yet covering those small bills causes premiums to soar. Talk to your advisor about this. (read the Health Care Report).
  17. Become fully knowledgeable of your local government and take actions to help minimize your own local tax payment by assuring that the number of local government employees grows slower than the  general population increase (not faster, as is the case most places) and that each such government employee pays from his own pay-roll deduction at least as much of his medical insurance and pension benefits as average citizens do in the private sector that pay the property taxes. (read the State & Local Government Spending Report).
  18. LASTLY - citizens have a responsibility to let their elected officials know of their thoughts and concerns. Here's how > Send E-Mail to your Congressman - click this link, then on its next page type your ZIP code - or select any state. In your email to your congressman you may want to point to the Grandfather Economic Report at http://grandfather-economic-report.com/ as a source of data, or to particular section of same. Most congressman are connected to the internet.
  19. Adding this from a savvy stay-at-home mother: "I have no debt (thank the Good Lord with giving me a healthy fear of debt) and own my own home.  So much of what you recommend is how I have lived my life. I would recommend adding 'Growing a small home vegetable garden' to your to-do list. I think people are too far from the earth and from genuine health. If there were some economic or social catastrophe, it would be worsened by people not knowing how to provide some sustenance for themselves. It is very satisfying to see kale grow. And very easy." Linda Spier, May 2003.

darts.gif (1727 bytes)FOR YOUTH

Goal: Be determined to be a winner, by acquiring the best-possible quality education to become self-sufficient and successful in a highly competitive global economy - and, show sincere respect for your parents and teachers.

  1. The school you select should be the one which can prove the highest measurable quality available, year after year. Often the best is provided by private sector and/or parochial schools. Talk to as many accomplished adults as you can.
  2. For college, seek colleges with strong admission and course standards - and, work part-time and avoid borrowing to thereby arm yourself against the debt-debt/spend-spend cons of others. (see the College Report)
  3. Take all the math (including solid geometry, trigonometry, introduction to calculus, science ( 2 each of physics, chemistry, biology), economics (including accounting), and history available in high school , and be sure to include much of same (plus business administration courses) in college, in addition to courses required of ones major. In selecting a college major keep in mind the winners in a global economy will be those with the best technical education. High school students should demand of their school administration that all members of the class take the international math & science test series, and show their results both vs. the national average AND against students of all foreign nations - - they have right to know where they stand. Be most careful to recognize that many textbooks are error-laden.
  4. Demand that your school principal prove to you that your school has been independently proven to be above average in the international math & science exams against all industrial nations, not last in the world like most schools - - after-all, you want to be a better-educated competitor compared to foreign students, Right? Al;so read this report regarding international education).
  5. Become computer literate in word processing, spread-sheets, and internet search research and communication techniques - - not just in games, cell phone text messages and fun stuff. Find things that are fun to do but also educational and life enhancing. For example, volunteering with groups, writing, research into something that is really interesting and becoming an expert, games with other individuals and groups, and creative activities. I have found that creativity is the most satisfying thing I can do. If youngsters would give it a try, I think they would never give it up.
  6. Seek companionship with academic achievers and teachers/professors as mentors.
  7. For school vacations arrange gainful employment in areas of interest, and do not be afraid to take a technical or practical summer course.
  8. Respect your parents, grandparents and teachers, and do not borrow money or use credit cards. (some young people may disagree with this, but believe me - - the day will come when they learn the wisdom of this statement. It's up to them to presume they know more than their elders, especially since I am sure they are convinced that they know more today than they did 2 years ago.
  9. Seek the wisdom from as many accomplished advisors as possible, with special emphasis on those much more senior in age. Do not fall in the fatal trap of thinking those older than you 'just don't get it.' Instead you should check if you think you are wiser today than say 5 years ago. Then ask yourself if you therefore think five years from now you will be even wiser than today. The answer is obvious - - and that answer guarantees that one is foolish not to follow the first sentence: "Seek the wisdom from as many accomplished advisors as possible, with special emphasis on those much more senior in age." Grandparents know more than you - - so, only the foolish would not seek their council and advice - - unless, of course, you like to fly blind into the night.
  10. Be honest with everyone, and never think that you 'know it all.' because if you think so you are in trouble.
  11. After completion of all schooling, continue to improve self with extra courses each year. Adding to your knowledge must be a life-long, continuous process - if you want to be a real winner.

darts.gif (1727 bytes)FOR GOVERNMENT ELECTED OFFICIALS (all levels, including federal, state and local)

Goal: leaner & much smaller, free from (real or contingent) debt & liabilities and management of any part of the economy (other than reporting results), free from transfers (except true handicapped), concentrating on national defense and open markets world-wide - - federal borrowing only allowed for declaration of war for national defense; state borrowing only for natural disasters - - to be amortized to zero quickly as possible. At a time of zero hot or cold wars, the timing could never be better.

  1. For elected officials, eliminate their COLAs, pensions and medical. (this is suppose to be public service, not a career) - with total annual compensation not to exceed twice median family incomes at time first elected.
  2. Downsize & restructure so total spending for all causes (excluding principal payments on debt amortization) does not exceed 15% of national income (6% federal of national income, 9% state & local of state personal income/gross state product). Federal spending should concentrate on national defense and infrastructure for national productivity (roads and bridges). (at this time, total federal and state/local spending is 43% national income, from which a 65% spending reduction would be required to meet the 15% target).
  3. Eliminate all debt that is not amortizable by plan - - (only for infrastructure with measurable impact on national productivity, with user fees (tolls) - - except in times of war. Immediately cease all deficit spending that requires increase in debt, which includes cessation of 'borrowing' from social security & employee pension/hospital funds - - and then develop plan to amortize to zero balance of debt.
  4. Get out of the income transfer business, except for the mentally and physically handicapped. This means elimination of welfare of all kinds to physically able persons, and the phasing-out of social security & Medicare over time - starting with the elimination of all COLAs and cessation of all 'borrowing' from social security and government employee pension/hospital trust funds, with all surpluses to be invested outside government
  5. Eliminate COLAs from government employee and pensioners, and require them to pickup all future increases in medical 'premium' costs (or, choice to opt out to acquire own insurance).
  6. Eliminate all forms of taxation on incomes and property, resorting only to consumption/excise taxes that do not exceed 15% national income, excluding principal payments to amortize old debt.
  7. Cease all collections and spending for education at federal & state levels, with the exception of publishing nation-wide (and for each state, state-wide) quality/spending results to measurable standards. Education funding should be created at, and controlled by the local school district.
  8. Privatize all education primary & secondary education in school districts that, over a 5-year period, score lower than national averages on SATs and/or lower than other nations on the international math & science series and/or more than 2% of their graduates attending college require remedial courses - - and cease lending or guarantee of student loans, except for exceptional scholarship on national examinations - with local school boards to manage transition. (see Education Report, Textbook Report, International Education Report).
  9. Phase down regulatory compliance costs by 2/3rd, such that said costs do not exceed 5% of national income.
  10. Where State & Local Governments levy property taxes citizens hear politicians proudly announce they 'are not raising taxes' because that particular year they might hold property tax rates (property tax mileage rates) even compared to a prior year. If property assessed values rise and tax rates remain constant, bringing in more revenue from each property, that IS A TAX INCREASE, and citizens need to recognize that. Whenever that occurs citizens should write letters to the editor of local newspapers pointing this out for others. The only way a government can say taxes have not increased is when citizens pay the same tax as the prior year - - this is seldom the case.
  11. Savings vs. Debt - Government and Federal Reserve Bank policies have major influences on savings vs. debt. Considering the fact today's household debt ratios are the highest in history, and personal savings ratios are the lowest in history - - common sense tells one this situation is not healthy for families, individuals or for their nation. In general government is interested in low inflation rates, in order to reduce it's own interest payments (it should reduce it's debt principal, instead) and low rates to push households to take on more debt to drive spending in order to produce more tax revenue for governments. INSTEAD - if government leaders are really interested in families and their economic security, then government and the federal reserve should be promoting high enough interest rates to both encourage rising saving ratios AND lowering of household debt ratios - - the reverse of what is being done. Government policies SHOULD NOT be aimed at rewarding debtors at the expense of savers.
  12. Foreign Exchange: government should promote a strong U.S. dollar, relative to other currencies - - but do so with interest rates that encourage savings and penalize debt (item 11, above) - - not by using low rates to encourage more debt to finance more consumption than the nation produces, causing massive trade deficits and a flow of ownership from Americans to foreigners.
  13. Stop siphoning off surpluses paid into trust funds, including to the social security trust fund - - AND, budget to pay-back every penny siphoned-off to date. Since private businesses are not allowed by law to use pension trust funds for business purposes or paying business debt, neither should government trust funds. Trust funds should never loan their surpluses to any government agency - - they must purchase marketable documents in the open market - - including registered treasury bills and bonds. Internal IOUs of the general government should never be held by trust funds. Any debt of the general government must be paid off using general government revenues - - never use of trust fund surpluses. Also see Social Security Report for major challenges.
  14. State & Local government spending & productivity: such spending over recent decades has grown faster than growth of the nations total national income, and their employee counts have grown faster than total population growth (a new record high ratio last year) - with higher pay compensation than the average private sector employee in their community. Often politicians and government employees justify their growth as simply responding to demand by the public for more services. This is untrue, since nearly all programs for spending are generated from within government. AND - such growth in government ratios subtracts from private sector ratios - - a No-No according to the intent of our nations founding fathers. Bottom-line: spending and headcount growth must be reversed to the downside. Assure that state & local government employees do not receive more compensation (or cost-free medical insurance premiums and pension credits) than is received by the average citizen in the community. Therefore, state government should publish data that shows long-term actual results of state-wide spending by state and of federal government spending as a percent of Gross State Product AND employee counts as a percentage of total population - - and require budgeting and targeting to lower each ratio year by year - - on a downward slope - - thereby increasing government productivity.

FOR ALL >


darts.gif (1727 bytes)1. NOW - - make your own To-Do-List.

2. Share it with your loved-ones.

3. Review your list often, and keep it up-to-date.

4. BUT - - always have your own To-Do-List that you think right for you.

5. The time will come when you will be glad you have that list, and have taken actions you believed appropriate. (those who depend on you will also be glad you have a meaningful To-Do-List)

6. And - - from time to time, re-visit the Grandfather Economic Reports - Home Page, since information and data in this series is frequently updated.

7.  Additionally - - consider passing along these ideas and the Grandfather Economic Report to others.


This author hopes the above is helpful


Grandfather Economic Reports - Home Page, a series of picture reports reviewing economics facing families and youth, compared to prior generations. (at http://grandfather-economic-report.com/ )

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