THE GRANDFATHER ECONOMIC REPORTS
'What To Do' List
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
Then make your own To-Do list.
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
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'
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.
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.
- 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.]
- 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
- 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.).
- Understand the challenge children and to family income where both parents work. (read
all pages of the Family Income Report).
- 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).
- 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.
- Adults should continue their education, each year, according to a plan that includes
economics (with accounting and investment).
- 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.
- 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.
- 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.
- 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)
- Seek the wisdom from as many accomplished advisors as possible - - especially from those
who support their views with hard data evidence.
- Always keep in touch with your children and parents, doing your part to assure the most
effective and loving 'larger family' unit.
- 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.
- 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.
- 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).
- 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
- 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.
- 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.
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.
- 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.
- 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
- 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
- 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).
- 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.
- Seek companionship with academic achievers and teachers/professors as mentors.
- For school vacations arrange gainful employment in areas of interest, and do not be
afraid to take a technical or practical summer course.
- 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.
- 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.
- Be honest with everyone, and never think that you 'know it all.' because if you
think so you are in trouble.
- 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.
FOR GOVERNMENT ELECTED OFFICIALS (all levels, including federal, state
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.
- 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.
- 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
- 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.
- 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
- 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
- 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.
- 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.
- 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).
- Phase down regulatory
compliance costs by 2/3rd, such that said costs do not exceed 5% of
- 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.
- 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.
- 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
- 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
- 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
FOR ALL >
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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