Election Time, What does it all mean for Retirees?

This is not a political blog, nor shall it be in the future. But we are about to cast our ballots for the next President of the United States and we also will determine the fate of both houses of Congress and the oft underestimated state and local offices. Retirees have much to be concerned about all the way down the ballot.

At the top of this cycle's ballot are the presidential candidates. Our two major political parties both gave us big duds in my opinion and I didn't have to go out on the limb to make this suggestion. But for those of us nearing retirement or already in it, we still have to consider which candidate makes the best case for our situation. Down ballot the same. Although we are all mired in this rather ugly top ticket campaign, do not let that keep you from voting. State and local races are just as important as the big statewide and national seats up this time.

As this is not a political blog, I will refrain from endorsing any specific candidates. I also don't wish to get mucked up in the rhetoric of these politicians. There are many issues in any political campaign especially when looking at national campaigns. A President for example will appoint Supreme Court justices, write budgets, set general policy across the full spectrum of politics from social issues to fiscal management. All of these are very important to most Americans.

From a retirement standpoint, I believe that the fiscal issues have the most impact to retirees and near retirees. Frankly they are the most important issues we have regardless of one's age in my opinion.

If we go back to 1976, Jimmy Carter won the election and became the 39th President of the United States. Mr. Carter surely benefited from the events surrounding the Watergate scandal and the divided Republican party as Ronald Reagan made a very serious nomination challenge to the sitting incumbent, Gerald Ford, that went all the way to the convention. President Carter had a difficult time managing the crisis in Iran and also the economics of the time and ultimately lost his re-election bid to Ronald Reagan in 1980. Mr. Reagan was the last Republican President to truly stand on the traditional Republican platform of smaller government and lower taxes. His tax cuts were approved by congress but his budgets, that were filled with deep cuts in spending, were not. Unfortunately this led to large increases in the national deficit. Although the deficit was a problem, Reagan's policies led to the longest streak of economic expansion in US history that continued all the way through the Clinton Administration. One can only wonder what things may have looked like if Reagan had one party control.

Hillary Clinton. (image from her website)

Unfortunately for all of us, the national party platforms are not what they once were. Republicans had an opportunity in 2000 when Bush defeated Al Gore. President Bush came into office with his party controlling the house of representatives and a 50-50 Senate, the Vice President held the tie breaking vote. Mr. Bush, like his fellow Republican Ronald Reagan managed to get tax cuts passed. Contrary to commonly heard rhetoric his tax cuts were much different than Reagan's. Ronald Reagan slashed the top bracket that was at 70% and brought it down first to 50% then later to 39.9% where it stood till 2003. Mr. Bush lowered the top bracket a bit further to about 36%, an unnecessary move in my opinion. More importantly, the Bush tax cuts were by far the largest income tax reduction for poor and middle class Americans in the 100 year history of the income tax. Opposition politicians focused heavily on the small tax cut for the "rich" and ignored the deep cuts offered to poor and middle class Americans. Herein lies the problem, Mr. Bush did not submit budgets with cuts to offset the the reduced income tax. He had full one party control and yet failed to make the tax cuts pay for themselves. This runs counter to the party platform and in stark contrast to Reagan who did cut the budgets and it was the Democrat congress led by Tip O'Neil that blocked those budgets. President Bush enjoys no such excuse, he got the cuts and didn't bother to try and reduce spending.

Donald Trump, (image from his website)

I am not bringing these issues up to push the right over the left or vice-versa. Rather, I want to bring up the notion that since the departure of Ronald Reagan as President and later, Newt Gingrich as the Speaker of the House, the Republicans have gone off the rails fiscally. Yet the same can be said of the Democrats. Mr. Obama had one party control and in fact he entered office in 2009 with a super majority of Democrats in BOTH houses. His campaign platform was heavy on rhetoric about eliminating the Bush tax cuts, yet once in office and with a filibuster proof super majority, he chose not to do so. He increased government spending but failed to increase taxes to support it. The old Democrat platform was tax and spend, yet Obama chose to just spend. We have two political parties that have both gone off the reservation regarding their traditional party platforms. Republicans are cutting taxes and not cutting spending and Democrats are increasing spending without increasing taxes. This is a fail scenario either way my friends.

All of this is important to consider as 20 trillion in national debt coupled with some 60 trillion in unfunded liabilities weighs heavy on retirees. Our government may not be able to keep the promises of social security, medicare, and medicaid. These are programs that are very import to all but the wealthiest among us.

As someone considering their retirement, voting for candidates with strong fiscal ideas is important. If you support a larger more involved government, Democrats tend to fill that void. But be wary of these modern Democrats that spend, spend, spend but fail to take the unpopular position of paying for it with needed tax increases. Likewise, if you believe that our government should be lean and trim with lower taxes and less intrusion, Republicans are generally the way to go. But be aware of these modern Republicans that like to slash taxes but won't make the tough and often unpopular cuts to the budget to pay for it. This notion of borrowing to pay for services we can't pay for has to stop. All the way down the ballot look for candidates that support the ideal you believe in whether it is tax and spend or small government and don't be fooled by the lies of those new modern politicians that think we can have both. It is one or the other my friends, low taxes and minimal government or high taxes and bigger government.

My personal beliefs are that the federal government should be lean and out of our lives. The old school fiscal ideas of Reagan are true and solid. Unfortunately there are not many Republicans that actually follow those ideas anymore. That said, tax and spend with a balanced budget is better than low taxes with a huge deficit. Are there any Republicans out there willing to make the hard decision to cut spending to support lower taxes? In Congress, yes there are, but at the top level, not since Reagan.

Get out and vote, you don't get to whine about the system if you fail to participate in it. Do not overlook the local and state level races. These are often low paid and even part time positions that are held by everyday people like us, not power hungry establishment politicians with high levels of corruption. Vote down ballot and make a difference in the place that you live and yes try to figure out which one of these two turds we have at the top will best serve your interests and vote appropriately. Remember as the wheels fall off the federal cart, and they will, the lug nuts are very loose; local and state governments will have to carry the load. Down ballot we have great control over how that plays out and the people that run for state legislature and local commissions are accessible unlike our federal level politicians that rarely have time for us lowly commoners.