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An Advisor (and Client) Wish List for the Next President

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My annual “wish list” usually coincides with the coming of Christmas, but this wish list is a little different, and one that I believe to be of dire importance for all Americans. So what do I (and my clients) wish for from our next president (and those elected to Congress) come November?  

1. Simplicity

We need a president that will take complex issues and easily explain them in simple terms so everyday Americans can make better decisions for all rather than just themselves.

Our political landscape, world events and life in general is unbelievably complex today. It’s become so fast-paced and complicated that the average person, in most cases, can’t comprehend or doesn’t have time to educate themselves on our country’s political and economic issues to understand where candidates stand on them. 

A prime example is a recent article from Fox News summarizing a report released by the SEC on “The Grim State of Financial Literacy in America.” The report concludes that Americans have a weak grasp on basic financial concepts such as stocks, bonds, compound interest and inflation. No wonder people can’t retire or haven’t saved enough for retirement! 

How do our politicians expect people to have time to understand foreign policy, taxes, unemployment issues, or even the economy as a whole when they’re just trying to manage family, kids and life? Or do politicians really prefer complexity, smoke and mirrors and government dependency? Without really knowing the true facts or data behind any information, no one really has the time or desire to dig past the perception. 
2. Common Sense

It really amazes me just how uncommon is the notion of common sense. I hope that our next president has more of it, combined with a high level of intelligence. Anyone with even a modicum of common sense would realize that our country’s current debt and future spending plans are insane. They should stop the madness and just say ‘No’ to the path we’re on. Now that would take common sense. Our government can’t expect to pull out its credit card for everything and never pay off the balances! With government setting such a poor example by continuing to spend money it doesn’t have, is it any wonder consumer credit card debt was still at $801 billion at the end of 2011? Or that so many people bought more house than they could actually afford, resulting in 14.1 million foreclosures from 2008 to 2011?  We need someone with some basic common sense.

3. Logic and Honesty

I don’t know about you, but elections just irritate me. They’re all about manipulation of the truth and smearing the opponent’s reputation, all for the power and money that elected office can bring. But elections never change, and it’s the same issues over and over. 

Take taxes, for example. One side says more taxes are needed while the other says less is better, with both parties saying their way will lead to economic prosperity. Why is it they can’t just be logical and truthful? Plain and simple, taxes are a burden on the person paying them. If people didn’t have to pay taxes, they could logically pay down their debt, save and invest more or consume more goods and services. In my view, all families would be better off with that option rather than the contrary. Yet increasing taxes just because the government needs more revenue misses the whole point. That’s akin to me going to my boss and telling him I can’t make ends meet at home so I need a raise! How real and logical is that?

However, for some reason, our elected officials just can’t comprehend that, much less relate it to voters. The President has to be truthful with the American public. More taxes on successful families will result in less spending, investing and consuming. The truth is our government doesn’t aspire to live within a realistic budget, as do prudent Americans living within their means. One of my previous articles for AdvisorOne, “Wealth and Taxes,” illustrates that just 25% of America pays 86% of all the tax revenue, starting with those making roughly $66,000 a year in household revenue. So logically, if our government is getting most of its revenue from only 25% of the population, who do you think dictates the future growth of our country? It’s surely not the other 75% of America! 

Logic and honesty would indicate that raising taxes on anyone, especially the previously mentioned 25%, would indirectly deter growth, and here’s why. Let’s assume a family makes $100,000 and they owe $20,000 in federal taxes annually. If you raise their federal tax to $25,000 on the same income, the extra $5,000 has to come from somewhere. Therefore, the family is forced to cut its annual budget, resulting in less retirement savings or less consumption of goods in order to free up the extra $5,000. Is that really the logical way to spur the economic growth we need?

Wishes are just that: wishes! Yet wouldn’t it be refreshing for advisors and investors (and all Americans, for that matter) to finally have a president with a real desire to simplify things in government? One who has an enormous amount of common sense relative to our debt and our future, while honoring his oath to be logical and truthful at all times?

That’s what I wish for and I think most Americans would agree. However, whether we have any candidates who can actually deliver on those wishes is yet to be seen.

Either way: don’t forget to vote!