Pragmatic versus ideological — casting your vote for yourself or your fellow Americans?

[Original post from 2012]

I enjoy observing the political theater every four years when we elect a new president. I’m taking off the white gloves and asking some difficult questions the rest of this post. My asking may offend you, politics is one of those “third rails” that get people riled up. If you are offended that’s fine, it is your personal choice — feel free to even share why in comments or to me directly.

The big question… Who should I vote for? Five words, such a short question, such a complex answer. Should you vote for the candidate that best matches your ideologies? What if you know those ideologies are likely to benefit you and harm a majority of the others in America? Are you morally obligated to vote for the candidate that will be the most beneficial for the country as a whole?

After thinking through that, should you vote for the candidate that makes the biggest impact in the short term or the long term? What about policy making that benefits future generations or takes care of people today? We have been voting, as a nation, in favor of candidates that take care of us today, that focus on the short term, and because that is what the electorate is asking for that is what you get running for office.

Carrie Lukas does an excellent job explaining our budget problems by comparison the federal budget to an individual household by removing eight zeros. What it basically shows is the core federal debt is ~7x annual income and growing rapidly. This is forcing us into the zero interest rate policy which is going to inhibit growth for the long term.

If the average interest on our debt went up to a still historically low 5.5% we’d be spending ~25% of our income just on interest. If we have another high interest rate period comparable to the late 70s we would be spending nearly all of the federal government income on interest — how scary is that?

The problem we have is neither party wants to solve the problem — the giant pile of money is their source of power and politicians, in general, are excited about the power because they believe they can use it to improve lives. Power isn’t necessarily bad — used properly to allocate resources a centrally led organization (a nation is a very large organization) can have amazing results. We aren’t getting an efficiently run centrally planned organization — example is the manufacturing of the Joint Strike Fighter as reported by the GAO [PDF], “The new program baseline projects total acquisition costs of $395.7 billion, an increase of $117.2 billion (42 percent) from the prior 2007 baseline. Full rate production is now planned for 2019, a delay of 6 years from the 2007 baseline. Unit costs per aircraft have doubled since start of development in 2001.”

The bad news is efficiently operating our current services won’t fix the situation — even if half of the spending was waste in the purchase of goods or services the budget still does not balance over the long term (exclude wages for active employees in civil service or military and direct payments for pensions or welfare). We do not have the resources to fund the entitlements we promised.

Cities are already going bankrupt wiping out public pensions (ex. Detroit, Stockton, Vallejo) as the only way to become solvent again. This isn’t unique to public pensions or budgets. Private companies file for bankruptcy all the time and in some cases pensions are wiped out (ex. American Airlines) or significantly reduced. It is hitting cities first, next will be the states and they technically can’t go bankrupt. This will give us an opportunity on a smaller scale to see what happens when the federal obligations that cannot be met come due. I expect it’ll be quite a bit like Greece if it is a smaller state. The situation is very similar as they aren’t in control of their own currency and have membership in a larger group that will want to influence the outcome. Without the orderly process of a legal bankruptcy it will be interesting to see who gets paid and who doesn’t. For the sake of the federal courts it would be ideal if a smaller state defaulted such as Rhode Island (it would be half the size of the Detroit city bankruptcy) to work out the kinks before a larger state such as Illinois or California reach the finish line.

Personally I cast my vote for what I believe will give America the best opportunity to succeed as a nation. If the land is full of growth creating opportunity, then individual success is easier to achieve. If we end up in a malaise or depression for decades, it’ll make it harder to meet obligations and for individuals to achieve success. For our pension situation I feel bad about promises that were made that likely have no way of being kept. It may actually lead to increased happiness as families will spend more time together. Would you rather live in your own home as a retiree and burden your children and grandchildren with debt you know their generation cannot repay or would it be better to live with them? If Greece is our bellwether, then nobody is going to voluntarily give up their pension or benefits for the good of the whole. You may ask, “Why should I give up what is mine? My benefits alone won’t balance the budget — everyone would have to do it together for it to matter. Until they join me I’m not going first.” — Are you willing to help organize and make this orderly with a group going together? willing to help organize and make this orderly with a group going together?