Entire contents copyright 2020 by Terry E. Nager, CFP®

1. What is the greatest single benefit that the U.S. Government would derive from the implementation of the Plan For America (PFA)?

Although there are numerous benefits to the U.S. Government, the greatest single benefit from the implementation of the Plan For America would be the relief from an estimated $120 trillion in unfunded liabilities from the Social Security and Medicare programs.

2. Why is it essential that the For America Security Trust (FAST) be primarily established through a contractual agreement with the Federal Government and each of the 50 states rather than merely through legislation?

A contract is needed to protect us from the government. Any bill that is passed by the House of Representatives and the Senate and is then signed into law by the President can be changed or done away with by an opposite bill passed by the House of Representatives and the Senate and signed into law by the President. In other words, if we put in place a plan that solves America’s retirement, health care, and debt funding problems but do not put in safeguards, then the government could do the same things that got us into this mess.

  • The sacred trust of the people that the government has so egregiously violated must be safeguarded and taken permanently out of the government’s hands.
  • An independent board of trustees who answer only to the participants and beneficiaries of the FAST would have the responsibility for the custody, administration, and investment of the FAST assets.
  • There must be no government influence or ties to the board members or any of the key employees of the FAST.
  • The strength and enforcement of this contract is the key to the permanency of the solution. If the Plan For America (PFA) strategy is implemented and the long-term obligations are handled, but the government is allowed back in, then “We the People” could find ourselves with an even more severe problem sometime in the future.
  • If the government breaches the contract, then it should have to pay the $120 trillion (the amount of unfunded liabilities) to the FAST as the remedy.

3. What is the second greatest and immediate benefit to the Federal and State governments from the implementation of the Plan For America (PFA)?

The second greatest and immediate benefit to the Federal and State governments is being relieved of the Medicaid obligations.

  • The individual states would be relieved of their portion of the Medicaid cost which in some states runs up to 17% of their annual expenditures.
  • It might be possible for some states to balance their budgets with the removal of this large expenditure.

4. What is the best way to protect the Plan For America (PFA) benefits from the government?

A constitutional amendment is the best way because it would even further remove the PFA benefits from government access than a contractual agreement.

5. What would be the greatest ultimate benefit from the Plan For America (PFA) to the Federal and State governments?

The ultimate benefit to the Federal and State governments is the provision in the contract with the For America Security Trust (FAST) that calls for the cash flows from the FAST, once it has retired and paid off all of its bonds, to be paid to the Federal Government 50% and to the State governments 50%.

6. Why would the United States Government be willing to back the bonds issued for the For America Security Trust (FAST), pay the interest of the bonds, grant all of the various tax concessions in the contract, get out of the retirement and health care providing business as well as divesting itself of all equity stakes in any private enterprise that it holds?

The U.S. Government and the State governments should be ecstatic with this arrangement because they are getting a great deal.

  • Additionally, a high-quality social safety net will be provided for all U.S. citizens without the enormous budget-busting outlays that are currently projected.
  • The ultimate cash flows to government coffers to retire all debt and replace taxation as the primary revenue source should bring on outright jubilation from the Administration, Congress, and State politicians.

7. How would the Plan For America (PFA) eliminate the legal controversy regarding the “commerce clause” and the mandate to purchase health insurance?

The U.S. Supreme Court decided that ObamaCare was a tax and therefore the law was constitutional. The Court did not rule on the constitutionality under the “commerce clause.”

  • Second, the benefits offered under the PFA are so overwhelmingly superior to those offered by Social Security, Medicare, Medicaid, and ObamaCare that the choice will be obvious.

8. How does the Plan For America (PFA) handle the issues of corporate governance and out-of-control executive compensation?

The PFA handles the corporate governance and out-of-control executive compensation through the proxy-voting process in contrast to the legislative approach.

  • Having safeguards in place that prevent corruption and self-dealing
  • These trustees would be held to the highest standards and any breach of trust, malfeasance or ethical misconduct would be dealt with in the most severe criminal and civil prosecution.
  • Since these board members serve at the pleasure of the participants, then an appropriate apparatus would be set up in order to have a special election to remove and replace any or all board members if the participants deem it to be necessary.
  • The board members should have strong backgrounds, a wealth of experience, and a history of accomplishment as well as character that is impeccable.
  • They must be free and independent from any government influence or control.
  • The specific companies that the mini-boards would have under their authority should change every 3 to 5 years in order to prevent corruption from developing as a consequence of a prolonged relationship between the corporation and the overseeing mini-board.
  • The mini-board members should have expertise in finance, corporate governance, a good knowledge of the industries of the companies that they are overseeing, and a history of impeccable character.
  • They should be well compensated in consideration of the tremendous responsibility that is placed upon them as well as the capabilities that they must possess.
  • As is the case with the FAST board itself, these mini-board members would be held to the strictest standards and any misconduct or corruption would be dealt with harshly and prosecuted to the fullest extent of the law both criminally and civilly.
  • Each comparison category- such as financial condition or long-term policies -would receive a letter grade as well as a composite letter grade for the company as a whole.
  • The three-person mini-boards that vote the proxies on these companies for the FAST would be given these reports which they would use in addition to their own information to help them decide how to cast the proxy votes.
  • They would then write up a report about how they intend to vote and why.
  • The FAST board would then publish that report along with the report prepared by the accounting/consulting firm with the letter grades so that it would be public information and help other shareholders to make informed decisions when voting their shares.
  • This process should go a long way in curbing excess management/board compensation and corporate abuse without government interference or mandate- because as the old expression goes, “SUN LIGHT IS THE BEST DISINFECTANT.”

9. How could the Plan For America (PFA) resolve the dilemma of the unfunded retirement systems that plague many of the individual states?

The For America Security Trust (FAST) could resolve the underfunded retirement system’s problems by taking over the state pension obligations. The takeover steps would be as follows:

  • The 4% minimum return guarantee would extend permanently, and there would be a high probability that the returns would be significantly higher over time because the account would earn stock market returns less 2% (for the FAST charge) and the annual payout would be 4% of the previous year’s ending account balance or the minimum guarantee whichever is greater.
  • When the state employee retires (as early as age 60 at his/her option) then he/she would receive the monthly payout both federal and state tax free.
  • When the retiree passes away, his/her heirs would receive the tax-free cash flow that the retiree was receiving and it would pass to them without any estate or inheritance taxation instead of being forfeited as are most pension benefits currently.
  • If the state was unable to convince its workers to accept the tradeoff of their partially-funded pension in exchange for the PFA, then the state could sweeten it by an additional amount added to the initial FAST contribution via a 2% interest rate deferred loan from the FAST to bring the participant’s account up to the level that would make the deal acceptable. The loan would not require any annual payment by the state above the renegotiated pension contribution. The loan would accrue 2% interest compounded annually and would ultimately be paid off out of the state’s share of the revenue sharing from the FAST after it had retired all of its bonds. No revenue sharing would be paid out to that state until the indebtedness and interest was paid in full. Of course, the state would have the option of paying the loan off earlier if the state chose to do so.

10. What advantages and disadvantages would the states incur under the Plan For America (PFA)?

The advantages would be:

  • Each state, if it elects, could be relieved of all of its pension liabilities both the funded and unfunded portions.
  • Each state will receive its share of the For America Security Trust (FAST) revenues after all FAST bonds have been retired which will enable the state to ultimately retire all of its debt and reduce reliance on the taxation of its citizens.
  • The loss of tax revenue (if the state has an income tax) on the elective contributions (regardless of earnings) of up to $100,000 annually that a participant could contribute to the FAST on a tax-deductible basis.
  • Each state’s tax-free municipal bonds would have to compete with the tax-free dividends from the U.S. domiciled publicly-held corporations.

11. How will adopting the Plan For America (PFA) affect the goal of balancing the U.S. federal budget?

Adopting the PFA will affect the goal of balancing the US federal budget by removing the number one obstacle, which is spending on entitlements. If spending on Social Security, Medicare, Medicaid, and ObamaCare are removed from the present and future budgets, then the excuses for deficit spending would be greatly diminished.

12. How will adopting the Plan For America (PFA) affect the goal of balancing the individual state budget?

Adopting the PFA will affect the goal of balancing the individual state budgets in the near-term by removing Medicaid costs. In the longer-term, eliminating the unfunded pension liabilities along with Medicaid costs should take away the obstacles to balancing their budgets.

13. What happens to the enormous and building cash flows from the For America Security Trust (FAST) after all the federal and state debt is retired and the annual cash needs of the federal and state governments have been met?

The surplus cash flows generated from the FAST revenue-sharing would be refunded to all FAST accounts on a pro-rata basis from the federal surplus after all cash flow needs have been met.

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