What would my ideal party would say about fiscal policy? It’s really simple: pay the bills, and invest the taxpayer dollars wisely, with appropriate research and debate. If you have time for more than a sound bite, read on.
- Pay the bills. Don’t make a big question about whether we’re going to do it. That creates a climate of uncertainty, and anyone who has experienced uncertainty about their own job security will tell you that uncertainty is going to keep money out of circulation.
- If an expense has an end date, have the renewal debate. (And no, words like “class warfare” and “cocaine addicts” don’t count as debate.) Consider the ROI on those tax dollars.
- Would the money be better spent to pay down some debt? Paying down debt has an ROI when measured over time — that’s why you pay down the highest interest rate loans first — and the debt itself has an opportunity cost.
- Is there a way to spend the money that would create more income, or reduce other expenditures?
- What’s the ROI for discontinuing the program? Remember, discontinuing it increases uncertainty for investors, loses the program’s ROI, and puts program’s employees out of work. All that is negative ROI.
- Whether you believe government is too big, or think government doesn’t do enough to help, make a financial ROI case for whatever change you want to make. Find the people who can articulate how that ROI would work for that program and listen to them. Can they quantify the risk and the expense, in a way that makes sense?
- Military expenditures? Look at ROIs in efficiency as well as effectiveness.
- Social programs? Look at health care costs, incarceration expenses, earnings potentials.
- New technology programs? Look at catalysts for growth in existing businesses aside from the implementers.
- Don’t be afraid to regulate the financial companies – not just the banks – to protect the innocent or the naive. But don’t try to regulate risk out of the system. Some financial instruments are made for risk takers. Slap the equivalent of the surgeon general’s warning on those types of investments, and let the risk-takers have at it.
- Don’t bail the risk-takers out if they lose. That’s what risk is all about. If you want the consumers to have faith in the system, then it needs to be allowed to function. Risk-takers get potential for high rewards. Conservative investors get their security. Balanced portfolios benefit from both.
- Be a good steward for Social Security. Replacing Social Security with 401Ks may have sounded like a good idea once, but anyone paying attention knows that (a) 401Ks are volatile, and (b) naive, gullible, and/or short-sighted people are quite capable of making poor 401K choices. These are not risk-takers. These are people who entrusted (willingly or not) some or all of their retirement savings to the government.
Just imagine, a government that manages our tax dollars and FICA retirement funds in an atmosphere of confidence, prudence, and informed decision-making. Wouldn’t that be something to vote for?