Grandfather Economic Report series
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A Summary by 12 Serious Questions
by Michael Hodges - email
- a chapter of the Grandfather Economic Reports -

You may have viewed the Summary section of the Home Page
and its link to the picture summary of 5 Core Problems.
Following is the summary in more detail, via 12 questions in text form
- - and a bottom line

SUGGESTION -
Before clicking any of the following links, read the 12 points completely - - then return to the link of choice

12 SERIOUS QUESTIONS covered by this Report Series

While we celebrate many things, such as longer life expectancy, a nation not at war, and more consumer choices - - IS IT FAIR TO FAMILIES and their CHILDREN TO INHERIT ANY OF THE FOLLOWING 12 ITEMS - - instead of our fixing them ?

  1. FAMILIES - An economy where inflation-adjusted median family incomes have hardly budged in 2 ½ decades, and that of full-time employed males has dropped, despite record numbers of mothers leaving their children to day-care by others to enter the workforce trying to make ends meet? We have an economy where family savings are lower with higher household debt ratios than prior generations. Americans have not saved so little since the depression of the 1930s - spending well beyond growth of their incomes. Each working family must support, in addition to themselves, more senior citizens, more state & local government employees and more total debt than ever before. Additionally, although life expectancy has increased relative to our past, the Health Care Report shows other nations have better life expectancy with better quality health care, and do so at much less cost in both government and private sector spending.
    Family pressure is caused by too much government, to much private sector debt, poor international trade balances, and poor education quality.
  2. Government DEBT - A federal government debt burden of $29,000 per child ($9 trillion) and growing, more than half of which was created in the 1990s, even for children still in diapers? (this is on top of record foreign debt, debt of state & local government, and un-funded & off-budget items). It takes $40 million per hour, 24 hours per day, 365 days per year to pay the interest on federal government debt, without even counting interest paid on record private sector debt. In relation to the size of the economy, recent federal debt 2-times higher than the early 1970's - - and foreign entities now receive 46% of the interest on debt outstanding to the public, double that several years ago. Even in the past fiscal year the federal government (despite raking-in the highest income tax ratio to economy size in history) debt increased to a new record high, while at the same time they said they ran a surplus as they drained trust fund surpluses for non-pension spending.. (see trust fund report 2000 & 1999). Some claim they are paying back debt, yet debt totals have expanded. What they need to tell you is that they are siphoning off surpluses from the social security and other trust funds and using that to retire a few T-bonds while covering that by putting in the trust funds more non-marketable IOUs which increases the debt total.
  3. Private DEBT - This debt psychology, with propensity to create huge amounts of federal government debt, has spilled over into soaring private sector debt, primarily in the areas of soaring domestic financial sector, business sector and household sector debt at growth rates much faster than general economic growth - as shown in the powerfully-illustrated total American debt report - where the sum total of private sector and government debt has soared to a new record of  $48 Trillion. Thomas Jefferson would have shuddered.
  4. EDUCATION - An education system for which the productivity index declined 71% as quality eroded despite tremendous increases in per student inflation-adjusted spending and despite smaller class sizes than before, where public school cost per student is 2-3 times higher than private schools and are still less competitive vs. major foreign competitors than was the status for their grandparents. U.S. 12th graders scored at the bottom of the list of nations taking the recent international exams in math & science , and the Dec. 2000 report shows our 8th graders failed to improve their previous poor exam showing, as foreign students have a more rigorous education. Colleges reduce standards to meet poor high school output and huge percentages of freshman require remedial courses. Many college graduates carry huge student loans to qualify for jobs formerly performed by high school graduates. Recent studies on Textbooks and math teaching methods showed 85% of middle schoolers use science text books that are significantly error-laden and unacceptable - - and that. honors high school science texts are no more difficult than an eighth grade reader 50 years ago, and 200 mathematicians and scientists, including four Nobel Prize recipients and two winners of the prestigious Fields Medal math prize, deplored math teaching methods, saying they are 'horrifyingly short on basics'
    `The quality of schooling is far worse today than it was in 1955,'' Dr. Milton Friedman, the Nobel laureate wrote in the Washington Post. The international organization, OECD, called "U.S. schools mediocre at best."
  5. PRIVATE SECTOR SQUEEZED -
    Big Picture - The share of the economy controlled by the private sector has been squeezed down to a 56% share, because government (sum federal, state & local government) spending controls 44% of our economy, compared to but 12% when I was young. The Era of Big Government is not over. Did our founding forefathers intend such dominance and dependence upon government?
  6. TAXES - An economy so much dominated by expansive federal & state/local government growth, at growth rates many times faster than growth of the general economy, that the average person works 5 months each year just to pay per-capita share of all federal, state & local taxes compared to 1.4 months of work required by prior generations. That's 300% more working time required to support government than before, and more than families pay for food and housing. Last year was a new, all-time record in inflation-adjusted taxes to all levels of government paid by median income dual-earner families. No wonder family savings are negative for the first time in history and family debt ratios are at record levels. No wonder fewer families have the choice for mother to stay at home to help assure more disciplined and better educated children. And, not only are federal, state & local governments siphoning off family earnings for taxes faster than their earning growth, they have also siphoned-off future pensions from the social security trust funds. This unending money-appetite of government must be curbed. Since government has no motivation to reduce spending, since there are so many feeding at the trough, then the only way to place pressure on spending is to reduce revenue - - meaning citizens should push for major tax cuts. If such cuts squeeze government politicians and bureaucrats then it's about time.
  7. GOVERNMENT SECTORS expanded -
    a. summary - An economy that is 3 times more government-dependent than I inherited - - now costing $15,356 per man, woman and child - - because spending increased much faster than the economy at large? The combined government share (sum federal and state/local government spending) of the total economic pie is 44% of the entire economy (national income) today, compared to a 12% share before. And, this does not include an additional 14% consumed by regulatory compliance costs. Therefore, spending plus regulatory compliance costs equate to 56% of the economy's total national income. Why did this happen when most agree the private sector is the most necessary engine of future incomes and living standards. (you might like to view the 3 dramatic graphics of the Government Growth Report again, and then ask what share of the economy should government control and who says the 'era of big government is over?')

    b. Federal government - An economy where federal government's spending has grown 8 times faster than the economy, since I was an infant. It now consumes 26% of the economy, or $9,223 per person - - compared to consuming only a 3% share of the economy prior to the New Deal of the 1930s. And, all the excess growth has been in the area of social spending, an item not included in the 4 principal functions of government envisioned by our founding fore-fathers, according to the Federalist Papers of 1787.

    c. State & Local government - An economy burdened by 12.2 million excess state & local government employees and pensions, because their head-counts continue to grow  faster than the general population - - and their spending increased three times faster than growth of the economy since World War II, to today's $6,132 per person - consuming 18% of the entire economy, compared to a 6% share post WW II. While most people know each working person must support more seniors than ever before, very few citizens know they must each also support more state & local government employees than ever before - - a double whammy.
  8. REGULATION IMPACT - An economy where the relative share of the economic pie left to the private sector has become smaller due to government expansion - - and even smaller considering $1.2 Trillion in un-funded regulatory compliance cost additions of $4,154 per person - now 14% of the economy. Adding 14% unfunded regulatory complaince cost to total government spending of 43% of the economy, sums to 57% of the economy is consumed or controlled by government, leaving but 43% to the 'unburdened' private sector.
  9. SOCIAL SECURITY - An economy that is draining the future potential of our young - - by causing families to work more months each year to pay higher taxes to support more government (than prior generations), and to provide current retirees with inflation-protected social security and medical benefits that will not be provided to today's working families and children when they retire. As mentioned above, every penny of additional FICA taxes paid by workers supposedly to build surpluses in the trust fund has been siphoned-off as fast as it arrived and spent on non-pension items (an illegal practice for private sector pension funds). How does that 'save social security first?' The same goes for the other trust funds - - now bulging with non-marketable IOUs with zero plan to repay.
  10. INTERNATIONAL - An economy that continues to prove its lack of net international competitiveness with huge trade deficits setting new, and now very serious records each year - all indicating unsustainable increased debt owed to foreigners. Our economy is three (3) times more dependent on international trade for its goods - compared to prior generations. An economy that was the world's largest creditor nation when I was an infant is now the world's largest debtor - - becoming more so each day. The government recently set up a new body to review this serious issue, the U.S. Trade Deficit Commission - - its consensus December 2000: the situation is extremely serious and not sustainable. Should we feel more secure if today's economy has less potential to support an economic surge necessary to meet a major challenge equivalent to World War II, as shown in the National Security Report? A 126-year graphic in the Comparative Spending Report shows the U.S. has followed the lead of many other nations expanding government's share of the economy.
  11. ECONOMY - An economy where inflation has eaten 85% of their currency (although slow economies elsewhere and a slump in commodity prices have provided some recent slow down, and especially now that government has re-defined how they measure inflation and other indicators (revising statistical measurements) to make it appear a bit less, and where its international buying power (the U.S. dollar) may again be threatened. An economy where productivity growth rates have fallen 70% in 35 years if measured consistently with past criteria - - from rates that were then averaging 3-4 times higher, despite some recent up-tick which can be attributed not to real productivity improvement by the old way of measuring but by creatively changing how they count. The Energy Report shows declining U.S. oil production & reserves, soaring consumption and imports - - more dependent than ever on others
  12. TRUST AND VOTING - Voter Turn-out Report shows a continued 40-year decline in citizen participation, with a low in the 1996 and 2000 elections - despite record political media campaign spending and voter registration drives - - and the Trust in Government Report shows 69% do not trust government plus a new low in citizen trust in ethics & honesty of elected officials and news media professionals - - an increase in lack of trust from 3-decades ago - serious negative indicators for a representative democracy, compared to prior generations. See also the Elecction Report which graphically shows how, in the past several elections, America seems more like two nations instead of one.

WHERE ARE WE ?

You have reviewed the 12 questions. You have reviewed 5 graphics summarizing the 4 core problems of government dominance, education quality, America's total debt and international trade indebtedness. Following is a 'bottom line' to complete this Summary Report of the Grandfather Economic Report series.

BOTTOM LINE

Once you have visited each of the sub-reports of the Grandfather Economic Report , which contain pictures demonstrating the data, it is most probable that you will concur with the above, and the following:

These reports are intended as a public service for American families and youth, to enhance individual knowledge and to encourage protective strategy development.

If you review each mini-report in the series, the author would like to hear from you and see your hard data evidence if you have come to a different conclusion . If you have data to add to make this series more comprehensive & accurate, this would be most appreciated by E-MAIL to Michael Hodges

These 12 items high-light a summary of certain economic threats to families and youth, compared to prior generations.

Since we are all in this together, let us become more knowledgeable.

Please do not develop a negative feeling. There are so many great & positive things about our beloved America to celebrate, and several significant positives are shown in the Generational Celebration Report - such as improved life expectancy, zero wars and more consumer choices. But, there are also some negative trends, as outlined above. Perhaps if more are aware of the negatives even more solutions & positives will result. The objective of these reports is to increase awareness of certain disturbing items - to further improve our great nation.

Enhanced knowledge for the above 12 questions is presented in a series of easy-to-understand picture reports - - listed by subject category on the home page: 'Grandfather Economic Reports'

WHICH THREATS ARE NOT COVERED?

DO YOU AGREE THIS IS NOT A PRETTY PICTURE
TO BEQUEATH TO THE NEXT GENERATION?

Does it make you proud, and unconcerned? Would you hope for a better picture for the economic future for your family, children and grandchildren?

YOU ARE INVITED

You have just read the Summary page via 12 Serious Questions identified in the Grandfather Economic Reports - A series of picture reports to increase awareness of difficult economic challenges facing families & youth, compared to prior generations.

For a summary of other serious findings presented of 5 Core Threats, or a summary of Mega Trends along the 'road traveled', read links 1 and 3 of the Home Page Summary - -

- - after which you may review the Home Page index of all chapters covering a graphic presentation reviewing economic issues facing today's generation compared to prior periods - - in an easy-to-understand format. You can pick the subject of interest to you for more in-depth knowledge of issues impacting us all.- - each with dramatic color graphics proving and expanding the above summary on other subjects. Chapters include: family income, debt, savings, government spending and size, trust funds, education quality, social security, regulations, taxes, inflation, productivity, foreign trade and exchange, voter turnout, trust, celebration, national security, energy, and health care/life expectancy

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