Tuesday, April 2, 2013

Town Hall Meeting with Congress Man

My Congressman Bill Flores is having a Town Hall Meeting this week.  I have been thinking of issues that are most important to me on a Federal Government Level.  Here is my list:

- Escalating cost of Higher Education
- Escalating cost of Heath Care
- Next Financial Crisis due to Federal Deficit and Debt Spending 

The cost of College Education has dramatically increased since I graduated in 1996.  My final college tuition was $12.5K per year in 1996 (it actually started at $9.5K/year in 1992) and now is $40K per year, 17 years later.  That is a 400% increase in tuition.  My engineering salary in 1996 was $42K.  My current salary has only increased by a little more the 2X.  Why has tuition cost gone up exponentially and salaries have stagnated?  How can anyone graduating ever afford to pay for their schooling.

It is generally recommended not to borrow more than you can pay back using 10% of your monthly income. When planning to afford college, you need to carefully consider if it will be realistic to make the post graduation loan payments based on your expected salary. Using these parameters, a post graduation salary of $161,600.40 is recommended to afford the $1,346.67 monthly payment. This assumes a loan payback over 10 years.   Even an Engineering degree wont give you a $161K salary straight out of college.

Lowering Health care costs has to be another top priority. Unfortunately, Obamacare only increases the costs by requiring more elective procedures and requiring insurance plans to do more. If we want to really lower costs we need to: 

1. Have more competition in the Heath care system. The government can promote more kids to become doctors and nurses.   
2. Promote health care tourism. You can get Heart bypass surgery in Thailand for 20% of the cost in the USA. 
3. Limit malpractice lawsuits against Health care professions.

If history repeats itself again, we are due of another financial crisis.  This tends to happen every 10 years and a severe depression every 70-100 years.  

2008 - The last financial crisis, caused by a credit bubble in the Real Estate market.  
2000 - Dot-com bubble crashed, caused by speculators in the Nasdaq and Y2K fears 
1997-  We had the Asian Financial Crisis.  
1987 -  Black Monday - 20% drop in the stock market caused by the Savings and loan crisis.  
1929 - The last Great depression.

If the USA keeps borrowing money to pay for all its spending we will eventually collapse our currency.   The US dollar is being propped up now, since we are the reserve currency of the world.  If the world decides to dump the US dollar as the reserve currency, then things will get even worst.   This happen with England in the 1970s and there Sterling got crushed and the people suffered for many years.

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