The Yankee mentality and the economy
Our Yankee character has helped us weather another set of snowstorms here in New Hampshire. We take such things in stride as we reach for our shovels and roof rakes.But how do we employ our inherited Yankee common sense, attention to detail, and ability to get the job done to compete in the very competitive global economy?As our new legislature convenes, our state budget is upside down. Our constitution requires a "balanced" budget. Alas, this is easier said than done these days. With a population of 1.3 million, we have an $11.4 billion bi-annual budget. If you do the math, $4,385 is owed by every man, woman and child per year. Our elected representatives have a big gap this year, possibly as high as $700 million. The same is true in Washington, D.C., with dollar amounts in the trillions.Looking out my kitchen window, I can see several households who do not come close to paying their "share." That is OK, after all, there is the "ability to pay" principle - those with more should pay more.Our system of revenue collections is very complex (and many would say antiquated). The business profits tax and the business enterprise tax are big pieces of the "income side," along with liquor sales and many others.We are using debt and credit to cover ongoing annual operating costs, however, and when companies or households do that, they go bust. So will our state and our country, if revenues don't increase and/or expenses shrink.So is it a revenue problem? Then raise taxes. Is it a spending problem? Then cut expenses. Well, it is both, and the tepid recovery from the recession isn't helping much.My 24-year-old daughter and 21-year-old son were home for the holidays. As I listened to them expound upon the shortcomings of our government, the lack of confidence in Congress, the injustice of the pending debt, I could not help but think, "Boy, I am glad not to be facing their next six decades." Think global, act localI told my two kids that they may not achieve or maintain the same lifestyle and standard of living that they have enjoyed so far, but they need to be observant and aware. They will need to be their own advocate. They may need to be entrepreneurial and certainly global in their thinking. The same goes for the rest of us. We can salvage a reasonable quality of life and standard of living, but it will require changes from all of us. I will likely work full-time to 68-1/2(instead of 65) and I will need to dial back to 65 percent to 70 percent of my annual income during retirement (instead of 80 percent). I need to continue to earn some income, perhaps $15,000 to $20,000 per year, to offset inflation and constantly rising health-care costs. As a real estate consultant, broker, mediator and arbitrator, I should be able to do that reasonably well, but others may not have these "semi-retirement" skills.The big house can be sold in exchange for a condo or smaller home, but with real estate values still soft, now does not seem the opportune time to make the change. At least 2011 promises to be busier than 2010 and, hopefully, that means more prosperous too. Time will tell, but our sense is we are through the worst of this and should see slow but steady improvement.Bill Norton, president of Norton Asset Management, is a Counselor of Real Estate (CRE) and a Facilities Management Administrator (FMA) with the Building Owners and Managers Association. He can be reached at firstname.lastname@example.org.