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The Great Debate and Balancing Act: Short vs. Medium vs. Long-term Needs

December 22, 2010

The Great Debate and Balancing Act: Short vs. Medium vs. Long-term Needs

Responsible people understand the benefits of balancing  short, medium and long-term needs. We know that we need to use a percentage of our income for daily and weekly needs: food, shelter, medicine, transportation, utilities and other items. We also recognize the benefits of putting money aside for medium-term items; perhaps for a summer vacation, home repairs, and major purchases such as appliances.  Similarly, we appreciate the importance of saving for long-term needs, such as retirement, college tuition, or long-term care.

Responsible people also ensure that the promises they make can be kept. They do not stretch themselves to the breaking point or jeopardize their long-term financial health just to satisfy unsustainable or unreasonable demands.

On national and state levels, this is one of the big debates fueling passions on various sides of the issue. Our governments have not acted responsibly and are now in a very big jam, putting services at risk for citizens who need and depend on them. Our elected officials overspent on short-term and politically expedient items. Various constituencies pressed for expensive services and continual benefits, which created addictive expectations, making it hard to cut back. Many “nice-to-haves” became “need-to-haves.” The protests that have erupted in some European countries because of proposals to reduce or eliminate selected benefits and entitlements demonstrate how attached recipients have become to them. Interestingly, these protesters were very angry over these losses rather than grateful that they had enjoyed such generous benefits for decades. They felt they were earned even though others, including future generations, were or will be saddled with the cost.

Intermediate-term and capital investments for such items as road and bridge construction and repair, public transportation, high-speed rail, parks, and other public works projects will need to be curtailed or postponed because there is too little money to pay for them. The recently cancelled construction of a needed train tunnel between New Jersey and Manhattan is just one of many examples. Over time, infrastructure will deteriorate and our quality of life may be diminished.

Long-term pensions and retirement promises were made to public employees – all to paid later without contingency planning in the event financial projections were well short of the mark. And in tough budgetary times, fiscally necessary contributions were skipped in the hopes that future years would be more abundant. Frequently the money that should have been contributed was spent elsewhere. For example, politicians talked about “trust funds” as if they actually existed for Social Security and Medicare, when in fact much of the money that should have been set aside for them was channeled to other “priorities.” They also continually ducked responsibility for making structural adjustments to account for changes in demographic realities and longer life expectancies. Hard choices were continually deferred or politicized. The result today is that the promises remain but sufficient money is nowhere to be found. This is now a huge unfunded liability.

The enormous debt and commitments that have accumulated over decades is now coming due. It’s the younger generations that will be burdened with them, probably through higher taxes. Ironically, while they will be paying more than prior generations, they will also be offered fewer and less robust benefits.

This is an incredible dilemma and reflects on the short term focus of our governments and the dysfunctional values of government leaders. It seems to have been caused by a pervasive attitude of “spend today and worry about tomorrow tomorrow.” Pandering to special interests and the demands of vocal groups ruled the day. Now we are in a bind with no easy or pain-free way out.

Individuals, families, businesses, nonprofits, and governments have an essential responsibility  to balance our short, medium, and long-term needs and priorities. Otherwise we are sacrificing the future for the present. We must demonstrate the wisdom, courage, and foresight to plan and anticipate the needs of the future and to ensure we can fulfill the promises we make.

I do not know the best way to get ourselves out of this mess. I’ve seen and heard various plans and ideas, all of which will require sacrifices from just about everyone in the country. What I do firmly believe is that the officials responsible for creating this unfortunate situation must take responsibility and accountablity for getting us out. And the generations that benefited from them should support the tough decisions and hard choices that need to be made, even if it hurts far more than we would like. We need to charge our elected representatives with this task and not allow them to run from it. Only then will we show our true character.

Our integrity and credibility are at stake . . . along with the world we leave our children. We must create a different future and “bit the bullet” when we need to.

*          *          *

Steve Weitzenkorn

Steve Weitzenkorn, Ph.D., is a learning innovator, organizational advisor, experienced facilitator, and lead author of Find-Fulfill-Flourish: Discover Your Purpose with LifePath GPS – a book, website, and workshop series focused on guiding people toward more meaningful and fulfilling lives.

If you enjoyed this post, you may also be interested in “Acquiring Wisdom from the Lessons of Life”

We post every Monday, Wednesday, and Friday.

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2 Comments leave one →
  1. July 18, 2013 11:46 am

    Does the owner of this web page have a Facebook account that we could be connected with?

    Would be good to get in touch and find more of your writings, cheers!

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