Economist pins presidential hopes on fixing finances

Richard Burr
The Detroit News

Laurence Kotlikoff is an economist running for president to fix the nation’s and Detroit’s financial problems, but Michigan voters won’t see him on their Nov. 8 ballot.

Still, write-in votes for Kotlikoff, an economics professor at Boston University and a fellow of the American Academy of Arts and Sciences, are not wasted votes. Michigan will officially count any votes for him and two other registered write-in candidates.

Kotlikoff said he is running to make systemic reforms to the country’s finances, which include an overall $199 trillion “fiscal gap” of unfunded liabilities going seven decades into the future.

“I’ve been watching the slow demise of our country ever since I became an economist,” the 65-year-old Massachusetts resident said in a recent phone interview. “...The country is literally broke, and that fiscal gap has to be eliminated.”

Kotlikoff’s campaign has an uphill climb since he hasn’t visited Michigan and is relying more on social media and Internet buzz. But he some familiarity with Detroit metal as the owner of a stick-shift 2015 Jeep Patriot in addition to an older Mazda Miata.

Kotlikoff isn’t a normal reformer. He co-wrote a book titled “Get What’s Yours” on the difficulty of calculating the maximum benefits to which workers are entitled from the Social Security Administration.

He puts the “grave” financial problems of Social Security in stark relief. The social program for the elderly technically won’t go into the red for about two decades, but he says the underfinancing of Social Security is even worse than the woefully underfunded Detroit pension system that helped send the Motor City into bankruptcy in 2013.

The spending promises are the result of politicians willing to take money away from future generations to get elected, Kotlikoff said.

“For six decades, I have seen them selling out their kids in order to get voted in by the older generations,” said the co-author of the 2012 MIT Press book, “The Clash of Generations.”

Kotlikoff proposes an 11-point plan that would freeze the existing Social Security system and not hurt current beneficiaries. It would require all workers under 60 years old to pay 10 percent of their wages into “Personal Security Accounts” in addition to the 12.4 percent they and their employers pay in Social Security taxes because that’s how much politicians have overpromised on elderly benefits.

The private accounts would be invested in a global market-weighted index fund of stocks, government bonds, corporate bonds and real estate trusts. A government computer would run the program at no cost and with no involvement of Wall Street firms and their customary fees.

Kotlikoff has a similar outside-of-the-box approach to further reviving Michigan’s manufacturing industry. He notes that the United States has the highest marginal tax on corporations in the developed world, but it has so many loopholes that it generates little revenue.

“I want to make the tax rate 0 percent so companies come here in droves, and open up closed factories in Detroit,” he said, adding that food stamps could be offered for free in cities to encourage more people to move here.

Kotlikoff describes himself as a reasonable reformer “who gets along with Republicans and Democrats” and provides an alternative to other candidates. He took a political dig when asked why he is preferable to the more recognized Libertarian presidential candidate Gary Johnson and Green Party candidate Jill Stein, who get a combined 10 percent or more support in Michigan polls.

“We won’t pick someone who is for no government and someone who is for all government,” he said.

But it all comes back to finances and generational politics for the recently remarried father of two sons and a stepdaughter.

“I’m the only person who stands between Clinton and Trump and the future of our kids,” Kotlikoff said.