Long ago I saw a great cartoon by S. Harris.  Two scientists are reviewing a mathematical equation on a chalk board.  One says to the other “I think you should be more explicit here in step two”.  The entire equation appears to be complex math but step two simply says “Then a miracle occurs.”  

This spectacular cartoon really struck a chord with me.  I owned a small consulting firm and our primary business was implementing General Ledger Software for large insurance companies.  Very often, we were trying to save projects that were in a lot of trouble.  These were not three day, get off the plane with a briefcase, and say something smart engagements.  They were big, twenty man year, efforts under great duress for timing and success.  Frequently, we got the call because the implementation team was in distress and we had a track record for making these systems work.  

Very often, the project was floundering because no one could figure out how to design and implement a critical system component.  Instead of solving the problem and creating a comprehensive design that would work from beginning to end, the project team simply bypassed the issue.  They inserted a  “Then a miracle occurs” step and moved ahead to other aspects of the implementation.  Down the road, the implementation team realized that there may not be a solution to the “miracle” step or there may not be a solution that will work with everything else they had designed.         

Our consulting methodology was simple.  If we could not design a solution that addressed every aspect of the desired functionality, we could not move forward.  If we can’t design it, we can’t build it.  Building takes a lot of time, effort, and money.  We aren’t incurring any building costs without a rock solid design. 

Miracles are truly acts of a Supreme Being and we never saw very many of them in our business.  We had to know that we could make the software solve the client’s problem, with no Divine Intervention, or we did not get past “step two.”  I bought tee shirts with Mr. Harris’s cartoon for my consulting team.

Unfortunately, the “Then a miracle occurs” methodology for problem solving has become very popular and very common for Americans.  Here are a few examples.

“Then a miracle occurs” with my student loan.  

Like it or not, student loans have major financial impact on many Americans.  Many students do not treat them with the respect they deserve, however.  I have a friend who borrowed $80,000 to attend college.  He was able to avoid working while in school and even had sufficient cash to buy a fine guitar and surf board.  He was adamant that college days were not all about studies.  He needed to expand his social horizons as well.  Eventually, he stepped out into the working world with a BS in Psychology, a 2.6 GPA, fond memories, and $80,000 of debt.  Each year in school I would ask if he thought his higher education was going to provide sufficient income to pay back the loans and support his Bohemian lifestyle.  His response, “No problem.  I’m going to make a lot of money.”  “Then a miracle occurs!!” 

Now that he is five years past graduation and working as a Barista (truly a great and enjoyable job for him), he complains bitterly about the inherent inequity of student loans.  He should not be required to shoulder the odious burden of this kind of debt, especially at his income level.  All student loans should be forgiven.  Why, even bankruptcy may not resolve his student loan debt!  How unfair! 

Unfortunately, barring a direct act from the Almighty, there is no easy solution to my friend’s problem. There is absolutely nothing wrong with working at a job you really enjoy for lower wages.  However, when you’re designing your life, you better not ring up $80,000 in student loans if you are not planning on sufficient income to repay them.        

I have another acquaintance who is solving the student loan challenge very creatively.  Her job and lifestyle have made it impossible to repay her student loans.  She is 70 years old and has been a full time student for more than 50 years.  Obviously, she loves school and can attend evening classes.  Because she has always been more than a “half time student” as defined by the Federal Government, she has not triggered the requirement to begin repaying her loans.  With compound interest, the loan balances must be staggering.  I asked if she will ever start making loan payments.  She said, “I intend to die as a full time student.  I never plan on making a single payment.”  50 years as a full time student is a little extreme but it does solve the loan dilemma and is not “Then a miracle occurs.”  It is a planned solution that works for her. Ultimately, the loan burden will pass to someone else in the form of higher interest rates to cover defaults.

On a macro basis, student loans are a massive problem.  According to the Federal Reserve, total student loan debt on March 31, 2023 was $1.77 trillion second only to mortgage debt.  So if somebody short of God Almighty bails out the students, it would probably have to be the United States Government.  Not a lot of people with pockets that deep.  If congress decides tomorrow to pay off all the student loans, they have to come up with 40% of all the 2023 tax revenues for this single expenditure.         

“Then a miracle occurs” with my retirement account.

Far and away, the best example of “Then a miracle occurs” methodology in our country is retirement planning. 

In November 2023, Forbes determined that the average retirement savings for Americans aged 50 – 59 is $175,400.  This will generate a monthly retirement income of $878.  Let’s say that these Americans made enough to maximize social security contributions for most of their working lives.  That may add another $2,500 per month to the pot.  Retirees in this group may have to live on less than $40,536 of income per year.  If they maximized social security contributions they have been accustomed to six digit income for a long time.  Clearly, their standard of living is going to take a giant step backward.  

Many of my friends are in this boat.  What is amazing is that it has always been very easy to determine how much funding is required for a comfortable retirement. For example, if a 23 year old contributes $5,500 a year into her or his IRA and earns a 6% overall return, they will have $1 million in the account at age 65.  Using the 6% assumption, this would generate $5,000 per month without ever taking out any of the principle.  A much better income number than the current average of $878 per month.  Add in the $2,500 per month Social Security Benefit and annual retirement income is $90,000.

Okay, your saying “How can a 23 year old put $5,500 into a 401K?”   Easily.  At 23, I am going to find a job that pays at least $50,000 per year.  With a few months training I could learn to drive a truck and make $60,000 to $80,000.  That $5,500 contribution is going to get a lot smaller.  First, I am absolutely, going to find an employer that matches my IRA contribution.  Now I only have to put in $2,750 a year.  Second, my IRA contribution is tax deductible.  At a 20% tax rate, Uncle Sam is going to pay another $550 of the annual amount by lowering my taxable income.  For a mere $2,200 a year I have the retirement challenge covered.  That’s less than the cost of my annual pilgrimage to Las Vegas. 

Anyone can get this financial information from the internet with less than an hour of effort.  Why have so few Americans done this?  Why have so few people engineered their way into a situation that will help them cover their retirement needs?  For many years I have talked with friends who say “I know I should start funding my retirement account but I really don’t have the money right now.  The Beemer lease payment is putting the squeeze on me.  I’ll double up next year.  I can work this out.”  “Then a miracle occurs.”  Retirement funding, with small, reasonable contributions, only works if you start when you are young, contribute every year, and let compound interest build your nest egg. 

The tax laws regarding retirement funding are the best benefit that the government has ever offered to US citizens.  You make a deposit in an investment account and actually get a tax deduction for simply saving your own money.  Earnings on the principle are not taxable until you withdraw the money after retiring.  Tax wise, it does not get any better than this!!  

Nothing is easier to compute, easier to plan for, and easier to fund.  Yet, the average retirement savings for men and women aged 50 – 59 is $175,400.  Again, we need real intervention from a Supreme Being to help these folks retire comfortably.                           

“Then a miracle occurs” with legalized marijuana.

Legalizing marijuana has become a very popular social issue.  Most Americans favor legalizing the drug for both medical and recreational purposes.  Competent adults should be able to use cannabis, without criminal repercussions, just as competent adults use alcohol.  “I live in Colorado.  Marijuana is legal.  I can enjoy the drug with no consequences!”  “Then a miracle occurs.”

Although marijuana use is legal in Colorado and other states, so is drug testing by employers.  In fact, for many occupations, drug testing is required by law.  DOT says that you cannot drive a truck, bus, train, ferry, or plane if you can’t pass a drug test.  You can’t be a mechanic for public transportation equipment, you can’t be an air traffic controller.  You can’t build roads. These rules apply to government employees and any contractors who perform similar tasks.  56% of companies in the United States have drug testing programs to ensure that their employees are fully functioning when they are on the job.  Supposedly, the biggest log jam with improving Florida’s highway infrastructure, is finding construction workers who can pass the mandatory drug tests.  Legalized marijuana in Florida is not likely to make the pool of prospective workers any larger.

In the private sector, testing programs are not, simply, altruistic initiatives by responsible employers.  Most of the time they are requirements that the companies cannot avoid.  They are required by the insurance companies that underwrite liability insurance for these employers.  Amalgamated Property and Casualty is not going to sell a policy to Acme Bridge Construction, Inc. in Denver if they discontinue testing steeple jacks for marijuana usage.  In essence, if the company does not ensure safe working practices by their employees, they cannot buy liability insurance. In litigious America, Acme is not moving forward without insurance.  One claim and they will lose their company. 

A key problem with drug testing (and very possibly with the drug) is that marijuana has a long residual marker.  Depending upon the level of usage, someone may fail a drug test weeks or months after they last used the drug. 

So steeple jack Bob, in Castle Rock, may be getting real relief from the high stress of building bridges with a soothing brownie every evening and find himself out of a job with the next random drug test.  This conundrum is not going to disappear.  It may be legal to use marijuana.  It is also legal (and in many cases mandatory) for employers to fire all employees who test positive for doing so.

Summary

In one small cartoon, S. Harris captured the methodology so many of us follow in modern America.  If something is complicated or painful, let’s not address it right now.  We have most of the answers or at least some of answers.  We have a lot of skill and daring.  We can handle anything that comes along.  The law of limited resources is way over rated.  The government will bail us out.  Let’s get moving.  We don’t need a stinking plan! 

This line of thinking created a lot of profits for my consulting business when my clients realized it doesn’t work.        

“Then a miracle occurs.”  Whether or not you believe in a personal God you have to admit that we have not seen a lot of concrete evidence that miracles are occurring for any of these challenges.