Deep Dive – Original Thoughts #34 – Does the President of the United States Get Paid Enough?

This thought surrounded the realization that in modern politics the politician who wins ends up leaving office much richer than when they entered office, yet they make much less than many private sector jobs.

Actually, the thought came from many places – how do you make the powerful politicians incentives align with the best interest of the people? It seems they are too often busy enriching themselves though direct means (insider trading, generating lucrative exit opportunities, or even actually accepting money directly or through close relatives). Or though indirect means like perpetuating their own power by fundraising and currying favor.

Also, how do you properly incentivize the people who are actually successful in the private sector to give up their positions and serve the public? In addition how do you convince them it is worth it when EVERY SINGLE POLITICIAN and their close family and friends get scrutinized, threatened, and dragged through the mud by people and entities with opposing interests? It sounds like a terrible thing to put your family though.

The only way I could think of that would actually incentivize the politicians is if they were paid more than private companies, with strict term limits. So how would this be done?

One concept is the lottery. The lottery is currently used to raise money for state government education and other programs.

In 2023, US citizens spent $113B on the lottery, which equates to about $338 per person per year. What if, at the highest level, the salary of the President was not a guaranteed number, but an interest in a lottery. Let’s say, the President gets 49% of a quarterly lottery, the lucky winner gets 50%, and 1% gets set aside for administration. Then the President has some real incentive to create approval. It is also taken out of annual budget, and for popular Presidents, could represent a fortune beyond anything they could get through currying favor with special interests.

Here is a scenario – a president just gets elected and in his first weeks people are hopeful. At least 51% of the population that actually cast votes (156M for the 2024 presidential race), or 79M people got who they wanted. Annually, about 50% of the of-age US population plays the lottery, so applying that to the people who voted for the incoming candidate gets you 39.5M people who are likely to buy these tickets. At $1 each, that would bring in $39.5M of potential proceeds, 49% of which would go to the President, or $19.3M IN ONE QUARTER. That is more than they would make during 35 years as President or 8.7 terms. Now multiply that by 16 and a popular one-term President would make $308M during their presidency. That is enough money for almost anybody in the world to be enticed to pursue the job.

In addition to being incentive based, that $308M would come directly from supporters but with no way for one special interest to contribute enough to get the same kind of favors they may get by, let’s say, booking a $250k speaking engagement or publishing his book for several million dollars (although just looking it up, the Obamas book deals in 2017 were worth upwards of $65M which is BONKERS).

Now apply this lottery concept across several pieces of our government – such as a “senator lottery general fund” where you put money into a bucket for ALL SENATORS no matter the political affiliation. If the US population sees them playing politics but not getting anything positive done than it is likely they wouldn’t get much from this lottery, however if they were efficient, performed well, and in the best interest of the United States, they could make some real money.

Anyway, it is a new way to look at how our politicians are incentivized and I think could reshape the grift and grime that happens in today’s political sphere. Let’s put some faith into the human nature described as – “show me the incentive and I’ll show you the outcome”.