Quote :

"I missed the proposal that all private acccounts would contain a 100% weighting in equities, of which is to be bought within a year of retirement. "

Exactly. If you invest like a greedy retard, you are taking a chance on getting severely burned. If you play it smart, it's like having more money to invest in your 401k or IRA instead of using it to drag the Social Security anchor.

Quote :

"It was almost our bad, too."

No, there's no "our". The "their" is referring to people who got greedy (or were too lazy to do 15 minutes worth of research) and invested in fucked-up asset allocations. It has nothing whatsoever to do with privitizing SS (or the Italian equivalent) other than doing so gave them them the opportunity to fuck themselves, which a few people did. If you aren't an idiot, you'd benefit.

Quote :

"By one spot, I assume you mean the private market?"

Holy fuck, you really have no idea what you're talking about, do you? What if you opted to put your money mostly in some low-risk bonds and some treasury bills?

I mean, I don't even know how to start arguing with you on terms you're going to understand. We need to have some Personal Finance 101 time before we even start discussing privatization of SS. In the meantime, you ought to stop spouting off about things you clearly have no grasp of.

Besides, if you're painting with that broad of a brush, I'd rather have all that money in "one spot" defined as "broad diversification of different classes of stocks, bonds, and real estate investments" than "one spot" defined as "a fucked-up program administrated by an inefficient-at best federal government who's subject to the whims of politicians and majority rule of uninformed voters."

Quote :

"Expensive things are bad. Always. No exceptions."

Speaking of which, you know what might be smart? Phasing out Social Security. Allow opt-outs to anyone who wants it, with the caveat that whatever money you've put in is gone (and close the system to everyone below a certain age). It would cost a ton of money up front, as the taxpayer would have to ante up to honor the SS payouts until all the old participants were gone, but then we'd be done with it and free from the albatross around our necks (both personally and as a country). It's going to hurt, but we might as well get it over with, and it's a helluva smarter use of money/debt than, say, the automaker bailout.

Quote :

"^ good point. That way you can lose 50% of part of your money, 40% of some of your money, and only 30% of the rest of your money!"

Quote :

"Which of these would not be tanking right now? Between double digit decline in real estate and stocks, and 1% interest treasury bonds, you're screwed. If you're diversified, you're being screwed in diverse ways. "

It appears that the two of you fundamentally do not understant investing.

You don't need to make money during recessions. It doesn't matter if the stock (or stock and real estate) portion(s) of your portfolio take a hit. I'm simplifying here, but if you are going to need the money in the next, say, 10 years, you don't have it in stocks. At 29 years old, all of my money is in stock (other than a cash reserve). At 55, you'd have a FAR smaller position in stocks (and they'd be largely more conservative stocks such as dividend-paying blue chips), with a lot of bonds, more cash, and maybe some real-estate based investments (REITs, etc).

If your stocks are falling hard, and you're close to or in retirement, then spend money from your bonds, or even your cash reserve. That's exactly why you have relatively more of them as you get older. After a little while, the stocks shoot back up, and then you rebalance.

I may have already lost you two. That's fine. Just realize that you don't understand this stuff, and therefore shouldn't even have an opinion on it, much less try to argue your case. Also, don't even start with the line about "Well, that's great that you know all this stuff, but what about the majority of dumbasses who don't?" My answer: targeted retiremend funds. One-stop, idiot-proof shopping. If you are willing to put forth a tiny bit of effort in learning a few things, you can tweak things a little to suit you beyond that with some other holdings.

I will be more than glad to discuss investment to build up a baseline amount of knowledge, but not in this thread.

Quote :

"What inherent advantage does SS have over private accounts in this respect? "

Exactly.

I don't understand how to convey this to them, though.

Quote :

"I'd be an enormous assumption to assume most retirees have ____________ in retirement. Most people depend greatly on SS."

He's saying that in a private account in lieu of Social Security, a retiree would have mostly cash and treasuries in retirement. These holdings, along with a few conservative bonds and dividend stocks, would be just as good as Social Security, except that the retiree in question would likely have more money (and thus more income) to begin with due to the greater returns throughout his lifetime in the private account vice SS.

Quote :

"20-something college graduates are so hilarious. "Screw everyone else but me. Life is a zero sum game. If you're not making $75k+/year, you're lazy and stupid, and in a just world, your family would starve." "

NOBODY IS PROPOSING TO SCREW ANYONE

also

YOU DON'T NEED TO MAKE EVEN $75k/year TO ACCUMULATE A SHIT TON OF MONEY.

Quote :

"You can privatize social security and still maintain the same level of risk, if that is desired."

Yes, thank God, it's so obvious to me, but I couldn't think of such a straightforward way to say it.

Quote :

"something only the wealthy can now afford via supplementary private accounts."

Minor point to make here: You goddamn well better have those "supplementary" private accounts. That's not just something for the "wealthy". It's something for everyone who isn't flat broke.

Quote :

"Retirement insurance, ideally. "

That's available on the private side, too. It's called an "annuity".

It's also generally recognized as a waste. (Hint, hint.)

Quote :

"the likely 0% return on investment for many young people on their investment into the current social security system "

Minor point again: you mean -100% ROI, not 0% (as a worst case).

1/7/2009 9:33:41 AM

For those who oppose private accounts, explain why you prefer SS in its current form.

A) Do you do not wish to let people have a legal claim to their assets?
B) Do you not think they would be “safe” enough?
C) Other

If A, is this because you prefer the redistributive effects of our current system? If so, this changes the argument completely.

If B, you have misunderstood the previous posts showing how private accounts can be adjusted to have the same risk profile as SS.


[Edited on January 7, 2009 at 10:26 AM. Reason : .]

1/7/2009 10:25:01 AM

Social security should be need-based.

* Ducks for cover *

1/7/2009 10:32:15 AM

Quote :

"That's ludicrous. SS payout is progressive in nature. Given a set savings rate, low-income people are much better off with SS. There's no way you can tell me that the majority of poor people wouldn't out-live their private savings. Then where would they be?"

Bullshit. SS payout is progressive only because contributions are capped and only if the two individuals in question die at exactly the same age. I'm sorry to say, the rich tend to outlive their poorer brethren. As such, the rich paid in less, get back more, and collect it for even longer. Overall, neither individual gets back every dollar they paid in, nevermind interest, but the rich on average get a better rate of return than the poor.

So, yes, SS payout is progressive in nature, regressive in practice, combined with a SS tax that is pure regressive.

However, to keep people off the street, these are my sensible proposals:
1. eliminate the regressive payroll tax - fund the system from general revenues
2. define the benefits - everyone that collects SS should receive exactly the same size check, rich and poor alike, eliminating the confusion over what benefits can be expected

Any one of these would, of course, eliminate any semblance of the retirement system myth, letting everyone finally understand once and for all these are welfare payments, not retirement accounts, putting the entire SS system at risk politically (Americans apparently find receiving welfare checks insulting), as such the republicans will vote for it and the democrats will demonize it.

1/7/2009 11:09:02 AM

The fact is SS in its current form isnt fiscally solvent.. END of discussion. It assumes that the population and work force grow consistantly and the govt spends your SS dollars on other programs and leaves an IOU for the rest. With the way our govt is spending money how can anyone not argue against this disaster.

Boone and Joe like to think Im only concerned with myself. However, Im looking more towards the long term future of this program and nation. Something needs to be done with these entitlements. I think privatizastion is a great idea. the money is YOURS and upon YOUR death you choose where your money goes to. After several generations people will have weatlh built up even with below average incomes. We can allow for.. gasp... choice for the younger generation to opt into private retirement accounts, but still fund current retirees with your employers match. So basically we would only be getting half your money in your account. IN order for this to work, we would have to raise the SS age further and forbid the govt from spending surplus.

1/7/2009 11:18:36 AM

Quote :

"2. define the benefits - everyone that collects SS should receive exactly the same size check, rich and poor alike, eliminating the confusion over what benefits can be expected"

very easy and makes a lot of sense. gg.

1/7/2009 11:21:13 AM

Quote :

"1. eliminate the regressive payroll tax - fund the system from general revenues 2. define the benefits - everyone that collects SS should receive exactly the same size check, rich and poor alike, eliminating the confusion over what benefits can be expected"

thats bullshit; those paying most into the system aren't the ones that need help with retirement if they even see a cent of money.

Those who lack the responsibility to save and are often correlated with low income earners the winners here and get to retire off the hard work of others.

1/7/2009 12:26:50 PM

Well, to be fair, the interest paid to savers for saving is not autonomously earned. When you collect and spend the interest earned off your savings you are in effect living off the efforts of those paying interest on their loans from the internediary bank. There is a real difference in that the promise was voluntary and that you indeed gave me something in exchange for me supporting you (money yesterday for money+interest today), but you are indeed living off my labor. Playing sematics I be, so be it.

1/7/2009 12:58:12 PM

Quote :

"everyone that collects SS should receive exactly the same size check, rich and poor alike, eliminating the confusion over what benefits can be expected""

As it is now, your SS tax is capped as well as your benefits. So bill gates and I pay the exact same amount in SS tax per year. And if we both retired today(assuming we worked the same amount of time) then we would collect the same amount.

The caps are the only thing that prevent SS from being another welfare system.

[Edited on January 7, 2009 at 1:48 PM. Reason : .]

1/7/2009 1:43:05 PM

Yes. I know. But the man down the street that has been unemployed his entire life and only worked at McDonalds for a few years should receive the same pitance that Bill Gates receives upon retirement. Yes, it will still be regressive, as Bill Gates is still going to live longer and therefore collect for longer, but otherwise the incentives for everyone to save for their own future is corrected while giving those that could care less about their retirement something to keep hanging their hat on. The payment that everyone receives should be roughly equal to a reasonable poverty line and indexed to inflation.

Over time, productivity will eat away at this expense (as the average standard of living improves SS payments will remain stagnant) so whatever happens demographically in the future the system should be sustainable forever.

1/7/2009 1:57:01 PM

Quote :

"McDonalds for a few years should receive the same pitance that Bill Gates receives upon retirement."

Something does not seem right about this....

So bill gate paying 6.5% of $90,000 for 40 years gets stuck subsidizing the retirement of countless McD's employees b.c they'd rather buy Timberlands than save for retirement or choose that extra 4th kid they couldn't afford

1/7/2009 3:24:40 PM

Consider it a reverse pole tax.

1/7/2009 4:38:23 PM

I disagree loneshark. The more you put in the more you should collect, its not that hard a concept.

1/7/2009 5:02:21 PM

Has there not been old people for 1000's of years; and I don't think they just rotted on the streets b.c the gov't was not providing their retirement plan.....

[Edited on January 7, 2009 at 5:11 PM. Reason : l]

1/7/2009 5:10:36 PM

Well, as it stands now we'll all get the same amount... ZERO because the system will collapse. I'm somewhat surprised that people choose to ignore the elephant in the room that is the impending collapse of the SS system. How has some politician not run on the platform of eliminating social security by making the argument that if you are below the age of 40 you have had 7.65% of your earnings stolen from you and will never see them again (along with a tax on your employer for the same amount that could potentially be used to either improve profitability or wages and grow the business)? This seems like it would be a pretty powerful main plank of one's agenda that the younger populace might support.

1/7/2009 8:14:33 PM

am i reading the date of this thread right? this was made january 6th right? cause the shit is like 4 months old

1/7/2009 8:37:54 PM

Quote :

"I disagree loneshark. The more you put in the more you should collect, its not that hard a concept."

I think that it is, because it presumes some tangible connection between what you put in and what you will be taking out. There is not. The only connection is what Congress decreed it would be. Neither you nor the individual receiving your money, or the individual that will be sending you their money (never the two shall meet), ever negotiated or agreed to the terms of this arrangement. The only party involved in creating this arrangement were Washington politicians, as such the only measure that matters is what they are willing to vote in favor of. It is entirely subjective what reasoning is used to design the system; as such, my reasoning (sustainability and marginalization) are no less defensible than your prefered reasoning (uniform rate of return).

If your personal goals are to have SS mimic an investment bank, then having the government do it is counter productive; just go to fidelity.com to achieve your uniform rate of return.

If, instead, the personal goal is to boost the living standards of the old and handicap then a uniform rate of return is counter productive, even down right destructive, as it diverts resources away from private sector savings to grow the size and impact of the government without helping to achieve the stated goal.

1/8/2009 12:49:56 AM

if the government wants to create another welfare program to help people who dont prepare for their old age then whatever. but lets at least stop pretending that it is designed for 'everyone' and call it what it is.

1/8/2009 8:04:13 AM

Quote :

"I'd be an enormous assumption to assume most retirees have ____________ in retirement. Most people depend greatly on SS"

That most people depend on SS is the problem. If gov't hadn't sold those people on the idea that SS would take care of them, then maybe, just maybe, they wouldn't be dependent on it. Call me crazy...

Quote :

"Even with the market tumble you will come out ahead over the likely 0% return on investment for many young people on their investment into the current social security system"

Oh, it's not a 0% ROI. It's a -100% ROI.

Quote :

"If people are living longer, then why can't people work longer? Raise the retirement age to 70+. Wouldn't that help a lot?"

HA! Yes, comrade, work longer!

Quote :

"Well, as it stands now we'll all get the same amount... ZERO because the system will collapse. I'm somewhat surprised that people choose to ignore the elephant in the room that is the impending collapse of the SS system. How has some politician not run on the platform of eliminating social security by making the argument that if you are below the age of 40 you have had 7.65% of your earnings stolen from you and will never see them again (along with a tax on your employer for the same amount that could potentially be used to either improve profitability or wages and grow the business)? This seems like it would be a pretty powerful main plank of one's agenda that the younger populace might support."

It's simple, really. The elderly are a HUGE voting bloc. The moment anyone even begins to suggest changing or eliminating SS, AARP starts slamming commercials down our throats about how evil government is gonna take away your SS check and make you starve, thus putting an end to any attempt to change things. This is, frankly, the platform of the democratic party: make as many people as possible dependent upon the government so that the government can control as many people as possible. Don't believe me? Look at blacks, look at welfare, look at SS, look at SCHIP, look at medicare, look at medicaid, and look at how they've fucked up healthcare.

1/8/2009 8:23:59 AM

Quote :

"Holy fuck, you really have no idea what you're talking about, do you? What if you opted to put your money mostly in some low-risk bonds and some treasury bills?"

By italicizing "the private market," I thought I was making it clear that I was painting with a broad brush.

The fact is, if we had privatized when Bush wanted us to, we would've been hosed. Do you think all these extremely prudent and risk-adverse people in the financial sector would've handled our money wisely, or would they have simply fueled the housing bubble for a couple more years? But it's chill, because the investment managers would've move our retirement into bonds after having lost 1/4 of it, rite?

What are the odds we'd be bailing-out/re-socializing social security right now if Bush had gotten his way?

Quote :

"It has nothing whatsoever to do with privitizing SS (or the Italian equivalent) other than doing so gave them them the opportunity to fuck themselves, which a few people did. If you aren't an idiot, you'd benefit."

Tell me, honestly-- what would be the ratio of self-fuckers to benefiters if we were to do what the Italians did? This leads me to:

Quote :

"What inherent advantage does SS have over private accounts in this respect?"

Which you basically just answered for yourself.

1) If we were to take away SS, would the average American use the savings to invest in their retirement, or to simply increase their spending? Assuming we can all agree that letting dumb people starve is a bad thing for all of us, then we'd just end up having to pay for their food and shelter anyways, and probably using a cobbled-together method that's even less efficient than SS.

2) I imagine as a solution to (1) you'll suggest a program that requires people to save X percentage each year, but allows them to invest X wherever they want. I'm not altogether opposed to it, but let's face facts; the gov't has shown that both parties will bail-out large-scale stupidity, which is sure to happen when some people are allowed to crank their risk to 11.



I'm curious if we even share the same goal-- do you disagree with the premise that every American should have a 100% certain plan for basic subsistence in their retirement years?

1/10/2009 11:12:19 AM

Quote :

"1) If we were to take away SS, would the average American use the savings to invest in their retirement, or to simply increase their spending?"

SS has not always existed, and back then it took far more work to pay for basic necessities to avoid dying of exposure and starvation. And yet Americans back then managed to arange their affairs to avoid dying in such ways. That you seem to believe human beings are too stupid to keep themselves alive is troubling and hints that you have bigger issues to address in your own life than SS.

Quote :

"The fact is, if we had privatized when Bush wanted us to, we would've been hosed."

And if we privatise SS right now, we will all be golden. That said, if we had privatised when Bush wanted us to and you put all your money into bonds then you would be enjoying a significant return on your money right now.

Quote :

"I'm curious if we even share the same goal-- do you disagree with the premise that every American should have a 100% certain plan for basic subsistence in their retirement years?"

No one does. But we seem to disagree on the definition of the concept "basic subsistence". Basic subsistence to me means a cot in a homeless shelter with two meals a day, and we have that in spades without SS or any other government program. Check out the homeless shelters downtown next time you get a chance. They are not comfortable, but they will certainly keep you alive.

It seems to you that basic subsistence means a three bedroom house on the beach with plenty of parking so the grandkids will want to visit. Well, the only way to guarantee that for everyone, no matter how self destructive, is government.

And yet, you are not even doing that: because the current SS system pays in proportion to your income, which is not much when your income has never exceeded the poverty line. As such, the system you are defending does not even satisfy your own expectations for basic subsistence. The current SS system gives lots of money to those that have been middle class their entire life and have huge nest eggs lying about and very little to those that do not.

SS is not basic subsistence; it is class warfare.

1/10/2009 11:57:51 AM

Is this thread still about privatizing social security?

Because as recent events show, that would have been a terrible idea.

I guess the question is now though, what do you do about SS? The current system is obviously doomed to failure, so something must change.

2/23/2009 6:32:02 PM

Right now would be a great time to give younger people the option to privatize their social security payments.

2/23/2009 6:41:48 PM

Quote :

"Basic subsistence to me means a cot in a homeless shelter with two meals a day ... [Shelters] are not comfortable, but they will certainly keep you alive. "

and YOU are an ill-informed jackass.

homeless shelters will keep you barely alive, but not for long.

now how about you stick your goddamn father and mother in there, when their unexpected illness or accident wipes out their entire life savings. and/or when the stock market tanks.

I swear to god, you stupid libertarian chucklefucks need to listen up: THIS is why you continually never get more than 0.5% in a national election, and why you never will.

2/23/2009 6:44:16 PM

I wonder if having a larger amount of money put into the private sector vs. pulled out of people's checks and redistributed to the elderly might have helped our economy?

Seriously though, unless you're over 40 you would be better off with a pittance in private investment vs. expecting your full return on SS. You aren't getting a friggin' penny out of SS, just go ahead and accept that now. If you invest prudently (limit risk as you get closer to retirement age, diversified holdings, etc.) you'll still be just dandy without SS.

2/23/2009 6:44:52 PM

Quote :

"I swear to god, you stupid libertarian chucklefucks need to listen up: THIS is why you continually never get more than 0.5% in a national election, and why you never will."

And, as we have learned from both yourself and Nancy Pelosi's clowncar circus, we've learned another lesson: "You'll Never Go Broke Underestimating the Intelligence of the American Public." Little more needs to be said.

2/23/2009 6:46:59 PM

Considering the fact that Social Security is going broke and there is no serious plan to fix it, privatization should be considered. It's nothing but a Ponzi scheme whose day is about to come. But, if it was privatized people would actually have assets to call their own and liberals can't have that because their means of staying in power is keeping folks tied to Uncle Sam's tit.

2/23/2009 7:13:44 PM

Quote :

"Considering the fact that Social Security is going broke and there is no serious plan to fix it, privatization should be considered. It's nothing but a Ponzi scheme whose day is about to come. But, if it was privatized people would actually have assets to call their own and liberals members of either major party can't have that because their means of staying in power is keeping folks tied to Uncle Sam's tit."

Essentially this is correct, I just fixed one glaring error. The republicans long, long, long ago stopped being a party based on fiscal conservatism and smaller federal government.

2/23/2009 7:22:23 PM

That is true, but I do not identify myself as a Republican. They sold out their principles long ago.

2/23/2009 7:24:32 PM