08-12-2004 02:47									#61
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I think it has more to do with not trusting you guys. Conservatives lie, unless its useful to tell the truth.

	08-12-2004 02:51									#62
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SSI has nothing to do with forced savings, it is just another badly thought out wealth distribution plan envisaged and supported by socialists.

	08-12-2004 02:52									#63
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And it works. It's the most successful anti-poverty program ever.

	08-12-2004 02:54									#64
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Thats not saying much.

	08-12-2004 02:55									#65
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As stated, it started out as wealth redistribution toward the poor. Now it's redistributing wealth toward the rich! The current system should be anathema to all lefties.

quote: It's the most successful anti-poverty program ever.

It's taking from the almost poor and giving to the old poor and old not-so-poor. Where's the justice in that?

	08-12-2004 03:08									#66
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quote: Originally posted by Japher GePap: It's hard to believe a reporter when everyone else is saying there is no money in some secret account meant for SS retirement. If there were, than why all the recent tax defered retirement savings accounts? Why do they keep pushing back the retirement dates? That ain't just the big cheese being nice or stingy. They know there is no money.

Krugman is an Economics Professor at princeton.

And Krugman answers your question- the people implementing these systems hate SS (except for the increased age-that is simply common sense)

	08-12-2004 03:10									#67
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quote: Originally posted by SpencerH SSI has nothing to do with forced savings, it is just another badly thought out wealth distribution plan envisaged and supported by socialists.

Finally a right winger who comes out clean on his hate of the system

to the idea itself.

	08-12-2004 03:10									#68
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It's still a case of "he said" "she said"

	08-12-2004 03:13									#69
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quote: Originally posted by DanS As stated, it started out as wealth redistribution toward the poor. Now it's redistributing wealth toward the rich! The current system should be anathema to all lefties.

What part of "we don't trust you to fix it" don't you understand?

	08-12-2004 03:15									#70
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No its not.

Its an issue of the numbers- and thus open to intelligent debate.

	08-12-2004 03:17									#71
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just like everything else though, GePap

You'll come up with reputable economist who say everything is alright

and

I'll come up with reputable economist who say it's the end of the world

all income tax should be elective anyway, everything else should be taxed based on use

	08-12-2004 04:00									#72
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quote: Originally posted by GePap Finally a right winger who comes out clean on his hate of the system to the idea itself.

Except I'm not a right-winger. I used to play left wing in my youth though.

	08-12-2004 04:08									#73
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quote: Originally posted by DanS As stated, it started out as wealth redistribution toward the poor. Now it's redistributing wealth toward the rich! The current system should be anathema to all lefties.

If I can never recover the money I pay into SSI then the extra money I paid in must be going to someone else who didnt pay in enough. To me, thats wealth distribution from the rich(er) the poor(er). One can play with the numbers all day, but thats the long and short of it. The more money one earns the less the chance of return and the greater the subsidy.

	08-12-2004 06:16									#74
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quote: On average if you put money into equities in 1929, your rate of returns would have been lower than those of bonds for the decades of the 30's, 40's and 50's. The notion that the market must be ever upwards is a new one, not a long time truth.

yeah, but since i would contribute every year, in the long run, it balances out at a couple of percentage points a year.

quote: You also utterly ignore the issue of possible out of pocket costs you do not envision (like lets say you get divorced and your wife takes half and you have to pay child support).

thats right and thats aight. you also ignore than govt SS can get raided, can no longer be possible so you spend your entire lives paying and when it comes time to retire you wont have it. id rather make right choices and have it be my fault that it disspapears than have the govt do something thats out of my control.

quote: There is a reason SS came into being-because people do NOT actually take all their money and squirrel it way in investments for their old age-most American stock ownership comes from people's IRA and other retirement plans not run individually, and our national savings rate is miserable.

not my problem.

quote: And if the market crashes just before your retirement, you might have to dealy retiring for another decade to recoup your losses.

a small chance that im willing to take and so should everyone else.

quote: That would only get him half a million (again, ignoring inflation), again, assuming that he has the discipline to do that for 30 years, and assuming that there aren't any complications.

half a million plus my property that i can sell in the city for a few million (real estate always goes up) and buy a cheap house in the country, sure you get taxed on what you dont use, but its another coupla hundred thousands added to that, plus 401K.

	08-12-2004 06:19									#75
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quote: The point of SS is to make sure every worker gets something once they are of retirement age. It's than simple. People are free to save on their own or use other government sponsored programs.

well i want my own money. i worked for it, so i deserve it. isnt this america? will america keep its promise to me?

	08-12-2004 07:10									#76
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Spencer: Unfortunately, since we have something of a pay-as-you-go system, it's only partially a matter of paying in and recovering money. It's also doing your duty to the state by having lots of children. If we had more children (and our parents had more children), then we would pay in less payroll taxes to get the same benefit -- i.e., we would be paying in less or no extra.

Moving to private accounts won't change the basic demographic problem. It will just take the assets and liabilities off the government's books and put them onto the people's individual books.

There are at least two reasons why it's a good idea to do private accounts anyway. The first is to cushion the impact of the basic demographic problem somewhat, since the private economy pays 2 or 3 percent better per annum on each dollar in saving than does the government. In this sense, part of the extra that you are paying now is to make up for the amount that the government is taking from you by forcing you in to a lower interest rate investment. Unfortunately, as the private accounts comes into full force, the "spread" between the interest rates the government pays and what the private sector will pay will decline somewhat, but at least you will have been able to choose the higher interest rate.

The second reason is that a private account will be a huge family asset. If a husband dies, then the widow or their kids will inherit what is in the private account. Research indicates that people see what would become forced retirement savings as an incentive to go to work rather than the current system where social security taxes are seen as a huge disincentive to go to work. There will be ways for poor people to leverage this asset to do things that were previously very difficult for them to do.

Last edited by DanS on 08-12-2004 at 07:34

	08-12-2004 07:33									#77
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quote: well i want my own money. i worked for it, so i deserve it. isnt this america? will america keep its promise to me?

I think the better idea is that America shouldn't be promising you a damn thing.

	08-12-2004 08:06									#78
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quote: I think the better idea is that America shouldn't be promising you a damn thing.

why is that? america owe's me. without the people there is no america, but people can exist without america. ask not what you can do for the country but ask what the country can do for you.

	08-12-2004 08:43									#79
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I can't believe some people still take Krugman seriously...

	08-12-2004 09:04									#80
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quote: Originally posted by GePap Krugman is an Economics Professor at princeton. And Krugman answers your question- the people implementing these systems hate SS (except for the increased age-that is simply common sense)

Krugman has the credentials but also the hate of the current admin to make me question almost everything he writes.

Partisan doesn't begin to describe him.

Edit - Damn need to read to the end of the thread. What Drake said.

	08-12-2004 09:38									#81
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quote: Originally posted by Lawrence of Arabia privatize. or at least give me the oppertunity not to pay into SS and let me keep my money, and invest it myself.

Do you really think that 3% of 2% of your income (If you make $50k per year then less then $100 per year will be saved) will amount to diddely squat? Congradulations LoA over then next 20 years of your working life you will have saved $2000. I don't know about you but I pay more then that each month on my house once I pay the bank, the home owners association, and put aside money to pay the property taxes.

	08-12-2004 09:43									#82
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quote: Originally posted by Lawrence of Arabia of course I'll have money. ill invest the money that goes to SS (10% a year) into the stock market on the lowest performing least risk stocks, and by the time I retire, I can retire an millionaire.

That's a good idea but you'll have to rely on your 401k and other investment options and not Bush's partial privitization plan. You'll be lucky if when you retire there's more then $5000 in you Bush sponsored privitized account and I'm assuming you have a 45 year working life left.

The big problem is you can't do a 100% privitization without massively increasing government spending to cover the difference between the loss in income as young people opt out, the natural decline in payers, and the natural increase in recievers as the population ages.

	08-12-2004 09:52									#83
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quote: Originally posted by chegitz guevara You'll need to put away $10K a year at 6% interest for 30 years to retire a millionaire. And in thirty years, a million will be worth what? If inflation is the same as the last 30 years, then it will only be worth about a third to one half what it's worth today, so you'll need to sock away twice that amount. Do you make so much you can invest $20K a year?

If you really want to make money then you need to leverage other people's capital to work for you. That's why realestate is such a good investment. You leverage other people's capital and keep 100% of the return and can even make some cash renting the place out while you wait. Is there a better deal on the planet?
For instance my father owns several rental houses which be bought over the last 12 years and for the last 50 years realestate in southern California has averaged 10% appreciation where as over the last 10 years the prices have gone up an average of 15%.

Do the math. If I have a $400,000 house, and it's almost impossible to find anything cheaper, and I make 15% per year then I made $60,000 in capital gains in my first year. Since you'd have naturally rent out the house during that year you'd likely make $17k-$20k in morgage though you will still have to come up with the cash to pay various extra expense besides the morgage.

The kicker is that you can buy a house with as little as $5k down so with a $5k investment I make $60k in one year plus $20k in cash flow? Hell, sign me up.

	08-12-2004 09:55									#84
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Until the California real estate market crashes. Seriously, how long can such growth be sustained?

	08-12-2004 10:36									#85
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Until the rental returns as a proportion of house value become so low that housing becomes a poor investment of money.

Oerdin, are rents in California rising at 10% to 15% a year?

Also investing in housing for your retirement is a bad strategy because when the baby boomers retire together there will be a large influx of people trading-down, selling investment properties and letting such properties out.
When there is such a large increase in supply into a market where the sellers are the smaller generation that followed the baby boomers prices will fall.

	08-12-2004 11:01									#86
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quote: Originally posted by chegitz guevara That's 80% of the average wage. It also assumes the market doesn't tumble around the time you want to retire.

Ideally an investor reshapes his investment protfolio as he ages. When you're young & have a long working life left to cover losses you go agressive, when your middle aged you start mixing in more bonds and low risk stocks like utilities, and as you get to with in 10 years of retiring you you phase most of you investment into low risk stocks, bonds, T-bills, and CDs. It wouldn't do to lose 80% shortly before retiring.

That said a public retirement system like Singapore has would be great. Everyone pays a tax which goes into their private account which they can't touch for any reason until retirement. The people must invest with in strict government guidelines to prevent speculating but if you follow the guidelines then the government will insure the actual principle from lose.

The US has a 70 year old legency in Social Security though so it would be impossible to transition all the young people to a privitized system without having the government cough up trillions of dollars to cover the cost of the middle aged & elderly's retirement. Like it or not we're stuck.

	08-12-2004 11:03									#87
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Also note that a very good investment vehicle for retired ppl are REITs... which own real estate.

	08-12-2004 11:06									#88
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quote: Originally posted by Lawrence of Arabia they'll be down for what? 2 or three years max? 4 at the outside? thats no problem

You are assuming people are buying stocks themselves instead of mutual funds. Unfortunately most Americans invest in stocks through mutual funds. With a stock if the price goes down I still own the stock so it the price should recover then I still own it.

Mutual fund are different. The mutual fund company ownes the stocks and you get dibs on the money they make each year but you don't own the stock. The mutual funds buy and sell fairly frequently and that means they're not going to wait five years for a stock to recover instead they normally dump a stock and use new money to invest in a faster growing stock. Once you lose money in a mutual fund you have no asset to hold on to hoping prices rebound.

	08-12-2004 11:19									#89
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quote: Originally posted by pchang Because in its present incarnation it is a Ponzi scheme.

No more so then any other government program. Essentially there is no "investment" towards retirement. Instead there is simply a deadicated tax which is used to pay current retires benifits. Sure, it would be way better to hold on to that money and invest it but the government couldn't even be trusted to hold on to the minor partof SSI in the trust fund thus SS continues to simply a tax on current workers to pay for government programs. It's the same sort of thing with education, roads, the military, and everything else.

It was never designed to be an investment it has always been a simple tax. You can complain that the government doesn't give you a good return on your taxes but that's hardly a new thing.

	08-12-2004 11:21									#90
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quote: Originally posted by Japher Also note that a very good investment vehicle for retired ppl are REITs... which own real estate.

REITs generally have a higher cost and a lower return then investing on your own. Most REITs want big properties with at least 10 units so that leaves the 1-9 unit places for small time investors to pick up without having to pay the high investment management costs most REITs charge.