Dont cut SS--expand it

[Matthanuf06]

The problem with SS is the return. It's abysmal. For every dollar you put in you get a 1% return, provided you don't die. That is freaking terrible. You can invest in virtually anything in the world, randomly, and do better.

[g8orbill]

Originally Posted by Matthanuf06

The problem with SS is the return. It's abysmal. For every dollar you put in you get a 1% return, provided you don't die. That is freaking terrible. You can invest in virtually anything in the world, randomly, and do better.

And yet so many of the libby persuasion were adamantly against any type of privatization of SS that would allow us to make more on our money- never understood why

[jdrgator]

Originally Posted by Matthanuf06

The problem with SS is the return. It's abysmal. For every dollar you put in you get a 1% return, provided you don't die. That is freaking terrible. You can invest in virtually anything in the world, randomly, and do better.

And then have your investment crash and get nothing...

[QGator2414]

Originally Posted by jdrgator

And then have your investment crash and get nothing...

Just redistribute it from those with no say. That is what we have done from the beginning...

[jdrgator]

Originally Posted by QGator2414

Just redistribute it from those with no say. That is what we have done from the beginning...

There are many ways our money is redistributed of which we don't have a say; think wars of choice, big pharma, big agriculture, big banking etc... What will ultimately happen is that money would be redistributed to special interests through crony capitalism and a shady stock market and not to the individual citizens for which SS is intended. It's the small investor that gets pummeled when the markets go awry...and they will go awry.

[ncbullgator]

Originally Posted by jdrgator

And then have your investment crash and get nothing...

Chicken little.

The only people who GOT nothing when the market tanked were those that panicked and sold.

[jdrgator]

Originally Posted by ncbullgator

Chicken little.

The only people who GOT nothing when the market tanked were those that panicked and sold.

You've mastered the superficial observation, nc. Congrats!

Hate to break it to you, but it's a bit more complicated then simply panic.

[Matthanuf06]

Originally Posted by jdrgator

And then have your investment crash and get nothing...

Not true at all. There are ways to mitigate the volatility, but lets assume full market exposure.

If you invested in the Dow say starting in the mid 70s, instead of the government SS, you'd need the Dow to drop to about 2000 (currently at 14400 and the bottom of the financial crisis was around 6500) for investing to be as bad of a deal as the government SS.

And even still, if the market crashed to 2000, which is where it needs to be to be equal to SS, the economy would be imploding and the dollar would be worthless. SS wouldn't be a factor at all at that point regardless.

[QGator2414]

Originally Posted by jdrgator

There are many ways our money is redistributed of which we don't have a say; think wars of choice, big pharma, big agriculture, big banking etc... What will ultimately happen is that money would be redistributed to special interests through crony capitalism and a shady stock market and not to the individual citizens for which SS is intended. It's the small investor that gets pummeled when the markets go awry...and they will go awry.

FICA and our income taxes really are two separate issues...

It sure would be nice if government was involved in the things it is suppose to be involved in. A redistributive retirement Ponzi scheme is not one...

[jdrgator]

Originally Posted by QGator2414

FICA and our income taxes really are two separate issues...

It sure would be nice if government was involved in the things it is suppose to be involved in. A redistributive retirement Ponzi scheme is not one...

Not really. When you are talking redistribution, well it comes in many flavors for which we are all only choosing the ones we like and don't like.

Fact is, SS has been very successful and wildly popular across the political aisle because it's a good program that helps people. Does it need some tweaking to keep it solvent? Yes. Might it need a bigger fix then many might care to admit? Perhaps. But you'd be better off to stop kidding yourself with this quaint little untruth that it's a ponzi scheme. I know it's fashionable to call it such among a small quarter of the right side of the aisle, but other than some superficial similarities, it's not true.

[Minister_of_Information]

It is, however, a pyramid scheme by definition. It is only sustainable as long as the apex is greatly outweighed by the base. And that is not quite the case anymore due to demographic shifts.

[jdrgator]

Originally Posted by Minister_of_Information

It is, however, a pyramid scheme by definition. It is only sustainable as long as the apex is greatly outweighed by the base. And that is not quite the case anymore due to demographic shifts.

Don't think it's really that either, but aren't we just really just splitting hairs between ponzi and pyramids?

Even folks from the CATO Institute, The Economist, and Reason recognize that aside from the more superficial structural characteristics, it's neither of them.

[Minister_of_Information]

A greater number of workers pay the benefits of a smaller number of retirees. What was the ratio when implemented, 60:1 or something? Now it is approaching equality and scheduled to cross that threshold eventually. Yes, I am quite comfortable calling it a pyramid scheme, with the caveat that the system is sustainable if enough of the entitled die before they obtain benefits. I'm still not sure why some prefer this model to individual accounts, because it is clearly against the interests of the average worker by comparison.

[jdrgator]

Originally Posted by Minister_of_Information

A greater number of workers pay the benefits of a smaller number of retirees. What was the ratio when implemented, 60:1 or something? Now it is approaching equality and scheduled to cross that threshold eventually. Yes, I am quite comfortable calling it a pyramid scheme, with the caveat that the system is sustainable if enough of the entitled die before they obtain benefits. I'm still not sure why some prefer this model to individual accounts, because it is clearly against the interests of the average worker by comparison.

Your caveat is key, but also is the transparency of the system.

I hear what you are saying, but I don't know if it's in the interests of the average worker if that money disappears into the vagaries of the market. It could be if it the person is fortunate enough. But if he isn't, what then? The security in "social security" makes the insurance ensured and people like that.

[ncbullgator]

Originally Posted by jdrgator

You've mastered the superficial observation, nc. Congrats!

Hate to break it to you, but it's a bit more complicated then simply panic.

Too bad you panicked. You have mastered the emotional trap that paralyzes decision making when investing.

Hate to break it to you, but if employees had been investing their SS in stocks and bonds over any length of time, we wouldn't have a retirement financial crisis.

[jdrgator]

Where did I say anything about what I've done?

[Minister_of_Information]

Originally Posted by jdrgator

Your caveat is key, but also is the transparency of the system.

I hear what you are saying, but I don't know if it's in the interests of the average worker if that money disappears into the vagaries of the market. It could be if it the person is fortunate enough. But if he isn't, what then? The security in "social security" makes the insurance ensured and people like that.

There are two main answers to objections about relying on the market. The first is that over time it is the only game in town and certainly far superior to whatever tax revenues can guarantee. The second is if it tanks, we're all screwed anyway.

In any case, you can "socialize" the risk by having a common fund that is conservatively diversified and guarantees whatever potion of the benefit constitutes a minimum humane stipend. Anything above and beyond that can be left as the province of individual judgments, with some basic litmus tests for soundness being stipulated.

[jdrgator]

Originally Posted by Minister_of_Information

There are two main answers to objections about relying on the market. The first is that over time it is the only game in town and certainly far superior to whatever tax revenues can guarantee. The second is if it tanks, we're all screwed anyway.

In any case, you can "socialize" the risk by having a common fund that is conservatively diversified and guarantees whatever potion of the benefit constitutes a minimum humane stipend. Anything above and beyond that can be left as the province of individual judgments, with some basic litmus tests for soundness being stipulated.

All very good points, MoI. I don't recall ever seeing the socialization risk as part of any conversation in a move toward private accounts. Not saying that it hasn't been there, I just haven't seen it.

[Minister_of_Information]

Originally Posted by jdrgator

All very good points, MoI. I don't recall ever seeing the socialization risk as part of any conversation in a move toward private accounts. Not saying that it hasn't been there, I just haven't seen it.

Sorry, I thought we were solving the world's problems in here.

[jdrgator]

I think you just did, haha.