So you want to disband Social Security and provide for your own retirement huh?

It's not my logic. It's how things are. It's not a rhetorical point. It's a damn accurate perspective. What if you retire during an economic collapse like we had in 2000 and 2008 where private retirement plans lost on average 37% equity? You need money to live right now. What if you were on the high end and lost 70%. You'd have very little nest egg to grow back...even if you lived that long. Private tax qualified retirement plans are hit with high asset based fees, transaction fees, and distribution penalties if applicable. They are routinely plundered byWall street for a giant chunk of change. Talk about 'rates of return' all you want, but you will not change those facts. Private plans are being fleeced routinely.

 

Crap shoot? Name a decade that index returns didnt trounce social security?

By the way, how do they pay when there is shortfalls on social security? The surpluses in the bank or more tax action and money printing? Tax hikes and benefits cuts every decade? Since social security alone dooms you to poverty, what % of the rest of your income should go to retirement? If you die young what is the risk you won't get your social security payments back? Isn't that a crap shoot in a way? Wouldn't life insurance cover more for the cost then social security survivors benefits?

 

No way. I'd rather eat my shotgun.

 

What is was intended for is irrelevant. That is what the program has resorted to.

Maybe your 401K plan probably sucks. You should discuss that with your Financial Advisor.

 

Great! You made money in a growing market. That's fantastically AVERAGE. Now let's see what happens when you find out that the stock market is rigged and the American economy actually requires an affluent middle class to BUY something from time to time.

 

You probably didn't know this but before Social Security they actually had wagons that came around to take the dead people off the streets. While conservatives deserve to live (or die) in that kind of a cold world the rest of us deserve better.

 

CONGRATULATIONS!!! That is the most RIDICULOUS thing I have ever read! Not just on the internet but ANYWHERE! Tell me, brilliant one [sarcasm alert for the incredibly stupid], if we don't need more consumption (better goods and services for everyone ie a better quality of life) then WHAT is the purpose of investing in the first place?

Because money grubbing (*)(*)(*)(*)(*)(*)(*)s have the same relationship with their money that a man who has eaten so much he has to be lifted out of his house by piano movers when his bloated heart explodes has with his food?

You have just TOTALLY undermined the ONLY excuse you had for your entire belief system in the first place! You've managed to totally disassociate consumption, and therefore productivity, from your economic model entirely! Leaving you with nothing other than investment for the purpose of investment. (It figures she's a broker - its like a pharmaceutical company inventing diseases they can cure.) You do realize that right?

So let's recognize it for what it REALLY is: parasites feeding off the profits created by the labors of others while providing NOTHING of value in return!

Some people expect more than that. That apparently surprises you!

 

You invest SO people can consume. Gross Private Domestic Investment involves expenditures by firms on capital such as tools, machinery, and factories. Firms and establishments need to create the goods and services, so you can enjoy them. You cannot consume anything that has not been created yet. This goes for the computer you use, the clothes you wear, the food you eat, etc. Production comes first, then consumption. It's never been any different.

Considering that Personal Consumption Expenditures managed to remain the same level relative to GDP even after the recession, while investment declined significantly, I would say that the economy needs more investment too.

​

Relevance?

How do you figure that I have undermined anything? I gave a perfectly rational and economically explanation. All you do is provide dogma.

I expected to debate someone who understands what he or she is talking about. Apparently, that is asking for too much...

 

Production doesn't come if there is no MARKET for the products to be CONSUMED! And there is NO MARKET unless there is a customer base with MONEY (or at least credit) TO SPEND! You have, in your own mind, completely forgotten the entire basis of the transaction remembering ONLY the part that YOU (and your kind) are getting out of it.

Now I realize that simple fact eludes people like you. But you do bring to mind a similar transaction.

It has been long rumored that in an industry some refer to as "the world's oldest" there are from time to time disappointed consumers. It seems that after the money changes hands a new negotiator will emerge from a secluded area. And he will advise the hopeful shopper than the transaction has not come about to render any services to him. They are, in fact, there ONLY to take his money.

The only differences between such a transaction and your economic model is that the instigators don't try to pretend that its anything other than what it is. At least not after the game has been revealed as what it is. And the "buyer" did have an option of not putting himself in the situation to begin with.

 

Markets are formed once people engage in commerce, not when people have money to spend. Before there was money, people engaged in barter, and after barter the medium of exchange was used, which is commonly referred to as money.

Simply put, as long as there is commerce, there will always be a marketplace. However, that doesn't change the fundamental fact that goods and services cannot be sold (or traded) unless people created them first. There is no desire for something that does not exist. No general demand existed for televisions, home computers, or most other products or services, until someone invented and improved upon such products and services. It's not a matter of the chicken/egg riddle. Evolution teaches us that the egg comes first. Economics teaches us that production comes first. It is only logic.

I understand basic economics eludes you. The only reason I respond because I get a kick out of making a food out of you.

Relevance?

Feel free to let me know when you have a halfway decent argument...

 

Which explains the real problem. The Republican Party is dedicated to the wealthy and couldn't care less about those in poverty in the United States. Their proposals for privatization reflect that fact and, as noted, none of their plans would work.

That doesn't imply that Social Security can't be responsibly privatized and, in fact, improved through privatization where it would have a safety net providing four-times what Social Security provides today.

Let's start with the fact that privatization of Social Security can only be accomplished based upon the entire working career of the person which is about 45 years. That is the "transition" period. Next is has to be based upon diversified and age-adjusted investment portfolios over that 45 year transitional period similar to a 501K but without a withdrawal option (until a level of wealth accumulation is obtained). It is complex to address age-adjusted return on investment we can get an idea based upon the S&P 500 that has had an inflation adjusted average return on investment of 7% from the 1950's through 2009 (and a substantial increase between 2009-2013). The Great Recession did play havoc but only for two years and isn't really relevant over a 45 year investment plan. At 7% ROI the investments pay off handsomely over 45 years but they would actually be higher than 7% because of greater risks than the S&P 500 taken early in a working career. Whatever, even at 7% a person would do far better than Social Security including minimum wage workers.

Of course this would also have to be a part of an overhaul of our tax codes to eliminate crony capitalism that favors high income households because there is a cost associated with a transition. I've estimted it to be about $40 trillion over the 45 year transition period but it's not a level loaded cost. It would start out fairly large, get larger, and then decline to almost nothing over 45 years. This is money we're going to have to spend anyway but it does require a new tax source because much of the FICA/Payroll taxes collected today would be going to private investment accounts.

Sort of long-winded but I suggest checking out my proposal that covers privatization as well as income tax reform.

http://www.politicalforum.com/polit...eliminating-crony-capitalism-taxation-us.html

 

What is commerce vixun? Its people BUYING things. There can be NO commerce without BUYERS. Oh sure you might be able to produce a product. But without a BUYER you will find yourself out of business VERY QUICKLY. The fact that you argue with this over and over again shows that you are in complete DENIAL of the most basic principles of economics.

Your economy would look something like this: Somebody carves a tree limb into a walking stick. He offers it for sale in exchange for something else of value. Nobody has anything else of value. So he gives up and goes swimming instead. That's EXACTLY how far you get without a BUYER.

In our next lesson we will discuss what happens when somebody offers to pay somebody to make 5 walking sticks for the price of 3 so that he can keep the difference. And then asks him to make 10 for the price of 3 with the threat that if he won't do it somebody else will. That story eventually ends up with the thieving parasite getting a rock to his head.

Yes, by all means dear, make a FOOD of me! Or to put that another way...

It speaks for itself.

Got another question for you vixun: Would your kind rather have 20% of 80? Or 80% of 20? Let's see if you can even figure out the difference. I HIGHLY doubt it!

 

You missed one important detail: Social Security was NEVER intended to be an investment. It is an INSURANCE plan. And it needs to be invested CAREFULLY because if it fails you'll have MILLIONS of old and sick people DYING in the streets. In this type of investment SECURITY is VASTLY more important than roi (return on investment). Anyone who has ever been to Vegas knows that you ONLY risk what you are prepared to LOSE. You do NOT GAMBLE with the FOOD budget.

 

There is no "gamble" in my proposal nor are long term diversified and age-adjusted investment portfolios a gamble.

Social Security is technically a "social welfare program" and not an "insurance program" as it can be changed or terminted at any time by a simple vote of Congress. In fact it has been changed to reduce benefits by Congress already and future reductions in benefits are virtually assured in today's political climate. Additionally it's an extremely poor social welfare program but let's look at the real problem with it.

In the 1930's the Congress identified a problem. The problem was that about 1/2 of those that became too old to work (about age 65) had not accumulated enough personaly wealth (assets) to provide income during their "retirement" years. Instead of addressing the problem (a lack of wealth accumulation) the Congress addressed the symptom (a lack of income). You can'f fix a problem by addressing a symptom.

By analogy it's like treating a brain tumor that causes headaches with aspirin. The aspirin provides temporary pain relief but the tumor get worse and soon it requires an morphine to suppress the pain and, in the end, the person still dies from the brain tumor that wasn't treated. We have the same problem with the "War on Poverty" where we provide financial assistance to mitigate the effects of poverty but are doing nothing to reduce the poverty. The poverty just keeps getting worse and worse costing us more money to mitigate the effects of the poverty. We're treating the symptom and not addressing the problem.

The problem of a lack or wealth accumulation that drove the creation of Social Security was reindentified in the 1960's where the Congress found that about 1/2 of the people hadn't accumulated enough personal wealth to provide the income necessary to purchase private health insurance when they retired. Same problem, different symptom, so Congress created Medicare.

Once again, read my proposal. It has a "safety net" that would would provide a minimum of $30,000/yr in income as opposed to the current Social Security minimum income of about $7,000 (and a maximum of about $25,000/yr). The "safety net" in my proposal is basically over four-times more than today's Social Security minimum benefit and greater than today's Social Security maximum benefit but it even gets better. Based upon the current minimum wage and the history of long term age-adjusted and diversified investment accounts over a 45 year time-span the lowest anticipated annual retirement income would actually be about $55,000/yr. It's also a "vested" program so even if a person dies their investments are transferred to their heir increasing family wealth. Today about 40% of people that pay into Social Security die before retirement age and every dime paid in on their behalf to Social Security is lost to the family. My plan increases the "wealth of the family" and improves the generational financial wealth of average Americans. It also dramatically increases the financial pool to fund the "safety net" to provide the transitional costs over the next 45 years. Finally, because of the overwhelming success of long term age-adjusted and diversified investments the vast majority of retirees will be able to afford private health insurance ending the need for Medicare (although Medicaid would continue for those that "fall through the cracks" as a safety net).

This is all addressed in my Federal Tax Proposal thread that both conservatives and liberals commented on. "Liberals" liked my proposal because it dramatically increases the "safety net" by providing at least four-times the retirement income while "conservatives" liked it because it would actually reduce the size of the US government by about 1/3rd after the 45 year transitional period is over. It is responsible, it is pragmatic, it if funded, it reduces poverty, it addresses the problem and not the symptom, and most importantly it will work Read the proposal and if you have any conserns with it then reply on that thread where your specific concerns can be addressed.

http://www.politicalforum.com/polit...eliminating-crony-capitalism-taxation-us.html

Just realize that the claim "Social Security can't be improved by privatization" is false. It can't be done based upon Republican politican proposals but it can be done and it can provide far superior benefits than what we have today. Not only are the "retirement" benefits superior but it actually reduces poverty that will, in turn, reduce the necessity for "welfare" assistance related to housing, food, and health care that our government currently has to address because it builds individual and family wealth over time. It addresses "poverty" which is the problem (just like the income tax proposal in my thread addresses poverty and not the symptoms of poverty).

Address the Problem - Not the Symptom

 

Actually the LIE is that it works in other nations.

What other nations have discovered is that when the system is privatized, participants "choose" the plans that pay the salesmen the highest commissions, and leave the least amount for their retirement.
Think about that, if you add wall street profits and sales commissions to the costs of a pension plan, where does the money come from?

 

Your proposal has a lot of good points. Among the best is eliminating the favorable tax treatment for Capital Gains. The biggest risk is your assumption of an 8 percent annual return which while historically accurate may not hold true in the future. Have you tested your plan at different return rates to see what would happen?

 

Get back to me when Republicans agree to:

1) tax all income at the same level with no discounting for capital gains and

2) lift the cap on Social Security contributions.

Once you accomplish that we can talk about risks and sustainability.

 

The 8% ROI was a very conservative estimate based upon historical return on investments for long term age-adjusted and diversified investment portfolios. By way of example the S&P 500 historical ROI from the 1950's through 2009 (which included the Great Recession) was over 7% but it includes all 500 corporations and not the best corporations listed on the S&P 500. If we took the top 250 corporations then the ROI is up around 12%. Assuming competing "private investment" firms with experts that will target the "high performance" corporate enterprises the ROI is better than the broad based investment information.

We can also note that with "age-adjusted" investment portfolios a young person would have diversified investments in higher risk securities to increase their financial foundation. While a few high risk investments will not perform as expected because the portfolio is diversified overall this early "risk" is very acceptable. As a person nears retirement their investments are in more secure investment options and they move out of the stock market completely. A person that was perhaps 60 yo in 2008 when the recession struck would have had little invested in the stock market and their overall portfolio wouldn't have been adversely effect to any serious degree by the stock market crash.

For example a person at age 60 might have had 50% of their portfolio in gold by 2007 where gold was selling at about $650/oz. in 2007 while today gold is currently selling at almost $1,300/oz. and that's a 100% ROI in gold.

Long term age-adjusted and diversified portfolios always make money which is why every financial expert recommends them. They don't fail and they typically provide an ROI of about 10% or more over 45 year time frame and some, depending upon "early" creation of wealth that can be as much as 20% during the first few years, can do much better. Taking reasonable "risks" early on pays off with huge results long-term.

There wasn't really any risk in using the 8% ROI because it represents a very poor return on investment over a 45 year investment period. I intentionally choose a very poor ROI in running my calculations based upon historical data for long term age-adjusted and diversified investment accounts..

As noted though I still retained a "safety-net" just in case although it isn't anticipated that it would be required very often.

 

The Republican politicians have a problem with both but the rank-in-file Republicans didn't have a problem with my proposal. There was a "carrot" that the average Republican supports and that is cutting the size of government by about 1/3rd and dramatically reducing taxation and welfare spending. The key is that it takes 45 years to privatize Social Security and about $40 trillion but the fact is that if we don't privatize Social Security it will cost more than $40 trillion over the next 45 years. We can't end a program that has existed for generations in just 10 years which is what the Republican politicians have proposed. It take an entire generation to change Social Security from a social welfare program addressing a "symptom" to an investment program that addresses the "problem" that was identified in the 1930's.

In truth the "rank-in-file" Republicans, even the Tea Party, are far more reasonable than the Republican politicians. The problem is really that the politicians are lying to them and they believe people like Paul Ryan, Ted Cruz, and Rand Paul. When the facts are pointed out like a "corporation" pays maximum of 22% on net profits of $100,000 while a sole proprietor pays over 37% on the identical income they start to understand how small enterprises are being screwed by our "corporate caplitalism" in the United States. When you point out that a person working every day earning $70,000 in net income is in a 20% tax bracket plus a 15.3% FICA/Payroll/Self-Employment tax while a person sitting on the beach in Hawaii with the same net income being taxed under capital gains is in a 0% tax bracket they can see the problem.

They actually like my proposal to end all personal tax deductions and tax credits replacing them with a "exemption" instead. They liked a single income tax rate above the exemption level (i.e. a flat tax rate) where everyone is subject to the same tax regardless of source of income. They can accept that a dollar is a dollar and all dollars should be taxed the same. They're not opposed to "fair taxation" if a proposal that actually creates fair taxation is provided to them.

The Republican Politicians aren't interested in "fair taxation" at all as they are "crony/corporate capitalists" that solely benefits the wealthy and their propaganda reflects that.

I addressed all of the issues that both "conservatives" and "liberals" expressed concerns with to ensure that they would approve of the proposal. That didn't imply that self-serving politicians that don't give a damn about the American People would approve of the proposal though.

 

I invested $65000 in my IRA and twelve years later it had dropped to $32000 (years 1995 to 2007). I had the fund professionally managed by Wells Fargo as I know nothing about the stock market.

 

Oh well luckily you don't cash in a retirement in one year. How is the market now? Up?

Socialism doesn't work. Why do you think politicians are good at anything? Why do you think class warfare happy UK is falling behind once perpetually poor Ireland? Cut your corporate tax rate UK. God forbid people make 30% more on their retirement. You can always punish people for investing later with high personal taxes.

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Profits earned by the plan of course. When politicians spend social security surplus money how do you expect they pay it back? Taxing the people they robbed?

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Why would we want to raise social security taxes? Why can't this Ponzi scheme die, change it to a senior welfare program and we get to keep our tax money?

Capital gains are hit with double taxation often. Kill the corporate tax and give a deduction for inflation and we can treat all income the same for tax reasons. That would be fair.

 

If the stock market is rigged, it's the biggest rig-fail ever. Average returns in the last 100 years have been in excess of 10%, through more than 20 recessions and the great depression. Your OP is suggesting that SS is a better option than providing for your own retirement, and I have shown that providing for my own retirement has performed better than SS will, for me. The fact is, SS is and has always been a supplementary retirement program, and most people should not rely solely upon it to provide for them during their retirement. Many people do not have the discipline or the knowledge to provide for their own retirement, and to that extent, SS, being a forced participation program, is probably a good idea. For me, I will receive SS when I retire (assuming it doesn't belly-up), to supplement my own retirement investing efforts (assuming those evil wall-street bankers you have imagined don't abscond with my earnings, somehow).

 

I have no specific information on what stocks your IRA was invested in but I will point out two facts.

First of all between 1995 and 2007 the stock market almost doubled according to the following historical charts on this link.

http://stockcharts.com/freecharts/historical/

We would also have to assume that you were very young in 1995 because no investor would have 100% of their investments in stocks if they were older than about 40. By the time someone is about 40 years old they slowly begin moving their investments out of stocks, or at least moving them into very secure and conservative stocks that pay good dividends, and by the time they're about 60 they'd only have perhaps 10%-20% invested in very conservative stock investments based upon an age-adjusted and diversified investment portfolio.

Of course with "privatizatin" there would be considerations related to the stock investment firms involved as well as criteria that ensures that the investment accounts are low-load, age-adjusted, and diversified (perhaps unlike the Wells Fargo investment account mentioned).

In any case if $65,000 was invested solely in a diversified stock portfolio and not touched until today the person would have realized a substantial return on investment based upon all stock indicators provided by the link.

 

This leaves out a more important fact. About 1/2 of income earners don't have the disposable income to invest in private investment accounts and these are the people that will only receive between $7,000-$15,000 in Social Security benefits when they retire living them in either in poverty or near poverty which requires additional "welfare" assistance such as SNAP, housing, or medical service welfare assistance (Medicare don't cover a retirees medical needs completely). Low income workers are being subjected to a 15.3% tax on their labor (i.e. combined FICA/Payroll taxes) already and have no other disposable income to invest for retirement.

It isn't a question of "discipline" but instead a "lack of disposable income" that results in most people ending up totally dependent upon Social Security in their retirement years. A low income workers (and that category is expanding as we speak) is subjected to poverty their entire lives and then subjected to worse poverty when they retire under Social Security.

The only pragmatic way to address this is to use that 15.3% to fund a mandatory "vested" age-adjusted and diversified investment program under Social Security where the investment funds are subjected to regulatory mandates that insure against the stupidity of the person (most people are ignorant related to investing). That mandatory investment program also needs to eliminate politically motivated regulation such as limiting inverstments to only US stocks or only in "guarenteed" investments like municiple bonds that are lower paying. Investment experts, not politicians, need to be the ones establishing the criteria of how to responsibly create wealth for the investors.

And we do require the "safety net" as well. While it may never be needed there can always be exceptions that must be provided for.

 

I agree, however, what I have said has assumed that people would use the money that is forcibly taken from them and invest it themselves instead. Extra money in the paycheck = disposable income for someone who is disciplined enough to do it. Most won't be able to.

By the way, I have read and like your plan to privatize SS; it really does make a lot of sense. The one thing I see that stands in its way, is that the Democrats really like to be able to use the threat of losing SS as a way to scare the hell out of old people around election time. That is a power they will not relinquish easily.