The Government Thread

[sox4lifeinPA]

so let me get this straight...

 

the government can't tell us how to live our lives behind closed doors (consensual homosexual sex), but they can tell us how to spend our money? (non privitized social security).

 

I don't favor repealling the first one, it's just the second part that I don't get.

 

from the AARP website:

 

they don't like privitized SS becuase it's risky, but here....invest your money in a mutual fund so we get a commission.

 

AARP's mutual funds

 

 

that makes NO sense what so ever...

[NUKE_CLEVELAND]

so let me get this straight...

 

the government can't tell us how to live our lives behind closed doors (consensual homosexual sex), but they can tell us how to spend our money? (non privitized social security).

 

I don't favor repealling the first one, it's just the second part that I don't get.

 

from the AARP website:

 

they don't like privitized SS becuase it's risky, but here....invest your money in a mutual fund so we get a commission.

 

AARP's mutual funds

that makes NO sense what so ever...

 

There is so much stuff deliberately left out in the left's criticism of this plan its laughable.

 

-They claim that private accounts are a "risky scheme" but they leave out the fact that they are OPTIONAL.

 

-They leave out the fact that in order to beat the current returns recipients get they would have to beat the insurmountable threshold of a 3% return

 

-They leave out the fact that those born in 1950 or before would be completely unaffected by any of the proposed changes.

 

-They leave out the fact that any monies accrued in a private account is the property of that individual, not the government, and can be passed down to their children whereas under the current system benefits end at death and nothing is passed down to the children.

 

-Back to the "risky scheme" criticism. They say that most people are not sophisticated enough as investors to handle their own money like that. While they are correct that most people dont know very much about investing they fail to mention that while they would get a choice of mutual funds to park their money in and that they would be not allowed to withdraw any of that cash until they reach retirement age. They make it sound like people are going to be day trading with their SS payroll taxes and its just not true.

 

The real fear the left has is the potential for wealth creation this plan has. Any John or Jane Doe who makes an average salary, can retire a millionaire once or twice over during the course of their working years with steady contributions and only a modest rate of return.....lets call it 7% which is very conservative when compared with the average rate of return offered by your average equity mutual funds.

 

This is a classic example of the left using blatant demogaugary to trash a plan that has the potential to benefit everybody. It is also proof that they dont want anything to do with something that has the potential to make people less dependent on government because dependency is the true power base of the left. They need people to stay poor because if they ever had some form of wealth then they'd become Republicans.

Edited February 26, 2005 by NUKE_CLEVELAND

[Rex Kickass]

Things the right neglects to mention.

 

The money to be removed from Social Security Trust to pay for the private accounts is currently what is funding retiree's Social Security benefits. By moving this money into "private savings accounts," it puts Social Security in deficit sooner than later.

 

Conservative estimates place the costs of privatization at about 2 trillion dollars. Given that we are currently running deficits forecast between 300 and 700 billion dollars without the added cost of privatization of social security, this added expense would further enlarge our deficit.

 

To compensate the sudden additional cost of Social Security privatization, your benefits will be linked to prices rather than wages. What that means is that your benefits will increase at a much slower rate then in the past. Someone born in 1977 would see benefits that could realistically be 20 to 30% lower than they would should benefits stay indexed to wages.

 

But I guess the problem is that people behind Social Security privatization don't understand the reason for it. It never was an "investment" plan for people. It is instead an "insurance" plan for people. Social Security is not about getting rich, its about making sure that you don't go homeless should the savings that citizens should be responsibly accruing suddenly disappear through a bad financial situation, or downturn. Its about making sure that people can afford to put food on the table.

 

If the people on the right honestly cared about helping people get a leg up, they might actually look for a way to help keep the cost of prescription medicine lower. They might encourage people to save rather than spend immediately. They might try to look at making people's lives better now.

 

Instead, they would like to solve the "crisis" of Social Security by hastening its bankruptcy rather than taking the small steps necessary to eliminate the future deficit for another 75-100 years.

 

They'll do it by misquoting and twisting the words of its founder, Franklin D. Roosevelt. Just ask Brit Hume.

 

Oh and by the way, I used to hold shares in a very conservative mutual fund, American Funds "Investment Company of America." It is an incredibly broad based fund covering bonds, stocks, etc. Since 1998, the Mutual Fund has not grown at all. It's still around 31 dollars a share. Where it was 7 years ago.

 

Suddenly 3% looks pretty good to me.

[NUKE_CLEVELAND]

Things the right neglects to mention.

 

The money to be removed from Social Security Trust to pay for the private accounts is currently what is funding retiree's Social Security benefits. By moving this money into "private savings accounts," it puts Social Security in deficit sooner than later.

 

Conservative estimates place the costs of privatization at about 2 trillion dollars. Given that we are currently running deficits forecast between 300 and 700 billion dollars without the added cost of privatization of social security, this added expense would further enlarge our deficit.

 

To compensate the sudden additional cost of Social Security privatization, your benefits will be linked to prices rather than wages. What that means is that your benefits will increase at a much slower rate then in the past. Someone born in 1977 would see benefits that could realistically be 20 to 30% lower than they would should benefits stay indexed to wages.

 

But I guess the problem is that people behind Social Security privatization don't understand the reason for it. It never was an "investment" plan for people. It is instead an "insurance" plan for people. Social Security is not about getting rich, its about making sure that you don't go homeless should the savings that citizens should be responsibly accruing suddenly disappear through a bad financial situation, or downturn. Its about making sure that people can afford to put food on the table.

 

If the people on the right honestly cared about helping people get a leg up, they might actually look for a way to help keep the cost of prescription medicine lower. They might encourage people to save rather than spend immediately. They might try to look at making people's lives better now.

 

Instead, they would like to solve the "crisis" of Social Security by hastening its bankruptcy rather than taking the small steps necessary to eliminate the future deficit for another 75-100 years.

 

They'll do it by misquoting and twisting the words of its founder, Franklin D. Roosevelt. Just ask Brit Hume.

 

Oh and by the way, I used to hold shares in a very conservative mutual fund, American Funds "Investment Company of America." It is an incredibly broad based fund covering bonds, stocks, etc. Since 1998, the Mutual Fund has not grown at all. It's still around 31 dollars a share. Where it was 7 years ago.

 

Suddenly 3% looks pretty good to me.

 

 

Its funny you should taylor your time horizon so that it includes 3 bull market years and 3 bear market years. Id like to see the 10 year and life of fund percentage returns of your fund. If its anything nearing respectable then over a longer time horizon itd be something north of 10% to the upside. The fact that you sold your shares right as the market bottomed proved that you know zero about investing. Had you stayed in and used dollar cost averaging you'd have already made back what was lost in the bear market years and then some. Those participating in private accounts would be in it for the long haul by rule and would not be able to bail out so foolishly.

 

Fact remains that despite the bumps along the way that steady investing regardless of market conditions pays off as evidenced by the graph on this website.

 

http://www.finfacts.com/stockperf.htm

 

This only goes up till 1999 but even factoring in the bear market of 2000-2002 rates of return should still come out something like 12-13%. I say again that 7% figure is conservative.

 

The fact remains that SS in its current form does not provide enough for those dependent on it to live on. You say that SS is there so that people can put food on the table? Well guess what? People who depend on SS alone to subsist on can't put food on their table can they? That's just futher proof that this is a broken system. If it was the great success you claim it to be then these people wouldn't be living in poverty would they?

 

Had current recipients invested their portion of their SS contribution ( the paycheck deduction is matched by the employer ) in equity funds back in the 50's and 60's when they were starting out then they'd be multimillionaires right about now and fighting for space on the golf course instead of fighting to keep their heads above water.

 

You also leave out the fact that private accounts, should the individual OPT to participate, do not completely take the place of SS benefits but reduces them by about half so in addition to the nest egg built up over 40 some years of work and compounding from rates of return they still would get about 40% of their SS benefits and at the time of death then the remaining monies in the private account get passed on to their children allowing them to benefit from their hard work as well.

 

The measures that have been mentioned like indexing to inflation rather than wages and raising the age when SS benefits can be taken will work to lessen the cost of the transition. A simple cost/benefit analysis proves that this is worth doing.

Edited February 27, 2005 by NUKE_CLEVELAND

[sox4lifeinPA]

It never was an "investment" plan for people. It is instead an "insurance" plan for people.

 

the problem is that it has become THE ONLY PLAN for millions of people. And it sounds like you've just got poor advice with your investment package.

 

I'm currently getting a modest 4.5% on my IRA.

 

 

I won't say you're wrong about it being a huge task to switch over to this plan, but I will say that the social securit plan was a huge mistake in its planning and current implementation.