Another Blip *AHEM*

Discussion in 'Economy' started by Annie, Jan 12, 2009.

  1. Annie
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    Annie Diamond Member

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    Just saying, something for the new administration to look forward to:

    The Next Catastrophe: Think Fannie Mae and Freddie Mac were a politicized financial disaster? Just wait until pension funds implode. - Reason Magazine

     
  2. random3434
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    random3434 Senior Member

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    I think I'm going to build a hut and live on a deserted island.





    I'll probably end up with a box as a house anyway if this keeps up.....
     
  3. Zoomie1980
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    Zoomie1980 Senior Member

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    First off, yes, all pension funds invested in stock has lost major portfolio balance. However, that does not mean they are lost forever. The markets will rebound, and smart companies that have some cash on hand are actually pumping money into those funds by buying even more stock, now that it's cheap.

    In good times, pensions actually show big gains...which smart funds pull out of stock and into Treasuries.


    The biggest thing pensions do wrong is they do not tie their benifit date to the average life expectancy. Classic pensions were NEVER designed to provide income for 30 years. They were designed to provide benifits for a year or so. When the UAW pensions and Social Security were first negotiated, they kicked in at age 65 when the average life expectancy was 63!!! Today it 80 but they still start paying at 65!!!! By all rights, today, in historical norm, we wouldn't hit retirement now until 80!
     
  4. BaronVonBigmeat
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    BaronVonBigmeat Senior Member

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    That's a good point. A more thoughtful, semi-sane version of social security would have tied the payout date to average life expectancy.

    Actually, a semi-sane version would have simply had people required to put a little money into a FDIC insured savings account every check, thus avoiding the whole Ponzi-scheme part.
     

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