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MtnBiker said:It is beyond me why any body would be suckered into a risky scheme of a 401K plan or an IRA. I mean what are people thinking?? :scratch:
MtnBiker said:This still puzzles me??
Bullypulpit said:<center><h1><a href=http://www.latimes.com/news/opinion/sunday/la-oe-kinsley19-proof,0,7948674.story>Why Social Security Privatization won't work</a></h1></center>
Besides which, the only ones who'll actually benefit from Social Security privatization is Wall Street.
Kinsley's Proof That Social Security Privatization Won't Work
By Michael Kinsley
MY CONTENTION: Social Security privatization is not just unlikely to succeed, for various reasons that are subject to discussion. It is mathematically certain to fail. Discussion is pointless.
The usual case against privatization is that (1) millions of inexperienced investors may end up worse off, and (2) stocks don't necessarily do better than bonds over the long run, as proponents assume. But privatization won't work for a better reason: It can't possibly work, even in theory.
The logic is not very complicated:
1. To "work," privatization must generate more money for retirees than current arrangements. This bonus is supposed to be extra money in retirees' pockets and/or it is supposed to make up for a reduction in promised benefits, thus helping to close the looming revenue gap.
2. Where does this bonus come from? There are only two possibilities-- from greater economic growth or from other people.
3. Greater economic growth requires either more capital to invest or smarter investment of the same amount of capital. Privatization will not lead to either of these.
a) If nothing else in the federal budget changes, every dollar deflected from the federal treasury into private Social Security accounts must be replaced by a dollar that the government raises in private markets. So the total pool of capital available for private investment remains the same.
b) The only change in decision-making about capital investment is that the decisions about some fraction of the capital stock will be made by people with little or no financial experience. Maybe this will not be the disaster that some critics predict, but there is no reason to think that it will actually increase the overall return on capital.
4. If the economy doesn't produce more than it otherwise would, the Social Security privatization bonus must come from other investors, in the form of a lower return.
a) This is in fact the implicit assumption behind the notion of putting Social Security money into stocks, instead of government bonds, because stocks have a better long-term return. The bonus will come from those saps who sell the stocks and buy the bonds.
b) In other words, privatization means betting the nation's most important social program on a theory that cannot be true unless many people are convinced that it's false.
c) Even if the theory were true, initially, privatization would make it false. The money newly available for private investment would bid up the price of (and thus lower the return on) stocks, while the government would need to raise the interest on bonds in order to attract replacement money.
ScreamingEagle said:Wall Street will benefit of course. That is not necessarily a bad thing. The companies that people invest in will benefit also as more money will be available for R&D and growth. There will be more investment in America. People will spend their money to powerhouse our American companies and not send it into a largely irresponsible government program where much of it will just go to pay some whiney slob collecting SSI or else an illegal.
To answer Bully's referenced article against SS privatization:
Well, the current arrangements are going to go broke anyway. Do you think it might just possibly be easier to "generate more money" than the current broken system? Seems to me anything is better than NOTHING.
Well, I think there may be more economic growth if more invest in the market. Right now, monies for SS are just taxes levied to pay the older generation. In one door and out the other. None of the tax money is being used for investment for growth in the market.
Also, returns on stocks can come from more than just growth (capital gains) - returns can also come from earnings. If there are no companies with any growth or earnings at all, then the whole system is in trouble no matter which system you use! This is a doomsday argument.
I agree, companies need more capital from people who invest in them in order to grow. As stated before the SS tax money would be put to good use.
Also, growth of a good individual investment account also relies upon one other essential ingredient that the government ignores: Time. This refers to the great power of compounding your money over time .
What dollars in the federal treasury today? SS today is a flow-through system. There is no actual "pool". With the new system there is actually a "pool" of real dollars managed by individuals who actually own their own individual real "pool". No congressmen will be able to directly touch their "pool". This means that peoples' money will be put to work for them in their investments.
Not true. If an account just got a minimum average return of 5% over a period of 40 years, the retirement fund would outstrip the current SS check. I can't understand why someone would be too stupid to invest in such a better retirement fund - unless maybe you are referring to the illegals who can't read the simple English instructions for basic investment.
Once again, this is looking at the big picture with doomsday in mind and with the mindset that the pie will never get bigger. Using the old SS system under such a scenario you are still robbing Peter to pay Paul. However, now there are not enough Peters. Maybe eventually only one Peter to pay one Paul. So what are you going to do?
There is nothing stopping people in a new SS system from buying government bonds is there? (if you want their typical low returns) Under the old SS system, they do not buy bonds - the incoming money from taxes is immediately spent.
No, it is not just betting on a theory. It is happening elsewhere. Look at the success of privatization in Chile. http://www.socialsecurity.org/daily/07-31-99.html Privatization means that people are in control of their own money and their own retirement. Who better to control one's individual retirement than the individual himself?
Initially, nobody is going to be affected as this program is aimed at the younger age group. There are still going to be problems with the older age group, especially the Boomer age group. But it is much better to deal with temporary problems while in the process of ultimately solving the the SS retirement problem permanently and building a better future for our country.
Maybe we should begin an investment program similiar to this to address our health issues as well.
archangel said:Why would anyone put faith in Wall Street....given their track record as of late?Also if this were such a great investment opportunity...then why hasen't the government placed SSA funds into Wall Street ...humm please advise me...
Yeah, I mean geeze, if you had invested in the S&P, DOW or NASDAQ two years ago, you would only be up ONLY about 40 - 45% on average. I mean, compare that with SSN and anybody could see that would be dumb!archangel said:Why would anyone put faith in Wall Street....given their track record as of late?
That is such an IGNORANT question, I can't believe you even asked it.archangel said:Also if this were such a great investment opportunity...then why hasen't the government placed SSA funds into Wall Street ...humm please advise me...
Every time we had a GOP president, we would have to listen to idiots like you whine that the government was too cozy with "Big Business". Of course, if the democrats are in power, they won't be able to do any wrong with their investements....On the surface that approach may have some appeal; in reality it is fraught with peril. It could potentially make the federal government the largest shareholder in American corporations, raising the possibility of government control of American business. In addition, there are serious questions about what types of investment the government would make. Political considerations and "social investing" are likely to influence the government's investment decisions, allowing the government to manipulate economic markets. After all, should the federal government be investing in tobacco companies or companies with holdings overseas?
When Federal Reserve Chairman Alan Greenspan was asked about allowing the government to invest he stated his belief that this "has very far reaching potential dangers for a free American economy and a free American society."
freeandfun1 said:Yeah, I mean geeze, if you had invested in the S&P, DOW or NASDAQ two years ago, you would only be up ONLY about 40 - 45% on average. I mean, compare that with SSN and anybody could see that would be dumb!
That is such an IGNORANT question, I can't believe you even asked it.
10. Could the government invest the money instead?
Every time we had a GOP president, we would have to listen to idiots like you whine that the government was too cozy with "Big Business". Of course, if the democrats are in power, they won't be able to do any wrong with their investements....
archangel said:I just asked a simple question your arrogance is amusing..just injected a little humor..not intended as a attack on the GOP..whats up with that? By the way I am a Registered Conservative Independent...even more conservative than most GOP members...I just like to play fair and hear both sides of a issue without someone quoting party lines...so sorry
archangel said:I just asked a simple question your arrogance is amusing..just injected a little humor..not intended as a attack on the GOP..whats up with that? By the way I am a Registered Conservative Independent...even more conservative than most GOP members...I just like to play fair and hear both sides of a issue without someone quoting party lines...so sorry
Fmr jarhead said:Seems to me that you are trolling.....
BTW...where do I go sign up to become a Registered Conservative Independent?
I don't recall them having an office here in the Greater Washington DC area. (I don't recall that even being an option when registering to vote, either!)
BEWARE THE TROLL!
nakedemperor said:What does it mean to "invest in the S&P, DOW, or NASDAQ"? To buy one of each share of every company on the index? Doesn't that require a lot of money?
archangel said:FMR Jarhead...I really do not know why I am taking the time to answer you except that I suppose you are entitled to a answer..As for trolling you seem to be the one who is trolling..As for my party affilliation I am Registered with the American Independent Party..and I am conservative..sorry to hear they are not in the DC area quite big in Nevada...Have a nice night!
Here ya go NE.nakedemperor said:What does it mean to "invest in the S&P, DOW, or NASDAQ"? To buy one of each share of every company on the index? Doesn't that require a lot of money?
I listen to Bob Brinker on the radio now and again when I am in my car. He knows the market and provides some excellent insight for us novices.The securities markets have measurements to which you can compare your own securities. For example, you can consult the Standard and Poor's 500 Stock Index or the Dow Jones Industrial Average. These will give you an idea of how well your security is performing compared to the market "average." If you would like to achieve the same results as an index but do not want to buy and sell to match the index, you can invest in a type of mutual fund that does that work for you. That is the subject of this tutorial.
Fmr jarhead said:I like Bob Brinker, too. He is a wealth of information (pun intended)
I also find the time to listen to Dave Ramsay, as well. (although I do not care for the all the religious stuff....but the financial knowledge is excellent)
A little time spent on learning about investing properly, will provide a lifetime of security provide a nice little inheritance for your children or grandchildren, as the case may be.
Social Security will hardly even provide for day to day sustinence, in a lot of cases. Especially for the poor, women, and minorities.
If more people would look at this as a way to empower themselves, instead of insisting on the government to provide for us, we would all be better off. It is MY money that the government is taking (and yours...if you pay taxes), and we should have the option to do with it as we choose. If you are uncomfortable with private accounts then stick with Social Security...just don't ask me to take you on vacation, when my retirement is sloughing off 5-8 grand per month, and the government is only paying out $1200 per month.
Fmr jarhead said:Baiting questions is considered trolling (in case you did not know) To each his own, I guess.
Yeah the American Independent Party is HUGE in Nevada....but where is the link the the state's contacts (so huge they must have their won website elsewhere, huh?) http://www.usiap.org/index.htm
Back at ya' AA....have a nice life!
NE...you can buy an index fund for the S&P, DOW, NASDAQ, etc.....
nakedemperor said:What does it mean to "invest in the S&P, DOW, or NASDAQ"? To buy one of each share of every company on the index? Doesn't that require a lot of money?
