Social Security is Not a Ponzi Scheme, Mr. Perry

[clevergirl]

I am a bit surprised no one has mentioned Social Security was NEVER meant to be your sole source of retirement income. It was to ASSIST. Part of an overall plan.

Maybe its because no one has claimed that it should be your sole source of retirement income.

What percentage of Americans have a substantial secondary source?

After paying their FICA, what % can afford a secondary source?

 

[OohPooPahDoo]

Allowing government oversight for retirement accounts is one way to insure that realistic safe investments take place. If people want to, in addition, have a secondary portfolio with some riskier investments they can-

Its also a good way to ensure companies will bribe politicians to get their stocks listed as "safe" investments by the government.

I thought you were opposed to government telling you what to do with your money? You honestly think government can predict the future of the market better than anyone else?

This is the problem with you idiots. You think past returns equal future performance - even though they don't. The fact that the stock market gained X amount in years past says nothing about what it will do in the future. Not only that - but if the market gained X in years past, it would NOT have gained X in years past if FICA funds had been diverted to it, because those funds would have altered the market itself!

The expected return of any stock over a 30 year period from NOW is EXACTLY THE SAME as the return on a 30 year treasury obligation issued today.

 

[saveliberty]

This is the problem with you idiots. You think past returns equal future performance - even though they don't. The fact that the stock market gained X amount in years past says nothing about what it will do in the future. Not only that - but if the market gained X in years past, it would NOT have gained X in years past if FICA funds had been diverted to it, because those funds would have altered the market itself!

The expected return of any stock over a 30 year period from NOW is EXACTLY THE SAME as the return on a 30 year treasury obligation issued today.

Interesting how you have a source that KNOWS what future returns are going to be. I call bullshit just like all the other crap you have laid out in this thread from the beginning.

 

[OohPooPahDoo]

Maybe its because no one has claimed that it should be your sole source of retirement income.

What percentage of Americans have a substantial secondary source?

After paying their FICA, what % can afford a secondary source?

Anyone who can afford a home. If you buy a house, and pay off the note before you retire, then you've reduced the income you'll need in retirement by the amount of your note.

After that - employee 401(k)'s are great, and if you can't do that, a Roth IRA or Traditional IRA would be a good choice.

You could also purchase an supplementary annuity from an insurance company.

Perhaps more important that 401(k)'s though are real assets (that are insured!) - rental property, tree farms, whatever. My grandpa's retirement is funded by his government pension and by income from his tree farm and rental properties.

 

[OohPooPahDoo]

This is the problem with you idiots. You think past returns equal future performance - even though they don't. The fact that the stock market gained X amount in years past says nothing about what it will do in the future. Not only that - but if the market gained X in years past, it would NOT have gained X in years past if FICA funds had been diverted to it, because those funds would have altered the market itself!

The expected return of any stock over a 30 year period from NOW is EXACTLY THE SAME as the return on a 30 year treasury obligation issued today.

Interesting how you have a source that KNOWS what future returns are going to be. I call bullshit just like all the other crap you have laid out in this thread from the beginning.

I didn't say the return of stocks over 30 years would be the same as treasuries - I said the EXPECTED return is the same as treasuries. That means the sum of all the possible returns times their chances of occurring is the same as treasuries.
And that is a fact determined by the MARKET. If the market expectation of stock return over the next 30 years were higher, through arbitrage the prices of stocks would be bid up - restoring the price to the same expected return as treasuries.

 

[saveliberty]

Anyone who can afford a home. If you buy a house, and pay off the note before you retire, then you've reduced the income you'll need in retirement by the amount of your note.

After that - employee 401(k)'s are great, and if you can't do that, a Roth IRA or Traditional IRA would be a good choice.

You could also purchase an supplementary annuity from an insurance company.

Perhaps more important that 401(k)'s though are real assets (that are insured!) - rental property, tree farms, whatever. My grandpa's retirement is funded by his government pension and by income from his tree farm and rental properties.

Gee, your grandpa seems to have a DIVERSE portfolio. Now all of a sudden, you mention investments other than stocks and bonds. You can't even keep your story straight for five posts.

 

[JakeStarkey]

No Hard Right justification has emerged in this thread for radically altering SS other than we need to maintain its funds only for its needs. To rely on the stock market and private business to manage these accounts will result in richer businesses, a busted record of privatization, and poor citizens.

 

[saveliberty]

This is the problem with you idiots. You think past returns equal future performance - even though they don't. The fact that the stock market gained X amount in years past says nothing about what it will do in the future. Not only that - but if the market gained X in years past, it would NOT have gained X in years past if FICA funds had been diverted to it, because those funds would have altered the market itself!

The expected return of any stock over a 30 year period from NOW is EXACTLY THE SAME as the return on a 30 year treasury obligation issued today.

Interesting how you have a source that KNOWS what future returns are going to be. I call bullshit just like all the other crap you have laid out in this thread from the beginning.

I didn't say the return of stocks over 30 years would be the same as treasuries - I said the EXPECTED return is the same as treasuries. That means the sum of all the possible returns times their chances of occurring is the same as treasuries.

Actually you did say that. Now own it bull shit artist. I highlighted your exact words above. Exoected return means a reasonable forecast has been made. Seeing as in almost every other 30 year time period of US investment history stocks have out performed Treasuries, that would have to be pretty compelling information. Information you do not have.

 

[OohPooPahDoo]

Anyone who can afford a home. If you buy a house, and pay off the note before you retire, then you've reduced the income you'll need in retirement by the amount of your note.

After that - employee 401(k)'s are great, and if you can't do that, a Roth IRA or Traditional IRA would be a good choice.

You could also purchase an supplementary annuity from an insurance company.

Perhaps more important that 401(k)'s though are real assets (that are insured!) - rental property, tree farms, whatever. My grandpa's retirement is funded by his government pension and by income from his tree farm and rental properties.

Gee, your grandpa seems to have a DIVERSE portfolio. Now all of a sudden, you mention investments other than stocks and bonds. You can't even keep your story straight for five posts.

My POINT wasn't that a portfolio of stocks and bonds was diverse, but that financial advisors and the general public erroneously think that these things constitute diverse investments. I'm sorry if that was lost in your rush to say "Gotcha!" So because that is the way the general public thinks - thats what they will do - and the result will be that in our next big depression we'll have a generation of old people who can't take care of themselves and who are stunned by the fact that even though they invested in "diverse portfolios" all of their lives they now how to stick their hand out to government.

Even investments outside of the stock and bond market are not completely uncorrelated to moves in those markets. In a general depression all prices go down - grandpa isn't getting as much rental income or tree income as he would in a booming economy - while at the same time his fixed income investments are suffering due to low interest rates.

Even if you are diversely invested by the true definition of the word - the only guaranteed investments are Treasury obligations. Katrina came and harvested a bunch of trees before they reached maximum economic value - and many could not be removed in time before they were no good. Rental properties are exposed to the risk of dickhead tenants - or no tenants.

 

[OohPooPahDoo]

Quote: Originally Posted by OohPooPahDoo
This is the problem with you idiots. You think past returns equal future performance - even though they don't. The fact that the stock market gained X amount in years past says nothing about what it will do in the future. Not only that - but if the market gained X in years past, it would NOT have gained X in years past if FICA funds had been diverted to it, because those funds would have altered the market itself!

The expected return of any stock over a 30 year period from NOW is EXACTLY THE SAME as the return on a 30 year treasury obligation issued today.

Interesting how you have a source that KNOWS what future returns are going to be. I call bullshit just like all the other crap you have laid out in this thread from the beginning.

I didn't say the return of stocks over 30 years would be the same as treasuries - I said the EXPECTED return is the same as treasuries. That means the sum of all the possible returns times their chances of occurring is the same as treasuries.

Actually you did say that.

I didn't say return of the stock market, I said expected return, as indicated above. I'm really sorry can't read or understand basic economic terminology.

Now own it bull shit artist. I highlighted your exact words above. Exoected return means a reasonable forecast has been made.

That's NOT what it means. It means

The average of a probability distribution of possible returns, calculated by using the following formula (click link for formula):

Read more: Expected Return Definition

Seeing as in almost every other 30 year time period of US investment history stocks have out performed Treasuries, that would have to be pretty compelling information. Information you do not have.

You seem to not understand the difference between past and future. I'm referring to the expected return in the future - you're referring to past returns. They are different. Try reading the disclaimer on an investment prospectus for once.

You have also confused real returns with market index returns. People could have made a killing if they had invested at the bottom of the market around 1933 - problem is, people didn't have any money - in fact, that was part of the reason the market was so depressed. The average investor always sells after a stock drops and buys after its starting going up - that's WHY stocks go up and down so much.

 

[clevergirl]

What percentage of Americans have a substantial secondary source?

After paying their FICA, what % can afford a secondary source?

Anyone who can afford a home. If you buy a house, and pay off the note before you retire, then you've reduced the income you'll need in retirement by the amount of your note.

After that - employee 401(k)'s are great, and if you can't do that, a Roth IRA or Traditional IRA would be a good choice.

You could also purchase an supplementary annuity from an insurance company.

Perhaps more important that 401(k)'s though are real assets (that are insured!) - rental property, tree farms, whatever. My grandpa's retirement is funded by his government pension and by income from his tree farm and rental properties.

In other words anyone who doesn't need to rely on SS when they retire? Meaning of course that those same folks are having a portion of their wealth redistributed to those poor suckers, who, never earned enough to be invested in real capital, because their FICA was taken and used in the piss poor accounting instrument otherwise known as SS.

How is it you despise the have-nots so much you wish to condemn them to such a dismal end game?

 

[saveliberty]

I didn't say the return of stocks over 30 years would be the same as treasuries - I said the EXPECTED return is the same as treasuries. That means the sum of all the possible returns times their chances of occurring is the same as treasuries.

Actually you did say that.

I didn't say return of the stock market, I said expected return, as indicated above. I'm really sorry can't read or understand basic economic terminology.


That's NOT what it means. It means

The average of a probability distribution of possible returns, calculated by using the following formula (click link for formula):

Read more: Expected Return Definition

Seeing as in almost every other 30 year time period of US investment history stocks have out performed Treasuries, that would have to be pretty compelling information. Information you do not have.

You seem to not understand the difference between past and future. I'm referring to the expected return in the future - you're referring to past returns. They are different. Try reading the disclaimer on an investment prospectus for once.

You have also confused real returns with market index returns. People could have made a killing if they had invested at the bottom of the market around 1933 - problem is, people didn't have any money - in fact, that was part of the reason the market was so depressed. The average investor always sells after a stock drops and buys after its starting going up - that's WHY stocks go up and down so much.

Let's see, I made 5.5% last month and you know all these lovely terms and market conditions better then me? Stocks go up and down because people buy them off the lows and highs? Well genuis, how is a bottom or top formed if average investors never buy there. For that matter, how do they know they are buying off the low or high? Clearly you are the novice here. You already look ignorant, quit while you can salvage a reputation on another subject.

 

[OohPooPahDoo]

After paying their FICA, what % can afford a secondary source?

Anyone who can afford a home. If you buy a house, and pay off the note before you retire, then you've reduced the income you'll need in retirement by the amount of your note.

After that - employee 401(k)'s are great, and if you can't do that, a Roth IRA or Traditional IRA would be a good choice.

You could also purchase an supplementary annuity from an insurance company.

Perhaps more important that 401(k)'s though are real assets (that are insured!) - rental property, tree farms, whatever. My grandpa's retirement is funded by his government pension and by income from his tree farm and rental properties.

In other words anyone who doesn't need to rely on SS when they retire? Meaning of course that those same folks are having a portion of their wealth redistributed to those poor suckers, who, never earned enough to be invested in real capital, because their FICA was taken and used in the piss poor accounting instrument otherwise known as SS.

How is it you despise the have-nots so much you wish to condemn them to such a dismal end game?

People who benefit from OASDI are the ones who paid into it. It has nothing to do with haves and have nots.

 

[OohPooPahDoo]

Actually you did say that.

I didn't say return of the stock market, I said expected return, as indicated above. I'm really sorry can't read or understand basic economic terminology.


That's NOT what it means. It means

Seeing as in almost every other 30 year time period of US investment history stocks have out performed Treasuries, that would have to be pretty compelling information. Information you do not have.

You seem to not understand the difference between past and future. I'm referring to the expected return in the future - you're referring to past returns. They are different. Try reading the disclaimer on an investment prospectus for once.

You have also confused real returns with market index returns. People could have made a killing if they had invested at the bottom of the market around 1933 - problem is, people didn't have any money - in fact, that was part of the reason the market was so depressed. The average investor always sells after a stock drops and buys after its starting going up - that's WHY stocks go up and down so much.

Let's see, I made 5.5% last month and you know all these lovely terms and market conditions better then me?

Clearly. You didn't know what "expected return" means.

Stocks go up and down because people buy them off the lows and highs? Well genuis, how is a bottom or top formed if average investors never buy there. For that matter, how do they know they are buying off the low or high? Clearly you are the novice here. You already look ignorant, quit while you can salvage a reputation on another subject.

Stocks change direction when the smart money realizes they've got a good deal. For instance - a declining stock will eventually bottom out when the smart money realizes the price is actually a good deal. Then the price will rise - but by the time its risen very much at all, all the smart money as already bought it. What causes it to rise after is the droves of dumb money - and thats MOST of the money invested in the stock market.

This is why most investors do not beat average market index returns.

 

[clevergirl]

Anyone who can afford a home. If you buy a house, and pay off the note before you retire, then you've reduced the income you'll need in retirement by the amount of your note.

After that - employee 401(k)'s are great, and if you can't do that, a Roth IRA or Traditional IRA would be a good choice.

You could also purchase an supplementary annuity from an insurance company.

Perhaps more important that 401(k)'s though are real assets (that are insured!) - rental property, tree farms, whatever. My grandpa's retirement is funded by his government pension and by income from his tree farm and rental properties.

In other words anyone who doesn't need to rely on SS when they retire? Meaning of course that those same folks are having a portion of their wealth redistributed to those poor suckers, who, never earned enough to be invested in real capital, because their FICA was taken and used in the piss poor accounting instrument otherwise known as SS.

How is it you despise the have-nots so much you wish to condemn them to such a dismal end game?

People who benefit from OASDI are the ones who paid into it. It has nothing to do with haves and have nots.

You really are a clueless parrot~

How does the SSA calculate the monthly benefit?
The process by which the SSA calculates your PIA is fairly complicated, but it is based on your earnings history. The formula is somewhat redistributive in that the first few hundred dollars of earnings are given more credit than the last few hundred. So, in relationship to earnings and contributions to the system, low wage earners receive more back in Social Security retirement benefits than do high wage earners.

 

[saveliberty]

Stocks change direction when the smart money realizes they've got a good deal. For instance - a declining stock will eventually bottom out when the smart money realizes the price is actually a good deal. Then the price will rise - but by the time its risen very much at all, all the smart money as already bought it. What causes it to rise after is the droves of dumb money - and thats MOST of the money invested in the stock market.

This is why most investors do not beat average market index returns.

I am really laughing at you right now. You are not giving any credit to the company itself being in better or worse financial shape as a driver of value. You also paint a picture of the average investor as dumb and uninformed. Typical lib thinking.

 

[Wry Catcher]

Question: What is a Ponzi Scheme? How Do Ponzi Schemes Work? ***

Answer: A Ponzi scheme is a scam investment designed to separate investors from their money. It is named after Charles Ponzi, who constructed one such scheme at the beginning of the 20th century, though the concept was well known prior to Ponzi.

The scheme is designed to convince the public to place their money into a fradulent investment. Once the scam artist feels that enough money has been collected, he disappears - taking all the money with him.

Five Key Elements of a Ponzi Scheme

The Benefit: A promise that the investment will achieve an above normal rate of return. The rate of return is often specified. The promised rate of return has to be high enough to be worthwhile to the investor but not so high as to be unbelievable.


The Setup: A relatively plausible explanation of how the investment can achieve these above normal rates of return. One often-used explanation is that the investor is skilled and/or has some inside information. Another possible explanation is that the investor has access to an investment opportunity not otherwise available to the general public.

Initial Credibility: The person running the scheme needs to be believable enough to convince the initial investors to leave their money with him.


Initial Investors Paid Off: For at least a few periods the investors need to make at least the promised rate of return - if not better.

Communicated Successes: Other investors need to hear about the payoffs, such that their numbers grow exponentially. At the very least more money needs to be coming in than is being paid back to investors.

Social Security is not a Ponzi Scheme. Calling it so is one more example of the right wings mendacity.


** Link: http://economics.about.com/od/financialmarkets/f/ponzi_scheme.htm

 

[Trajan]

Question: What is a Ponzi Scheme? How Do Ponzi Schemes Work? ***

Answer: A Ponzi scheme is a scam investment designed to separate investors from their money. It is named after Charles Ponzi, who constructed one such scheme at the beginning of the 20th century, though the concept was well known prior to Ponzi.

The scheme is designed to convince the public to place their money into a fradulent investment. Once the scam artist feels that enough money has been collected, he disappears - taking all the money with him.

Five Key Elements of a Ponzi Scheme

The Benefit: A promise that the investment will achieve an above normal rate of return. The rate of return is often specified. The promised rate of return has to be high enough to be worthwhile to the investor but not so high as to be unbelievable.


The Setup: A relatively plausible explanation of how the investment can achieve these above normal rates of return. One often-used explanation is that the investor is skilled and/or has some inside information. Another possible explanation is that the investor has access to an investment opportunity not otherwise available to the general public.

Initial Credibility: The person running the scheme needs to be believable enough to convince the initial investors to leave their money with him.


Initial Investors Paid Off: For at least a few periods the investors need to make at least the promised rate of return - if not better.

Communicated Successes: Other investors need to hear about the payoffs, such that their numbers grow exponentially. At the very least more money needs to be coming in than is being paid back to investors.

Social Security is not a Ponzi Scheme. Calling it so is one more example of the right wings mendacity.


** Link: What is a Ponzi Scheme - How Do Ponzi Schemes Work

maybe you are right. so, whats one step lower on the scale of awfulness below Ponzi scheme? that fits.

 

[Wry Catcher]

Question: What is a Ponzi Scheme? How Do Ponzi Schemes Work? ***

Answer: A Ponzi scheme is a scam investment designed to separate investors from their money. It is named after Charles Ponzi, who constructed one such scheme at the beginning of the 20th century, though the concept was well known prior to Ponzi.

The scheme is designed to convince the public to place their money into a fradulent investment. Once the scam artist feels that enough money has been collected, he disappears - taking all the money with him.

Five Key Elements of a Ponzi Scheme

The Benefit: A promise that the investment will achieve an above normal rate of return. The rate of return is often specified. The promised rate of return has to be high enough to be worthwhile to the investor but not so high as to be unbelievable.


The Setup: A relatively plausible explanation of how the investment can achieve these above normal rates of return. One often-used explanation is that the investor is skilled and/or has some inside information. Another possible explanation is that the investor has access to an investment opportunity not otherwise available to the general public.

Initial Credibility: The person running the scheme needs to be believable enough to convince the initial investors to leave their money with him.


Initial Investors Paid Off: For at least a few periods the investors need to make at least the promised rate of return - if not better.

Communicated Successes: Other investors need to hear about the payoffs, such that their numbers grow exponentially. At the very least more money needs to be coming in than is being paid back to investors.

Social Security is not a Ponzi Scheme. Calling it so is one more example of the right wings mendacity.


** Link: What is a Ponzi Scheme - How Do Ponzi Schemes Work

maybe you are right. so, whats one step lower on the scale of awfulness below Ponzi scheme? that fits.

Old people selling pencils and apples on the street, eating tuna canned for cats; workers injured on the job competing with old people for the best corners.

There is and remains a good reason for Social Security and Medicare/Medicade; not everything should be for profit IMO.

 

[Oddball]

Old people selling pencils and apples on the street, eating tuna made for cats; workers injured on the job competing with old people for the best corners.

There is and remains a good reason for Social Security and Medicare/Medicade; not everything should be for profit IMO.

Hyperbole, false dichotomy and platitudes.

Are you on the WH speech writing staff, perchance?