Interesting comment regarding Social Security

[MonkeyK]

Originally posted by: ElFenix

Originally posted by: MonkeyK

Can you substantiate this with anything? I have been trying to get a comparison of what it would cost for private companies to offer same benefits as SS, but have not found any good numbers.

As for "too difficult to predict with any certainty some factors like average lifespan x years down the road", insurance companies do this all the time with annuities.

i'd guess a 50 year annuity to be sufficient to cover the income thing for 99.99999% of people from the standard retirement age. 40 year probably covers 99.999%. i wonder how many people would outlive a 20 year annuity (though then you might get into spousal benefit issues)

Usually annuities are paid for as long as you live. If it were a fixed term, insurance companies wouldn't be involved in selling them.

 

[ElFenix]

Originally posted by: MonkeyK
Usually annuities are paid for as long as you live. If it were a fixed term, insurance companies wouldn't be involved in selling them.

well, right, that's an insurance annuity. but insurance annuities aren't the only usage of the word 'annuity.' if you had a savings account you can calculate what the periodic payment stream would be from that savings account for a specific period so that the account is exhausted at the end of the period. that's also an annuity, and that's what i'm referring to. lottery works the same way if you don't take the lump.

 

[Train]

Originally posted by: techs
Wow. Totally disproven. Start by asking yourself why the 10 percent you put away won't actually lose money over the years? Just because the stock market has "historically" risen faster than inflation there is no guarantee it will continue.

unbelievable. The stock market is more predictable than the weater (way more) yet people who dont believe the climate change hype are morons according to you in the other threads.

If you look at the entire history of the stock market, there has NEVER (ever) been a 40 year stretch that didnt produce a better return (way better actually) than SS does today. A person saves for approx 40 years (think 25 to 65 years of age) And yes, you can even pick any 40 year period that includes the great depression.

 

[Craig234]

Originally posted by: Train

Originally posted by: techs
Wow. Totally disproven. Start by asking yourself why the 10 percent you put away won't actually lose money over the years? Just because the stock market has "historically" risen faster than inflation there is no guarantee it will continue.

unbelievable. The stock market is more predictable than the weater (way more) yet people who dont believe the climate change hype are morons according to you in the other threads.

If you look at the entire history of the stock market, there has NEVER (ever) been a 40 year stretch that didnt produce a better return (way better actually) than SS does today. A person saves for approx 40 years (think 25 to 65 years of age) And yes, you can even pick any 40 year period that includes the great depression.

Well, yes, because the science has reached a well researched conclusion on global clmate change, which is not very analogous to the stock market.

But your point is valid, to an extent; the stock market performs better on average. Now, your statement is about the market making any money; you need to compare that instead to the alternative, which is not zero but is rather the rate on government investments (not lower, but safer and occasionally even higher than the stock market). Next, add in the overhead of the stocks if Wall Street had more involvement - and you greatly reduce the profitability of the stock investment. Next, figure in some 'corruption' in the scheme...

Then calculate the costs of the government no longer having that money available for 'cheap' borrowing, which needs to be made up for in higher taxes.

In short, it's worth looking at ways to gain the benefits of the stock market, but it has to be done carefully, not by those who stand to gain by crippling the program.

 

[Pabster]

Originally posted by: techs
Republican plans? Bushes plan was to make matters worse. Thompsons plan is to just lower benefits. Guilianis plan? Well, he says he won't raise taxes, nor cut spending. Sounds as bad as Bushes plan.

Democrats plan? So far Hilary says by making modifications such as slightly older retirement age, slightly increased SS taxes, slightly reduced benefits, esp. for the wealthy and a US budget that leaves us enough credit to borrow what we need we can get thru the boomer years.

Hillary hasn't proposed squat vis-a-vi fixing Social Security or Medicare.

Fred Thompson is the only one from either party who's went out on a limb and gotten people talking about it.

 

[ElFenix]

your risk averseness has to be extremely high to prefer the bond market to the stock market because of the incredible rate that the stock market averages in comparison to the bond market. the study we looked at way back in my monetary economics class was that bond investments are the equivalent to preferring $1200 (my faulty memory tells me it was actually something like $1125) to a 50/50 shot at $3000 with $1000 guaranteed.

don't forget that merely comparing the rate of return is insufficient if you don't understand compounding. which i'm not sure a lot of people do.

 

[Mursilis]

Originally posted by: Craig234

Originally posted by: Train

Originally posted by: techs
Wow. Totally disproven. Start by asking yourself why the 10 percent you put away won't actually lose money over the years? Just because the stock market has "historically" risen faster than inflation there is no guarantee it will continue.

unbelievable. The stock market is more predictable than the weater (way more) yet people who dont believe the climate change hype are morons according to you in the other threads.

If you look at the entire history of the stock market, there has NEVER (ever) been a 40 year stretch that didnt produce a better return (way better actually) than SS does today. A person saves for approx 40 years (think 25 to 65 years of age) And yes, you can even pick any 40 year period that includes the great depression.

Well, yes, because the science has reached a well researched conclusion on global clmate change, which is not very analogous to the stock market.

But your point is valid, to an extent; the stock market performs better on average. Now, your statement is about the market making any money; you need to compare that instead to the alternative, which is not zero but is rather the rate on government investments (not lower, but safer and occasionally even higher than the stock market). Next, add in the overhead of the stocks if Wall Street had more involvement - and you greatly reduce the profitability of the stock investment. Next, figure in some 'corruption' in the scheme...

Then calculate the costs of the government no longer having that money available for 'cheap' borrowing, which needs to be made up for in higher taxes.

In short, it's worth looking at ways to gain the benefits of the stock market, but it has to be done carefully, not by those who stand to gain by crippling the program.

Why not give people options? A 401(k) gives options, but the Fed's wonderful (and mandatory) plan does not.

 

[piasabird]

I dont think you can blame the Republicans on the SS Problem. Congress both Republican and Democrat have been stealing funds from it for years. When Bush suggested that SS be reformed no one in Congress was willing to do anything. I suggest you complain to the old dinosaurs in congress like Kennedy. I think you are barking up the wrong tree. Democrats have consistently blocked any possible reforms of SS since Bush took office.

Dont give the Republicans a passing grade for social security either. They dont mind spending the money.

All the democrats have to do is propose setting up individual retirement funds for all citizens and separating all social security funds from the general fund. I dont see any action like this from anyone from the Right or the Left. Raising taxes will do nothing but give congress more funds to steal from the USA Tax Payer.

 

[Train]

Originally posted by: Craig234

Originally posted by: Train

Originally posted by: techs
Wow. Totally disproven. Start by asking yourself why the 10 percent you put away won't actually lose money over the years? Just because the stock market has "historically" risen faster than inflation there is no guarantee it will continue.

unbelievable. The stock market is more predictable than the weater (way more) yet people who dont believe the climate change hype are morons according to you in the other threads.

If you look at the entire history of the stock market, there has NEVER (ever) been a 40 year stretch that didnt produce a better return (way better actually) than SS does today. A person saves for approx 40 years (think 25 to 65 years of age) And yes, you can even pick any 40 year period that includes the great depression.

Well, yes, because the science has reached a well researched conclusion on global clmate change, which is not very analogous to the stock market.

I'm afraid not. Science is repeatable. The USGCA has more computing power than any org on earth and has still not been able to predict the weather. Which means they DONT have a conclusion. They HAVENT solved climate/weather, they just have theories. The stock market is a totally man made and entirely reproduceable environment. You can track every penny in the market, who spent it, where it's been, what its being invested in, spent on, and how it plans to come back with friends.

But your point is valid, to an extent; the stock market performs better on average.

just think abotu what "on average" means over time then everyhing you wrote next looks like complete nonsense.

Now, your statement is about the market making any money; you need to compare that instead to the alternative, which is not zero but is rather the rate on government investments (not lower, but safer and occasionally even higher than the stock market).

WTF? that's just flat out false, SS is a NEGATIVE investment for most people.

Next, add in the overhead of the stocks if Wall Street had more involvement - and you greatly reduce the profitability of the stock investment. Next, figure in some 'corruption' in the scheme...

Again, W.T.F ??? Are you pulling this straight out of your arse? More involvement REDUCES overhead. Hell you can trade online for $7 a trade now, or you can open a 401k or Roth IRA for next to nothing (and in a lot of banks today, LESS than nothing) in overhead. And corruption? Its in the govt programs! Hello?!?!? Just another reason to get rid of them.

Then calculate the costs of the government no longer having that money available for 'cheap' borrowing, which needs to be made up for in higher taxes.

Oh you mean they cant borrow to do more stupid govt programs? Oh noes. Heres a clue: we can do without them, they dont accomplish anything but allow for pork and to hook up friends of congressmen.

In short, it's worth looking at ways to gain the benefits of the stock market, but it has to be done carefully, not by those who stand to gain by crippling the program.

The american people stand to gain. People will actually be able to retire with a decent income. Instead of listening to this lifelong promise that the govt will take care of you, when we knew all along the govt. I dont see a problem with that.

Quite simply, the govt sucks at managing things like SS. They suck at managing just about anything. They mispend money like it's thier job. The govt is good at maybe a handfull of things, outside of collecting taxes and blowing stuff up. Everything else is a giant drag on the american people. After decades and decades of the same results of stupid govt involvement, I can only come to one conclusion, the socialists dont really care about people, since thier programs hurt more than they help. The socialists just want power. Plain and simple, they want to have mass amounts of control over the people. And what better way to get it than to have people hand it over to them under the flag of "a better society" A century and a half old myth that just wont die.

 

[Fern]

Originally posted by: MonkeyK

Originally posted by: ElFenix

Originally posted by: MonkeyK

Can you substantiate this with anything? I have been trying to get a comparison of what it would cost for private companies to offer same benefits as SS, but have not found any good numbers.

As for "too difficult to predict with any certainty some factors like average lifespan x years down the road", insurance companies do this all the time with annuities.

i'd guess a 50 year annuity to be sufficient to cover the income thing for 99.99999% of people from the standard retirement age. 40 year probably covers 99.999%. i wonder how many people would outlive a 20 year annuity (though then you might get into spousal benefit issues)

Usually annuities are paid for as long as you live. If it were a fixed term, insurance companies wouldn't be involved in selling them.

Nope, you can get a fixed term annuity. It's just another financial product.

You can get life expectancy tables from the gov at the SS website. If you're at retirement age now, it's about 20 yrs (less for men, more women).

You can get a rough idea idea of an anuity cost by manipulating a standard amortization program. Like the one used for loans/mortages.

For example, go to SS and get your life expectancy, use that for the term of the loan.

Make an assumption about the rate of return you expect on the money invested in the annuity. Use that for interest rate on the loan.

Figure how much you want to recieve each month. Use that for the monthly loan/mortgage payment.

Then solve for the priciple balance (intial amount of lon or mortgage).

The priciple balance must then increased for the commision on purchase of the anuity and G&A costs of administering the annuity. So, the number the program gives will be less than the cost, but by how much I can't tell you. OTOH, if SS did this for you, there would be no commission etc.

The amortization program I describe is quite simple and can likely be found for free on the net.

Fern

 

[Craig234]

Train and others, here are two links in lieu of a specific response for now.

Read and get informed on some things you are unaware of.

More readable commentary link
Longer, more thorough link

 

[Train]

Originally posted by: Craig234
Train and others, here are two links in lieu of a specific response for now.

Read and get informed on some things you are unaware of.

More readable commentary link
Longer, more thorough link

Those were posted a couple of years ago, and have been debunked. They are full of what COULD happen, with no real evidence. The evidence to the contrary is solid, as its based on historical fact. More impressive pro-privatization (or even better, elimination) of SS articles are just a google click away....

If you want to argue the "govt does it better" argument, just give up now. The govt can not now, or ever will, compete with a free market investment.

 

[Craig234]

Originally posted by: piasabird
I dont think you can blame the Republicans on the SS Problem. Congress both Republican and Democrat have been stealing funds from it for years. When Bush suggested that SS be reformed no one in Congress was willing to do anything. I suggest you complain to the old dinosaurs in congress like Kennedy. I think you are barking up the wrong tree. Democrats have consistently blocked any possible reforms of SS since Bush took office.

Dont give the Republicans a passing grade for social security either. They dont mind spending the money.

All the democrats have to do is propose setting up individual retirement funds for all citizens and separating all social security funds from the general fund. I dont see any action like this from anyone from the Right or the Left. Raising taxes will do nothing but give congress more funds to steal from the USA Tax Payer.

Democrats are the creators of, and friends of, SS; the benefit from it politically. Republicans are the opponents of SS since it was created; they suffer from it politically.

On the specific issue of the trust fund borrowing, the Republicans created the problem, creating the fund (good if done right) and setting the precedent of borrowing it for spending.

Republicans and the one democrat have been equally guilty of borrowing from the fund; it was the democrat in 2000 who suggested the practice be ended. Bush continued it.

The two parties are not anywhere close to 'equal' on SS. The republicans want to destroy it and privatize it for huge (hundreds of billions) gain for their Wall Street allies.

 

[Fern]

Originally posted by: Craig234

Republicans and the one democrat have been equally guilty of borrowing from the fund; it was the democrat in 2000 who suggested the practice be ended. Bush continued it.

The two parties are not anywhere close to 'equal' on SS. The republicans want to destroy it and privatize it for huge (hundreds of billions) gain for their Wall Street allies.

GWB did try to (partially) discontinue the practice of borowing from it. The portion of SS money that individuals would have been free to invest as they saw fit would no longer have been available to the Treasury.

As to your contention taht the Dems wanted to stop borrowing from it in '00. Where did they wanna put the money? And don't say a lockbox. There's no such thing. The money would have to be invested somewhere, the question is where? If it isn't in gov bonds (as it is now), it must be, gasp, Wall Street. And if so, the only diff between the Dem and GWB proposal is who gets to decide on which specific WS investments.

Fern

 

[Craig234]

Originally posted by: Train

Originally posted by: Craig234
Train and others, here are two links in lieu of a specific response for now.

Read and get informed on some things you are unaware of.

More readable commentary link
Longer, more thorough link

Those were posted a couple of years ago, and have been debunked. They are full of what COULD happen, with no real evidence. The evidence to the contrary is solid, as its based on historical fact. More impressive pro-privatization (or even better, elimination) of SS articles are just a google click away....

If you want to argue the "govt does it better" argument, just give up now. The govt can not now, or ever will, compete with a free market investment.

Your argument is about as convincing as a claim the law of gravity has long been debunked.

You offer zero evidence for your claims - the links are very well done, and IMO are correct. I can lead you to water but can't make you drink. You need to post evidence for more chat.

 

[Craig234]

Originally posted by: Fern

Originally posted by: Craig234

Republicans and the one democrat have been equally guilty of borrowing from the fund; it was the democrat in 2000 who suggested the practice be ended. Bush continued it.

The two parties are not anywhere close to 'equal' on SS. The republicans want to destroy it and privatize it for huge (hundreds of billions) gain for their Wall Street allies.

GWB did try to (partially) discontinue the practice of borowing from it. The portion of SS money that individuals would have been free to invest as they saw fit would no longer have been available to the Treasury.

As to your contention taht the Dems wanted to stop borrowing from it in '00. Where did they wanna put the money? And don't say a lockbox. There's no such thing. The money would have to be invested somewhere, the question is where? If it isn't in gov bonds (as it is now), it must be, gasp, Wall Street. And if so, the only diff between the Dem and GWB proposal is who gets to decide on which specific WS investments.

Fern

A fair post - I stand by the claim that GWB's interests are in harming SS and enrching Wall Street allies, though.

I've been meaning to look into the details on Gore's Lockbx plan, and probably need to get around to that in a bit, to be able to discuss the topic - but he wanted to end this mess.

Of course, you could acknowledge the rest of the points on which party is the one friendly to SS.

 

[Mursilis]

SS could easily be run with greater returns and more efficiency modeled after the TSP system for federal employees, if either party, including Dems who Craig claims love it so much, actually cared about something besides using it as a plunder fund.

 

[Train]

Originally posted by: Craig234

Originally posted by: Train

Originally posted by: Craig234
Train and others, here are two links in lieu of a specific response for now.

Read and get informed on some things you are unaware of.

More readable commentary link
Longer, more thorough link

Those were posted a couple of years ago, and have been debunked. They are full of what COULD happen, with no real evidence. The evidence to the contrary is solid, as its based on historical fact. More impressive pro-privatization (or even better, elimination) of SS articles are just a google click away....

If you want to argue the "govt does it better" argument, just give up now. The govt can not now, or ever will, compete with a free market investment.

Your argument is about as convincing as a claim the law of gravity has long been debunked.

You offer zero evidence for your claims - the links are very well done, and IMO are correct. I can lead you to water but can't make you drink. You need to post evidence for more chat.

Theres no need, the "logical" argument over SS was beaten to death in here for about 6 months in 2004-2005 (your same link was used then) go ahead and read the archives, I'll save you some time, the SS guys lost. They had to resort to the "compassion" argument. Given enough logic, they always do...

 

[theeedude]

There is no SS problem. The only problem is that the people who benefited from raiding SS surpluses don't want to pay back all that money they borrowed. Tough cookies. Yes, the taxes on the rich will have to go up, a lot to support SS. That's not a problem as far as I am concerned, it's just a natural consequence of having to pay for our liabilities.

 

[Fern]

Originally posted by: Craig234

Originally posted by: Fern

Originally posted by: Craig234

Republicans and the one democrat have been equally guilty of borrowing from the fund; it was the democrat in 2000 who suggested the practice be ended. Bush continued it.

The two parties are not anywhere close to 'equal' on SS. The republicans want to destroy it and privatize it for huge (hundreds of billions) gain for their Wall Street allies.

GWB did try to (partially) discontinue the practice of borowing from it. The portion of SS money that individuals would have been free to invest as they saw fit would no longer have been available to the Treasury.

As to your contention taht the Dems wanted to stop borrowing from it in '00. Where did they wanna put the money? And don't say a lockbox. There's no such thing. The money would have to be invested somewhere, the question is where? If it isn't in gov bonds (as it is now), it must be, gasp, Wall Street. And if so, the only diff between the Dem and GWB proposal is who gets to decide on which specific WS investments.

Fern

A fair post - I stand by the claim that GWB's interests are in harming SS and enrching Wall Street allies, though.

I've been meaning to look into the details on Gore's Lockbx plan, and probably need to get around to that in a bit, to be able to discuss the topic - but he wanted to end this mess.

Of course, you could acknowledge the rest of the points on which party is the one friendly to SS.

The GOP wants to "harm" SS?

First define "harming". Only then can a reasonable discussion ensue.

I don't really support the GWB plan. If you understand pension plans, this says it all - it would turn the current defined benefit plan into a (at least partially) defined contribution plan. If that's not readily clear LMK and explain what it means.

I don't think SS should be a defined contribution plan.

Fern

 

[MonkeyK]

Originally posted by: Train

Originally posted by: Craig234

Originally posted by: Train

Originally posted by: Craig234
Train and others, here are two links in lieu of a specific response for now.

Read and get informed on some things you are unaware of.

More readable commentary link
Longer, more thorough link

Those were posted a couple of years ago, and have been debunked. They are full of what COULD happen, with no real evidence. The evidence to the contrary is solid, as its based on historical fact. More impressive pro-privatization (or even better, elimination) of SS articles are just a google click away....

If you want to argue the "govt does it better" argument, just give up now. The govt can not now, or ever will, compete with a free market investment.

Your argument is about as convincing as a claim the law of gravity has long been debunked.

You offer zero evidence for your claims - the links are very well done, and IMO are correct. I can lead you to water but can't make you drink. You need to post evidence for more chat.

Theres no need, the "logical" argument over SS was beaten to death in here for about 6 months in 2004-2005 (your same link was used then) go ahead and read the archives, I'll save you some time, the SS guys lost. They had to resort to the "compassion" argument. Given enough logic, they always do...

Oh wake up! You hear what you want to hear. There has never been an honest accounting of SS vs private options on this forum. Never.
I have tried to discuss it numerous times and all that privatization people ever want to talk about is how much they might be at retirement time if they invested SS money in stocks. No contest there, but it's comparing apples to oranges (but maybe that what they call logic in your hometown)

 

[Craig234]

Originally posted by: Fern

Originally posted by: Craig234

Originally posted by: Fern

Originally posted by: Craig234

Republicans and the one democrat have been equally guilty of borrowing from the fund; it was the democrat in 2000 who suggested the practice be ended. Bush continued it.

The two parties are not anywhere close to 'equal' on SS. The republicans want to destroy it and privatize it for huge (hundreds of billions) gain for their Wall Street allies.

GWB did try to (partially) discontinue the practice of borowing from it. The portion of SS money that individuals would have been free to invest as they saw fit would no longer have been available to the Treasury.

As to your contention taht the Dems wanted to stop borrowing from it in '00. Where did they wanna put the money? And don't say a lockbox. There's no such thing. The money would have to be invested somewhere, the question is where? If it isn't in gov bonds (as it is now), it must be, gasp, Wall Street. And if so, the only diff between the Dem and GWB proposal is who gets to decide on which specific WS investments.

Fern

A fair post - I stand by the claim that GWB's interests are in harming SS and enrching Wall Street allies, though.

I've been meaning to look into the details on Gore's Lockbx plan, and probably need to get around to that in a bit, to be able to discuss the topic - but he wanted to end this mess.

Of course, you could acknowledge the rest of the points on which party is the one friendly to SS.

The GOP wants to "harm" SS?

First define "harming". Only then can a reasonable discussion ensue.

I don't really support the GWB plan. If you understand pension plans, this says it all - it would turn the current defined benefit plan into a (at least partially) defined contribution plan. If that's not readily clear LMK and explain what it means.

I don't think SS should be a defined contribution plan.

Fern

By "harm" it, I mean they want Democrats to get less credit for it - so the more that people resent it, the less that people like it, the better. There are a variety of ways to do it.

The bottom line, is that they are the fox guarding the henhouse when they want to 'fix' it.

This is why they are planning a big propaganda campaign to try to convince young people that SS is a scam by old people against them; it kills two birds with one stone, both removing any political credit for democrats for SS with young people, and also giving them an issue with young people who otherwise are largely more pro-democrat.