« Democrats and the red state voters | Main | Prominent bear quits Wall Street »

February 28, 2005

Comments

Kender

You shouldnt rely on private accounts, but neither should you rely on SS.

The government should not be responsible for your retirement, unless you work for them. You are responsible for your retirement.

Get a job that has a retirement plan, in a solid career choice.

Simple concept. I don't understand why you folks don't get it.

Abigail

I don't understand why you folks don't get it.

Hey, it's your president, George W. Bush, who says that we must never renege on our commitment to seniors, and who says that the Social Security system must be saved.

I'm just explaining why his major idea, "private accounts," is dumb.

Kender

It isn't dumb. It may be stupid, if not done correctly. Personally I like the idea, IF people get the choice of WHERE to put ther money. You wanna put it into someting safe go ahead. You wanna invest in in ferrets, rock on. You wanna be smart and hire a financial manager with the schooling, training and knowledge feel free. If you wanna toss chicken bones in the dirt and take your advice from that be my guest.

Just rememeber that it is your money and you need to be smart with it. Be a dumbass with it and suffer the consequences.

See? It is a simple system.
Smart=good
Stupid=bad

Smart=house and good food
Stupid=cardboard box and cat food

As I said....simple.

Fargus

Abigail's right about all this. The thing about personal investment is that the greater the return, the greater the risk. This is supposed to be the bedrock of the retirement funds, not a chance to get rich. Neither is is supposed to be your sole means of support during retirement.

But in order to stay at the level of risk that we're at right now with the current system, Bush's private accounts would have to be in such low-return investments that it would negate the whole "better returns" thing, in addition to costing us a whole bunch of money in transition costs.

Abigail

The thing about personal investment is that the greater the return, the greater the risk.

That's what the Capital Asset Pricing Model tells us, but that assumes that markets are efficient, and we should know after observing the huge NASDAQ crash that there's lots of inefficiencies.

I prefer to think of investing as a zero sum game, where a few smart investors have above average returns at the expense of the dumb money.

The Social Security accounts will probably be the dumb money, investing on autopilot, which maybe is why the smart investors are all for it because they figure it will help them make more profits.

Kyle Hasselbacher

Just rememeber that it is your money and you need to be smart with it. Be a dumbass with it and suffer the consequences.

"The consequences" for my parents investing badly is that their children take care of them in their old age. Some consequence! We children are responsible for our elders when they can no longer support themselves, just as they were responsible for us when we could not support ourselves. Personally, I'd like a system that takes that responsibility seriously rathern than rely on individuals to do it.

You say yourself that some people will invest poorly. You imply that they deserve the poor future that results. I disagree. Those who contribute to society and live to old age deserve comfort in that old age regardless of their ability to predict the future of the stock market.

Mark Foxwell

Quite aside from whether you or even everyone somehow manages to come out as far ahead as the current Social Security system would leave them if we just let it ride, what you privateers are evidently ignorant of or hoping we ignore is that stockbrokers stand to make a killing in transactions fees. Every time anyone needs to modify their portfolio, they pay a commision to guess who. So this "alternative" system must, _on the average_ outperform the existing one just for the average outcome for the people paying into the system to break even. All their efforts to get ahead in playing the market _first_ of all reward these people for providing a service that is completely unneccesary for most people to hire right now.

And of course it is lunacy to assume that the huge majority of new players, who are people who have hitherto not gotten involved in the stock market, are going to outplay the professionals who make their fortunes with it. If everybody put the same effort into it the pros do, no one would be doing the real world work that actually creates wealth. Of course with no wages earnings they would have no stakes to bring to the table!

The proposed system then is double dipping for the privileged few who have made the stock market their calling in life, first by diverting what is essentially a tax directly to stockbrokers, whose interest would not be maximizing the returns for their new clients but maximizing their transaction fees in the way that consumers are all too familiar with with telephone schemes and the like. Unlike real players with big money who own their capital outright, these small fry will find that it is hard for them to take priority over the big investors in the minds of the stockbrokers; the workers absolutely must make decisions and change their portfolios or be wiped out, but they will not have the resources to shop for reliable stockbrokers. It would be very easy for the brokers to collude to set a double standard of service, one for serious clients and one for these poor losers who are forced to gamble their money in what for them is a game rigged against them.

And even if the stockbrokers do not collude and treat the small fry just like the high rollers, it will be the latter who will be more likely to win; aside from illegal advantages like insider information, these are people who are engaged in the market all the time, have been for years, and can hire the best advice. Therefore, there will be a more general drain of worker's income to the already wealthy; this will tend to inflate the stock market and perhaps float it past coming crises that would otherwise sink it. Losses will fall on the outsiders (us) in bad times; gains in good times will go to the high rollers first, and pretty soon the "savings" the new law _mandates_ we gamble in this rigged game will evaporate. And kender will say "see, eat cat food, you were not smart." Indeed we would be fools to accept this piratical plan!

Does it cross your mind, kender and other self-satisfied reactionaries, that if we do not provide a fixed, living income for the working people who have gotten too old or disabled to work, and throw them onto their struggling children or the street or the charity we see flowing from your kind hearts, that people will be desperate, and perhaps in desperation consider collective violence? That in fact before Social Security was established, revolutionary movements were not that uncommon in the USA especially in times of crisis? Have you ever studied the history of our country and noticed that these allegedly "socialist" programs you want to defund or sabotage to death now were put in by moderate reformers heading off real socialists?

If you want to see an experiment in working-class run socialism and feel some return fire in the class war you are escalating, go right ahead with your extremist schemes. FDR put in Social Security to _head off_ straightforward welfare based on simply taxing the rich and paying the poor which was an idea embraced by Republican as well as Democratic local politicians in the Depression--those who wanted to keep their jobs that is. You may feel secure from that risk, since property controls politics directly now and it has long been a crime in the land of the free to form a real socialist party. But that just means it would happen underground, and its supporters would see no alternative but violent takeover. If the majority are made as miserable as I believe you would make them, they will stand by or join the rebels, and then we'd see who eats what. You'd better _hope_ then that is possible for a public entity to run the economy, because they sure would not trust you to use your privileges nobly and wisely after that.

SheaNC

Kender, when those "investment account" seniors get picked clean in a Neil Bush style savings and loan scam and are left destitute, will you be around to recommend they apply for welfare?

Or can they bunk with you?

Kender

Kyle...I think I just pegged part of the problem here. You make it sound as if taking care of grandma or dad is a burden. No wonder thinsg are so bad in this country.

The only one in my family at the moment down to needing care is my grand father, and he lives with one of my aunts. Not by necessity but by choice. We had a bit of a row about who got gramps, and the aunt gets him living with her, but he visits as often as possible. And no, it isn't a money thing. We happen to love our family and getting to have them around is not a burden as you make it sound, but an honor.

And sheanc? Dont they theoretical destitute seniors have family? If not, send them my way. I will make room amd I hope they have some good stories for the kids and that they like to sing. Also, no vegans....

Fargus

Kender, you're twisting Kyle's words. He was clearly talking about the financial burden of making up for bad investments, not the burden of having family around. But I'm sure it makes your argument easier to think otherwise.

Kyle Hasselbacher

Kender...I can see how you could read the "burden" metaphor into my comment, but I don't think it was on my mind when I made it. What I wanted to convey was:

1. Care for the old is the responsibility of the young.

2. Social Security, as it is, embodies that responsibility.

Contrast with your statement, The government should not be responsible for your retirement, unless you work for them. You are responsible for your retirement. Who is "the government" here? It's We, The People! In the case of Social Security, the people responsible for "your retirement" are literally the younger workers—the young caring for the old.

3. Privatization, by contrast, makes the old responsible for themselves.

Within there somewhere was also the idea that people may not take responsibility for themselves, and that responsibility will fall on a (perhaps also unprepared) child. I think that's to be avoided. Again, those who contribute to society and live to old age deserve comfort in that old age regardless of irrelevant circumstances beyond their control. Fairness requires a system that supports seniors the same regardless of how the market was doing on the day they retired.

Some hypothetically destitute seniors won't have family. I doubt you, personally, will house them all. How will they be cared for? This is not an idle question, and I can't think of an answer that's private and as secure as Social Security.

You seem to embrace the idea that the young care for the old. (You said, We happen to love our family and getting to have them around is not a burden as you make it sound, but an honor.) Have I misread that? If not, how does that jibe with You are responsible for your retirement?

Chief

And when the company that you worked for and is sending you a retirement check and benefits every month, all of a sudden files for bankruptcy and a bankruptcy court judge relieves them of having to live up to their obligation, what do you expect that person to do. They are much too old to start over and have too few skills.

And what if you invested in Enron? Suppose you had worked there and had Enron stock in your 401-K? I know a person who owned $400,000 of Enron stock. He just got a settlement check, after attorneys fees, of $26.42.

In my mind one of the purposes of Social Security and Big Government is to protect the relatively powerless average person from the predatory nature of businessmen.

The comments to this entry are closed.