There's a sports term: flooding the zone. That's what huge copy 'n' paste posts are like. Maybe an effective strategy in sports, but not in a discussion...
i tried linking to it... he couldn't find it... sorry if I have to spoon feed it.
There seems to be some confusion about what the stock market actually does. There is a huge difference between the day-trader type of investment, buying and selling for high-risk profit, and buy-and-hold in mutual funds or market-tracking funds. The average investor who buys and hold a mutual fund for many years has always made money. Always. There may be short-term losses, but the trend is up, not down. I would assume the fees would be similar to your average 401k account, covered by the individual investors, but that's a minor detail, really. The point is, investment works. If we don't do something, those of us who are younger workers will not see one red cent. When they talk about SS being solvent for 40 years, they are NOT including inflation. The calcs are done with no increased benefits for 40 years, meaning steadily decreasing benefits for 40 years. It's ridiculous to sit here and do nothing and hope the problem goes away.
Long-term investors DO NOT always make money. It all depends on when you buy and when you sell.
No one is advocating sitting here and doing nothing. Changes can be made to the system that insure its survival and its integrity. The premise behind the Bush changes is to alter it entirely. And, as Bush has acknowledged, privatization will not solve the problem anyhow.
social security is an insurance not an investment. calculating rate of return of investment is illogical. Do you expect a return on investment for your house or car insurance?
Just watched a presentation on the television machine about how Britain is trying to recover from a disasterous fling with privatizing Social Security. They are moving toward the present American system.
Fastcheck apologized (well, kind of)- do you, Phoenix, still stand to your opinion?
Well, since we have a different system here - actually, here, those who pay in, pay for the older, no investment or similar at all - I'm stuck more on this: 120 years with such a 'generation contract' plus the 'social idea' behind it isn't so easy to threw away.
(I have to admit that besides the social security, both my wife and I have private provisions for our old age as well.)
I've read through most of this thread and picked up a couple of things.
Cyclo - You work for Univ. of Tx and have a retirement fund, right? Do you get to choose where that money is invested? Do you actually pick the stocks or is everyones money pooled and decisions made by the fund managers?
What I have gathered from what has been said by Bush is that the proposed system would pool everyones SS tax/ insurance payment and the government would serve as a fund manager and do the investing for you.
Your money would still come out of your check through payroll. Your money would still go to the federal government. Now your money will be invested by the federal government into stocks / bonds etc. of their choosing. Upon reaching retirement age, your money still comes to you by way of a check from the government, but now it is determined by what was invested and interest earned. Yes, the claim is that if you die before the money runs out you can leave the remainder to your heirs. But what if you run out of money before you die? What happens then? Can it work both ways?
And, if the government is investing your money for you, if you choose to participate, is it really personal account? You aren't controlling where it goes. You aren't controlling the fees associated with your fund.
Wasn't there a major collapse of the teachers funds in a couple of states back around 2001? Was it Florida and Texas? Cam't remember, but the SS proposal sounds to me like the same type program already in use for teacher retirement funds and if that can happen to them...
Squinney- I have to go now, but I want to address this issue. I will be back this afternoon!
Social security other than delivering a support to retirees it supports the disabled, and young children of the deceased . For those in that situation privatized accounts will be in all likelihood meaningless. With social security disbursements being cut on the premise that people will have all those funds from privatized accounts. I wonder where those extra funds will come from. I wonder if George in his infinite wisdom has taken that into consideration or if he is even aware of it.
I would note that in his speech Bush never made mention of the two trillion dollars that will need to be added to the deficit {borrowed} inorder to convert the system to his proposed scheme.
Au, did you listen to the percentage that would be allowed as a personal account? 1/3 to 1/2 of SS tax, not all of it - the other 1/2 to 2/3 would be for those other SS payouts. It's amazing to me that you trust the govt more than yourself. Have you honestly found the govt to be a better steward of your money than you are? Or is it just other people who you think are too stupid to take care of themselves?
Idaho
Did you listen. The disbursement amounts will be cut since supposedly they will be supplemented by your privatized account. In addition if your privatized account goes belly or runs out you will be $hit out of luck.
There is no doubt that the SS system needs fixing however, it does not need the major surgery proposed by Bush. As for me since I am well above 55 years old if Bush is to be believed in no way will the changes have any effect upon me. I just believe Bush is as usual using scare tactics to sell a bad idea.
Of couse the payments to those who elect personal accounts will be cut. And, yes, there is the potential the entire stock market could go belly-up. BUT, if that actually happens, SS personal accounts will be the least of our worries. If that happens, the fed govt won't have any money either, so it's a silly point. And you accuse Bush of using scare tactics?
