[QUOTE=bdgr]
Um…If your talking about unemployment, thats not how it works. The person who is unemployed draws out money from the fund they paid into. They arent getting your money.
[/QUOTE]
All that means is that the government stole my money to pay paul. I will never see the value of the lost wages.
[QUOTE=RickJay]
I think this depends on the jurisdiction you’re in. Most “insurance” plans of any sort simply do not work the way you describe; you pay premiums to the insurance company and they pay you if your policy is triggered. In fact, the payments in amny cases ARE paid by other people. If your house burns down the insurance company will pay you money paid by other people; unless you’re a total idiot who got scammed by a real thief of an insurance agent, or in some weird circumstance, there’s no way you should ever pay as much in home insurance as you would be paid if your house was destroyed. If I paid my home insurance at the rate it’s at now I would have to pay it for ninety years to pay as much money as they will pay me if it needs to be replaced.
The entire POINT to catastrophic insurance, like home insurance or big time health insurance, is to do exactly this. By spreading the pain out among all policy holders, nobody gets screwed if their number comes up and they lose their house or something. Since most homes don’t burn down, most everyone pays less than they would pay for a new house.
Unemployment insurance, in many jurisdictions, also involves people paying you benefits. You MIGHT pay more than you get back, or you might not. What is for sure is that in many cases your UI premiums are actually going into the government;s general revenues, just like taxes, and benefits are coming out of the same pot. While in most cases your benefits are tied to what you paid, it’s not always that clear a relationship; again, it depends where you are.
[/QUOTE]
The way unemployment insurance is structured just about everywhere is that you can only draw out what you have paid in. You’re available benifits are determined by how long you worked and how much you earned. In some places your employer gets a refund of sorts if it is not claimed, but you cannot draw out more than you paid in.
[QUOTE=Magiver]
All that means is that the government stole my money to pay paul. I will never see the value of the lost wages.
[/QUOTE]
No, the government took your money for an insurance policy in case you were laid off. If you did not file a claim when you were laid off, that is your fault. The other guy filing a claim is jst getting back some of the money he paid in…he’s not getting your money.
[QUOTE=bdgr]
No, the government took your money for an insurance policy in case you were laid off. If you did not file a claim when you were laid off, that is your fault. The other guy filing a claim is jst getting back some of the money he paid in…he’s not getting your money.
[/QUOTE]
OK, so the government took my money at gunpoint for an insurance policy I didn’t want to solve a problem I wouldn’t have if they hadn’t taken the money in the first place. Thanks Frank.
[QUOTE=Magiver]
OK, so the government took my money at gunpoint for an insurance policy I didn’t want to solve a problem I wouldn’t have if they hadn’t taken the money in the first place. Thanks Frank.
[/QUOTE]
How is your unemployment related to you having unemployment insurance?
[QUOTE=Magiver]
To answer your first question, finding a job is not a problem I worry about. I’m currently looking for a job that I would enjoy doing and those are the jobs I’ve interviewed for. I’m assuming that makes sense to you.
Where I’m going with the personal responsibility thing is that I’ve been on this planet for 48 years and in my opinion the act if financial planning is almost non-existent in the United States compared to my parents generation. There is a correlation between a lack of planning and financial ruin.
[/QUOTE]
Our grandparents must have been TOTAL IDIOTS to let the Great Depression happen to them. What a bunch of fuckups! Total 'tards, the whole generation. No wonder they let WWII happen.
[QUOTE=Magiver]
That wasn’t the question at hand. But since you asked…. A mandatory class in personal finance in grade school and high school is the only method I can think of to replace what is not being taught at home.
[/QUOTE]
I agree with you on this point, actually. So long as the class itself isn’t politicized. Let the people who are inclined to learn what YOU’VE learned from financial planning do so, and let others who absord different lessons from financial planning do so as well.
[QUOTE=Evil Captor]
Our grandparents must have been TOTAL IDIOTS to let the Great Depression happen to them. What a bunch of fuckups! Total 'tards, the whole generation. No wonder they let WWII happen.
[/QUOTE]
They just didn’t advance themselves or something
[QUOTE=Magiver]
What I’m saying is that a lot of it was self generated due to a lack of planning. Basic financial planning is like a seatbelt. It cost’s nothing to practice and saves a tremendous amount of grief in the event of an accident. Stop reading it as a cure and look at it for what it is.
Cell phones, cable TV, cigaretts, high speed internet, new cars, dining out, and fancy clothes are luxury items. These are all things that should be purchased AFTER you’ve payed for insurance and put money away for unforseen events. Yes people make mistakes. I went from owning a new car to driving a 74 Maverick that was so rusted I used foam insulation to keep the back quarter panel on. I didn’t have to do this except I anticipated my company going under. It did. Guess where the money saved went? I dumped cable, paid my house off and all my credit card debt. That’s financial planning and it doesn’t touch what my parents did to survive. Could the company have gone under before I was able to handle it as well as I’m doing now? Absolutely. Did my planning help? Absolutely. This is not a holier-than-thou lecture but a statement of opinion on the status quo of savings and financial planning in the US.
IMO a lot of middle class failure could be eliminated through planning.
[/QUOTE]
Well, you keep changing the parameters. The facts are, many people don’t have the skills to hold a job that pays $30K a year and there is very little to be saved due to high rent, cost of transportation, food, clothing, etc. Most of the people who are homeless fall into this category.
I agree that we don’t do nearly enough to train kids on how to plan for a rainy day, but that’s a different issue. If you don’t make enough to save, then it’s always raining.
[QUOTE=Magiver]
All that means is that the government stole my money to pay paul. I will never see the value of the lost wages.
[/QUOTE]
You will if you collect unemployment, which I assume you are since you are unemployed. If you’re not, and you’re eligible, you’re being financially irresponsible.
[QUOTE=Evil Captor]
I agree with you on this point, actually. So long as the class itself isn’t politicized. Let the people who are inclined to learn what YOU’VE learned from financial planning do so, and let others who absord different lessons from financial planning do so as well.
[/QUOTE]
I agree totally-I was teaching HS math-and most kids hadn’t a clue about compound interest, interest on a loan, etc. Which is why so many fall into the credit card trap-they have NO idea of ehat a loan 9from the friendly credit cards) actually winds up costing them! The whole idea that you can "have it now’ is why most young adults are heavily in debt-i was shocked to read that many low-income households actually have a NEGATIVE net worth! :o
I’ve got a cousin who was diagnosed schizophrenic three or four years ago. He’s 22 years old, hears voices, occasionally has episodes where he tries to kill his father, and routinely goes off his meds because they make him feel like crap.
Though he actually managed to get through a year of college before his condition began deteriorating, his job prospects are pretty limited, because there aren’t many employers in his area willing to make allowances for a guy who can go from slightly odd to completely whacked-out with little warning. Would you hire somebody who may or may not show up for work for weeks at a time?
My cousin is technically homeless. His parents live in a suburban/semi-rural county with limited social and mental health services. The most they’ve ever been able to get for him is a three-day hold, but that usually requires that he do something to catch the eye of the police. On the occasions when the voices in his head make it impossible for him to live at home, he’ll take off for a few days to a couple of weeks to live in the woods or couch surf at friend’s houses. The longest he’s ever been out is two months, which ended with his arrest for attempting to shoplift some liquor and yet another three day hold.
So Magiver: how, exactly, should he pull himself up by the bootstraps?
[QUOTE=ralph124c]
I agree totally-I was teaching HS math-and most kids hadn’t a clue about compound interest, interest on a loan, etc. Which is why so many fall into the credit card trap-they have NO idea of ehat a loan 9from the friendly credit cards) actually winds up costing them! The whole idea that you can "have it now’ is why most young adults are heavily in debt-i was shocked to read that many low-income households actually have a NEGATIVE net worth! :o
[/QUOTE]
My girlfriend (who is almost 60) couldn’t understand why, when she paid the minimum on her credit card, would receive her next bill with a higher balance. :rolleyes:
Our home equity loan sends us a monthly bill saying they want like $20 or $30 minimum. We give them $150 a month. If you don’t pay really hard against the principle, you’re fucked. If you can’t afford to do that, you should never borrow money unless it’s a dire emergency. It’ll haunt you forevah.
We also like to take advantage of “intrest free for 12 months” deals. We take the total, divide by 11, and that’s our monthly payment. We always give ourselves at least a one-month trauma cushion. On our current loan, we gave ourselves two months, and good thing, too. We just got hit with a huge car repair bill, and the money I would have put towards the furnace went to the car. We’ll still come in under the point where interest would kick in, so we’re cool. 
Here in Spain, there’s no such thing as the “Motel homeless” (people spending so much paying for a ratty motel room that they can’t save for rent downpayment), but there are cases of immigrants owing huge amounts to coyotes. The homeless (and specially the children) are more common in larger towns. Squatters aren’t considered “homeless”. There’s a housing problem called the “hotbed places”: a flat that’s theoretically big enough for 4-5 people but has 20 beds and 60 people rotating in them. One of the problems specific to Subsaharian immigrants is that most of them don’t come with a list of “people who live in Spain and may be able to help you get a sofa” (those from Latin America or Eastern Europe often have such lists), so they’re more likely to be homeless than other groups. Caritas (Catholic Church) and the Red Cross have shelters and soup kitchens in many places. I know places too small to have a Red Cross or Caritas office where the local parish or a convent will feed the homeless.
From Caritas reports, most homeless children are North-African immigrants.
Health care is universal, but some homeless people won’t go to the doctor because they’re afraid of being interned (which is not legally possible any more, nowadays they need patient permission).
Many unmarried young people aren’t leaving their parents homes. This is in part due to high housing prices and unstable job markets, but also in part because the “kids’” expectations are too high: I had no problem finding a 3B1b 20’ from the provincial capital but I’m 38, my 25yo coworkers faint at the notion of “living in a village”. A flat of similar size and age in the capital would have cost 30-50% more than mine. Please note something that statistics about this often forget: both of my grandparental sets had to share their houses with one or both sets of their parents when they got married - it’s not new. We’ve gone from having 12 people in a single 900sqft flat (the one where my grandparents still live: them, their 3 daughters, both mothers, one father, an unrelated family of 4 to which they rented the 48sqft room) to thinking that each individual should have his own 900sqft flat. Neither too tight nor too loose, ok?
[QUOTE=Magiver]
If you want to talk about insurance problems that’s fine but your question is lame. No, person should keep $40,000 in the bank in case of health problems. That would be financially foolish if it were possible. But when you talk about an income of $30K you are in the financial realm of personal insurance. I opted out of COBRA because it was cheaper to insure privately. I have $7M insurance with a $1750 deductable. This costs less than half of the COBRA payments and I have better catastrophic as well as remedial insurance. In the event of a small medical problem ($12,000) I’m paying less than when I was “fully insured” with an HMO from my last company.
[/QUOTE]
You missed my second point- what about people who find it very difficult to get private health insurance? Here and here are articles about people being unable to buy private health insurance because they’ve taken antidepressants at some time in their lives. I’m sure private insurers are falling over each other to take on people with really expensive pre-existing chronic conditions, too.
I’m not going to say that there are no homeless people who are there because they were financially irresponsible. But I’m not about to say that all of them are there for that reason.
I think your idea of a required personal finance class in high school sounds pretty good, though it might be somewhat less so in practice (I could see them sticking the most junior and least qualified teachers in this class). I don’t see it happening, either, because credit card companies make so much money off of financial irresponsibility, and they contribute so heavily to political campaigns…
[QUOTE=Anne Neville]
You missed my second point- what about people who find it very difficult to get private health insurance? Here and here are articles about people being unable to buy private health insurance because they’ve taken antidepressants at some time in their lives. I’m sure private insurers are falling over each other to take on people with really expensive pre-existing chronic conditions, too.
I’m not going to say that there are no homeless people who are there because they were financially irresponsible. But I’m not about to say that all of them are there for that reason.
I think your idea of a required personal finance class in high school sounds pretty good, though it might be somewhat less so in practice (I could see them sticking the most junior and least qualified teachers in this class). I don’t see it happening, either, because credit card companies make so much money off of financial irresponsibility, and they contribute so heavily to political campaigns…
[/QUOTE]
Add to that list my SIL who pulled her back once. No big deal…just needed some painkillers and anti-inflammatory drugs. No big “time-off-work”, no lawsuits, nothing. She couldn’t get insurance until her last resort AARP came through. It’s $1800/mo.
[QUOTE=bdgr]
No, the government took your money for an insurance policy in case you were laid off. If you did not file a claim when you were laid off, that is your fault. The other guy filing a claim is jst getting back some of the money he paid in…he’s not getting your money.
[/QUOTE]
I thought UI was 100% employer funded (oh, and with handouts from the Fed and possibly the state). I would rather see that contribution go to the workers, and let the workers start their own insurance fund because the current situation is pretty crappy.
UI lasts, on avg, 26 weeks, and there is a maximum allotment, which is way less than what the wages (taxes) that were paid into it. When I was living in San Fran, and I was laid off for 8 months, I drew the max benefit offered by UI, and it wasn’t even half of what I was taking home at the time. To add insult to injury, they even taxed it!!! If I were to have that extra cash, and employed my own savings formula (or even that used by the state), I would have way more of a cushion to draw upon, and so would everyone else.
UI is one of those government programs that is more expensive than the benefits that it pays out. To get back to the OP, I say give the money that would have gone to unemployment and send it back to the workers. Mandate that the workers save their own money, hell, let the government take it out and put it into each person’s personal accounts. To pay for this, let the government collect the interest on it, because even without interest, I would have been able to withdraw way more than what the government alloted to me. After a certain amount or after enough years, let the worker elect to not put money into that fund. With today’s technology (or my company’s :)), this shouldn’t be an issue. You can keep all those UI people employed by training them to be quasi-fund administrators (they just don’t give you investment advice).
I agree with Magiver, the personal responsibility and savings will help an overwhelming majority of poor and homeless who get caught in bad situations. For those people that Kalhoun and Anne Neville worry about, that is another whole situation entirely, and I will gladly pay taxes to help these people out.
[QUOTE=mazinger_z]
I thought UI was 100% employer funded (oh, and with handouts from the Fed and possibly the state). I would rather see that contribution go to the workers, and let the workers start their own insurance fund because the current situation is pretty crappy.
[/quote]
No fed handouts, but it depends on how you look at it. I pay UI for each of my employees, but I figure that into how much I pay them to begin with…it’s part of their compensation for working for me. The way I see it, its their money, just like their wages are their money.
[/quote]
I agree with Magiver, the personal responsibility and savings will help an overwhelming majority of poor and homeless who get caught in bad situations. For those people that Kalhoun and Anne Neville worry about, that is another whole situation entirely, and I will gladly pay taxes to help these people out.
[/QUOTE]
savings? For the poor? What are they supposed to save. people who make min wage don’t have any money to save or be responsible with. So no, it wouldnt help the majority…a small minority maybe.
Aren’t all insurance programs more expensive than the benefits they pay out? I don’t see how you could expect any insurance plan, governmental or privately run, to function if the benefits it paid out had to be equal to or greater than the payments it took in.
UI, like insurance programs in general, is designed to be a money-loser for most of the individuals who participate in it. That’s just how pooled risk works.
[QUOTE=Kimstu]
Aren’t all insurance programs more expensive than the benefits they pay out? I don’t see how you could expect any insurance plan, governmental or privately run, to function if the benefits it paid out had to be equal to or greater than the payments it took in.
[/quote]
No, right now, if my gf totals her new car, she will get a brand new car. Other insurance providers won’t depreciate the cost of the repair because your car is old(er) (I have to re-check my policy, but I think I get a replacement vehicle of the year of my car). In terms of total real cost, I suppose this is a wash, but for my gf, it works out in her favor.
My health insurance plan has a maximum payout of like $2M (it could easily be more). Not only do I not pay for it (company pays it all), I highly doubt I’ll hit that $2M limit. I’m also positive that my company didn’t put in $2M worth of premiums. Insurance companies make money because not everyone is filing claims everyday. In addition, depending on the policy they may be able to pay back in annuities, or they can negotiate their network of providers to take annuities (or some other easier payment schedule). Also, insurance companies funnel as much money around as banks. They have loads of computer equipment that just tackles interest. Insurance companies are like investment banks in disguise.
The government, like a hedge fund or insurance company, can fund my program purely on the interest it makes off holding my money. Since it’s the government, there is nothing to stop it from taking that real money and have it fund something else (well, inflation concerns should put a damper on that idea). When someone needs to make a claim, it can then put back into the account the money needed to fund that claim.
The idea is to keep your job. No one should want to lose their job. Like I said before, put a max on the account. No one should be saving years worth of income for unemployment concerns. I have 6 months saved up (which I’m also using for the down payment of a house), and I think that’s a little excessive.