december replied to me: *“Moreover, many people are not in fact very good assessors of risk […]”
This is why I’m not a liberal any more. Liberals say, “People are stupid; it’s better if the government makes decisions for them.”*
december, how the hell do you get that interpretation out of what I actually said? I simply stated the simple fact that many people are not very good assessors of risk, which an examination of the broad spectrum of real-life investment decisions abundantly confirms, and cited Odean’s study showing statistical evidence of that. In other words, many people are going to make bad investment decisions. That’s not an insult or a pessimistic view of humanity, okay? That’s simply a rational assessment of what actually happens in the world. Because that assessment diminishes the expected performance of the privatized system that you’re in favor of, you try to dismiss it as some kind of “liberal” philosophical prejudice that “people are stupid.”
Sheeeyit, december, I used to think it was the conservatives who were supposed to be the rational, level-headed realists who were willing to face the facts. More and more, arguments like yours are persuading me that some conservatives are, on the contrary, primarily anti-government fantasists to whom facts are much less important than ideology.
*“And this helps how? It’s true that bonds tend to be much safer investments than stocks, […]”
You answered your own question.*
And you signally failed to answer the rest of it. I.e., bonds also have a much lower average rate of return, so if you’re advocating a privatized system limited to bonds, what does that do to the improved results that a privatized system is supposed to provide? And since bonds have also had negative rates of return over long periods, how much increased security can you actually expect in exchange for that decrease in profitability?
Honestly, december, your whole set of arguments here seems to be an incoherent muddle of contradictory points tossed out separately to counter individual objections but incapable of being coordinated into a self-consistent whole. When you want to argue that a privatized system will make more money, you point to the high rates of return from stocks: when you want to argue that it won’t be intolerably risky, you claim that the privatized investments will be limited to bonds. You talk about average rates of return on investment, and when other people point out that many investors don’t do as well as the average, you accuse them of thinking people are stupid. When we point out that SS has higher security and lower overhead than a privatized system, you complain that we’re denying people freedom of choice. You consider it “preposterous” for anyone to try make long-term market forecasts because “nobody knows what the stock market will do”, while confidently asserting that stock investments over several decades will be profitable. You talk about the financial burden on poor people of paying SS taxes while completely ignoring the fact that in the absence of (income-redistributive) SS, poor people would have to shoulder the bigger burden of maintaining adequate retirement savings. You talk about the “average” relative incomes of SS contributors and recipients without indicating what kind of average you mean, obscuring the fact that it could be a relatively small number of rich recipients skewing the numbers.
In short, december, on this topic you appear to be saying any damn thing that pops into your head, with no concern for the logical consequences of any one of your statements with respect to any other. Phooey.
