Actually no, you can’t be trusted to keep that money for yourself and take care of yourself.
In this case by “you” I mean a general “you”. As an individual you might well be able to manage what you claim.
However, statistically and historically this is simply not the case. Humans simply are not very good at this. Further, circumstances beyond your control may ruin everything you saved even if you were conscientious. A hurricane may demolish your house. You may bankrupt yourself trying to save a child from an illness. There are a million things that could happen.
Please point to a country, any country at anytime in history, where things were better (better standard of living, healthier, at peace, etc.) because there was no social safety net and people were allowed to keep their money.
This phenomenon is what prompted my comment that Tea Partiers are dumb enough to advocate killing the unemployed, even though some of them are unemployed. The Tea Partiers are against Big Government … but don’t touch their Social Security and Medicaid! Because a lot of them need it!
It’s very easy for to see some of them saying, along the same lines: “Kill the unemployed … but not ME!”
I know it’s fashionable in lefty circles (including these boards) to ridicule the Tea Partiers (or, if you are 14, 'Baggers). But that group (of which I’m not one, by the way) does have a point; government spending has trended in a way that is simply unsustainable. No serious person claims that we can continue the pattern I describe; redistribution when things are rosy (creating permanent expenditure streams), and Good-Lord-We-Can’t-Cut-Now when things suck. Down that path leads Greece.
If SS and Medicare didn’t exist already, I’m sure that the Tea Partiers, and almost all fiscal conservatives, would suggest that we can’t afford such a ponzi scheme as they exist today. They certainly wouldn’t look like they look now; I heard a stat once, no cite but bear with me, that when the retirement age was originally set (65 I suppose?) the avg death age was something like 66 (or even 64?). Now it’s something like 81 or 82… it’s morphed from its original intent in a way that the US cannot sustain financially.
Entitlements are such a large part of the problem that the only way to fix the US economic situation, avoid crippling inflation and tax increases which will hammer our economy, and avoid selling our grandkids into slavery to China et al, is to solve that problem. The recent Health Care bill only made things worse (I suspect a lot worse) since we’ve not only added another huge entitlement that people will get used to, SS/Medicare-style, but we’ve lost our best possible source of entitlement reform by using it to ‘pay for’ that bill, making it only marginally damaging to the budget on paper.
One reason it’s “fashionable in lefty circles” to ridicule this movement is that it didn’t discover its commitment to fiscal responsibility until a “lefty” got elected (despite the large expenditures of the previous administration), so they suspect their motives may not be completely pure.
Not in the sense that they are meant to deceive (well, outside the masses who are more concerned with Dancing With The Stars than our country going down the fiscal tubes)… rather in the sense that they are a wealth transfer from those of working age (less wealth) to seniors (more wealth). It’s well known that people get people get far more money out than they put in, even accounting for the ‘investment value’ over time.
Like all Ponzi Schemes, SS “pays returns to separate investors from their own money or money paid by subsequent investors, rather than from any actual profit earned.”
Right. Your employer not only takes money out of your paycheck, but sets aside other money (yes, technically yours in an account for your employment) and combined pay into a plan. So, you’d prefer only having what they paid for your health care going to hire someone else instead? And then, hopefully you can find a decent coverage on less money, or for more out of pocket?
401K’s are a relatively safe way for most people to invest. These are often partly matched by the employer after an initial period. Now, you’d rather manage your own funds and leave your match behind? Besides not having your match, if you are not someone who does their own investing, they might not save the money at all. Remember, part of our economic debacle is that we have no savings to speak of. 401K’s are what most people have in savings. How does endangering them help us?
And you want to leave this match money on the table so that they hire someone else? Or at least that might be what they claim. A private business could just pocket it they wanted.
And many pensions were contracts made with people long ago. Advocating that the government break contracts with people is a fearsome business practice as I see it. We’ll have a tough job market for years and we should remove employment incentives? And in the public sector, better benefits to make up for lower pay is what attracts govt. workers. We could put more cash into the economy by giving them lesser benefits and upping their pay scale. Yet this wouldn’t likely cost you any less. More and more in fact as pay levels increase over the years.
SS is absolutely a Ponzi scheme. Current deductions are not socked away for the person they’re deducted from, earning some return that will sustain future payments–they pay out to the current payees (the previous “investors”), and the money will run out as boomers age. From the SS site:
It is the very definition of a Ponzi scheme, in every meaningful way. The system as it was designed and as it is currently being executed is a pyramid that will collapse unless we find some other way to fund it–in which case, it will still be a program that cannot sustain itself, we’ll just find some other way to obscure that fact.
Define capitalism and how close the US and other countries are to a pure model of it.
Fact is most countries have some mix. Communism as an economic model was an ideal and an unachievable one at that. Capitalism, in its purest form, is likewise unworkable in the real world. They are ideals but not achievable.
The countries of the world are some mix. Makes sense too since usually the right answer lies somewhere between two polar opposites.
European countries these days are generally considered to be far more “socialist” (in that they have adopted more aspects of socialism) than the US is.
The conservative wing in the US is dogmatic. A capitalist model is just “right” in their view. As a matter of principle it is just more fair to them that that you get what you work for, are master of your own ship and if you sink it has to be your own fault and no one else should have to help (they can help if they want but not be forced to).
Ideals are all well and good but they ignore the realities. Countries that are more “socialist” than us beat the US as less “impoverished” (as linked above). The wealthy, in their efforts to keep their hard earned money such that less gets back into the economy, actually hurt themselves more than had they paid higher taxes (again as linked to earlier in this thread).
The wealthy take a stance akin to the following:
I give you $1,000 but you have to give $50 to that guy over there.
Or…
I give you $850 but you can keep it all.
Conservatives invariably choose the latter because they’ll be damned before they give a dime of their money to someone else. As noted earlier I have seen people on this board take that stance…explicitly.
The rich do well when the country does well. The current climate some do well but not as well as they might. But it is uncertain times so pilfer the cookie jar and like a game of musical chairs hope you’re among the few left with a seat at the end.
Everyone else? Well, they are clearly lesser and deserve not having a seat cuz they suck and are not worthy. Strong survive and all that.
Otherwise, why can’t I just have the funds deducted from my paycheck purchase a T-bond (or something else) in my name, and therefore give me an asset that belongs to me permanently?
What do you think it is?
Terse, ad hominem attacks don’t really help you…if indeed you want to claim to be part of the over-14 crowd.
You’re confusing welfare and a basic safety net with assets that provide retirement income. The latter is about 1,000x the aggregate value of the former.
Why would you trust a government employee to do this better than yourself?
You would prefer to sign over your rights, and your money, to someone else to dictate to you how to manage your assets?
I’ll ask the question again…why can’t I have the 15+% deducted from my paycheck purchase an asset in my name, like a T-Bond, that I retain ownership of permanently? I can draw from that in my retirement.
Isn’t that sweet. But it doesn’t change the fact that as a matter of dollars and cents, this “pension” has had its funds pilfered by the corporation, and it will run out of money. This is a matter of math, really. It’s not some right or left issue–SS cannot sustain itself. Its own @#$%ing cite says so. It’s a Ponzi scheme. It’s the poster child of irresponsible government programs, voted in by imbeciles because some future generation or administration will have to deal with the devastating economic catastrophe this will produce, when millions of people who have “invested” in it cannot be paid their “stipend.” Contrary to the belief of many in this country, the government can’t magically keep running up debt and printing money as a strategic solution to, well, everything.
It at least provides their investment the possibility of increasing to some extent after the market tanks, as opposed to the current “we have no idea how future phases of recipients will be paid at all, 'cause there won’t be any money in the trust fund” approach.
The second pegs national (federal) welfare spending at $313 billion per year.
That comparison is a bit of apples and oranges, since one is an accumulated liability and one is annualized spending. But even if you multiplied the latter by 5x or so to account for the discounting, you have $1.5 trillion on welfare vs $107 trillion on SS/Medicare. About a factor of 70x, instead of the 1,000x guess that I hazarded above. So I was off by an order of magnitude. But the difference is still huge. The two aren’t even comparable.
What other way is there to be ‘safe’? There is no other way that is ‘safe’. Are you going to believe a government official just because he stands up on a podium and promises you that if you give him your money, and sign over your rights of decision-making, you will be ‘safe’?
Yes, the stock market and the value of people’s 401ks went down. That represents the market value of earning power of all public companies traded on the US exchange. There is also a bond market that people can invest in.
There is also real estate, art, gold, investment in private businesses, foreign exchanges, and a host of other things that somebody can choose to invest their money in for their own retirement.
Hell, you can even do the simplest thing if you want and buy US T-Bonds as an investment, if you prefer to trust the US government as a creditor to steward your assets better than those other options. Supposedly that is sort of what SS is doing now anyway, although you as an individual aren’t even allowed to keep ownership of the assets that your own money goes to pay for. The government takes that money to pay other people it has already promised benefits to (a Ponzi scheme).
Where do you think the actual wealth comes from to pay retirees, my friend? It doesn’t come out of thin air, or from a printing press at the mint. It either needs to come from
Drawing down existing assets
Living off the interest or earning power of those assets
Forcibly transferring wealth from someone else
Just because the government says “Don’t worry…give us your money now, and we’ll take care of you” doesn’t mean they actually will have the wealth to do so.
The people in Greece are finding this out the hard way, right now. Their government promised far, far too much to it’s citizens and finally ran out of the borrowing power on the international markets to deliver on those promises. There is no more wealth left to pay Greek citizens what had been promised to them. Look at the results.
But you, apparently like so many others are willing to believe a government official and sign over you rights and your money because it makes you feel ‘safer’. You are willing to trade liberty for a promise of security. You will get neither.