Privatized social security

[fishingnut]

i think we are saying the same thing, but coming from the opposite sides. there should be no correlation between christians and jesus and the republican party. JFK was a catholic and a democrat does that mean in 1960 and 61 jesus voted democrat>

You dont get the joke...

it was just alittle joke

[asdf_admin]

no. exit polls are after the election. that is what is fuct about America ... fucking usage.

[DreamGirlie]

but again, is it OK to hate them b/c they are truly religoius??

if it is, then should we hate jews who follow kosher?

muslims who do daily prayers?

:?

its a fucked up world that needs a lot more acceptance rather than infighting between people. sooner or later we might realize that we are stuck here together.

i agree. i may disagree for the most part with what most religious people think but i still accept them because without doing that you will have nothing in the long run.,

agree to disagree.

[toasty]

Re: Privatized social security

Interesting take on the SS issue below, check it out if you've got a moment:

Bush Marketing Beats His Plan
By Allan Sloan

You've got to give President Bush an A-plus for the way he marketed the Social Security proposals in his State of the Union address last week.
"If you've got children in their twenties, as some of us do, the idea of Social Security collapsing before they retire does not seem like a small matter," he said -- a sentiment with which even a skeptic like me, who has twenty- and thirty-something kids, totally agrees. You can't argue with Bush's stated goals of making Social Security financially sound to allow Americans a secure retirement. But the centerpiece of his proposals -- allowing workers the option to divert up to 4 percent of payroll taxes into private accounts -- doesn't do anything to fix Social Security's financial woes. Instead, it's a fiendishly clever device that serves the political goal of remaking the nation's most popular social program so that it's "a better deal" for younger workers. There was a twinkle in Bush's eye when he said that, a clever allusion to the New Deal of Franklin Delano Roosevelt, father of Social Security. You could almost hear the Democrats gnashing their teeth.
In their current incarnation, you'd almost certainly want to sign up for these accounts if you were younger than 55. Yes, you'd have to accept a smaller guaranteed benefit. But you'd come out ahead if your account produced an annual return -- cash income and price gains -- of more than 3 percent above inflation. That's not a slam-dunk, but it ought to be attainable because you would have a choice among a handful of high-grade, very-low-cost, very diversified mutual funds. But there's a catch. You would own the account, sort of, but you wouldn't control it. And you'd have to fork over the aforementioned 3 percent return -- by taking a smaller benefit -- when you cash in your account.
Bush, brilliantly, is marketing these accounts as empowering people who'd have no other assets. But I don't think things would work out well for these folks. There would be strict limitations on the accounts -- you couldn't take money out of them before you retire or even borrow against them. And the odds of low-income people being able to leave a significant account to their heirs -- one of Bush's major selling points -- strike me as remote.
Here's why. When it's retirement time, low-income people would probably have to convert most or all of their private accounts into annuities to have enough money to live on or to meet requirements that their guaranteed benefits plus annuity income would exceed certain levels. If you had to convert your entire account into an annuity, there would be nothing left for your heirs when you died. Higher-paid people, by definition, would have bigger private Social Security accounts and less need for annuity income than lower-income people would. This gives them a far greater chance of having something left to hand down to their heirs and gives lower-paid people less chance. Not to be snotty, but we higher-income types hardly need additional breaks. We've already got plenty.
Staying power matters big-time, too -- and higher-income people have more of it than lower-income people do. Although stocks tend to rise over the long term, you'd have to cash in some or all of your retirement account to buy an annuity when you retire. That puts you at the mercy of events. Consider the following, produced at my request by the Center on Budget and Policy Priorities. Say you retired in March 2000, with a private account that held $100,000 of stock in a Standard & Poor's 500-stock index fund. (Index funds match the performance of a benchmark; they don't try to beat the market.) Your inflation-adjusted annuity would have been $7,558 a year -- about $630 a month -- by the center's calculation. But if you had had the same number of shares in your account and instead retired in October 2002, your account would have had less than $60,000 in it. Your annuity: $3,352 a year, or $279 a month. The combination of lower values and lower interest rates is a double whammy. You see the problem? You can get much less -- or much more -- than someone who has saved at the same rate as you but retired a little earlier or later.
If you've got financial staying power, you could wait for better days or buy the smallest annuity the government will permit. If you don't have staying power, you have to take what the market gives you. Higher-paid people thus have a big advantage. The guaranteed Social Security benefit, by contrast, is tilted toward lower-income people, with a benefit of about 56 percent of Social Security-covered wages for a minimum-wage earner, 30 percent for folks like me who have reached the Social Security maximum every year. You're swapping benefits skewed toward lower-income people for investment opportunities skewed toward higher-income people.
I'm in favor of private accounts constructed along the lines that Bush suggested. But the accounts ought to be in addition to the basic benefit, not a replacement for about half of it. Democrats are crazy to oppose private accounts. They really do empower you. The current generation is used to investing and is understandably skeptical about government promises. This isn't the 1930s, when only a handful of people bought stocks and many of them came to regret it. It's the aughts, guys, get with it. FDR's been dead for 60 years. The world has changed.
If the president really wants to fix Social Security rather than pick a political fight -- and the Democrats feel the same -- it wouldn't be difficult. They'd compromise by putting more money into the system by raising wage taxes a tad, taking less out by increasing the retirement age and trimming benefit formulas and setting up private accounts funded by wage earners, not by government borrowings. Put a few willing negotiators in a room and a deal's done in a month. I won't hold my breath, though.
Bush has marketed the pants off the Democrats by setting the terms of debate. Do you want to pay higher taxes or lower taxes? Clearly, lower. Do you want to pay estate tax or not? Do you want private accounts, or don't you? He has done a fabulous job of showing the goodies -- and of hiding the costs. People, naturally, have opted for the goodies. The Bushies are in full sales mode, including sticking recordings on Social Security's phone lines preaching that the system has to change. In the name of empowering my kids, he's asking them to pay full freight for my retirement and for trillions in new borrowings, while forking over the same wage taxes for lower benefits. If he can sell this one, the Marketing Hall of Fame should start planning his induction ceremony.
Sloan is Newsweek's Wall Street editor.

[hoodednight]

Re: Privatized social security

I have a couple of comments....The first one is kind of a question. BSully
writes:

The 'Stock Market' is a building where people gauge the success
or failure of hundreds of unrelated businesses. If a business is successful
then people (like you and me w/ 401k's) want to be a part of it and buy a
piece of their company(stock). The more money that you and I invest in
companies, that have proven to be successful, the more they are able to
expand, improve infrastructure, create more jobs, etc and thus become
more profitable and we gain (not even counting the additional jobs added
to the economy)..

I'm not an expert on the stock market by any means, but I was under the
impression that the only time that business receives money from stock
trade is when the IPO is offered. This offering is called a "cash infusion"
providing money for the things that you discuss in your post. Aside from
the board members and employees holding stock, the trading of stock
after the IPO has no financial benefits for the company. Its stock
price is just an indication of whether people are willing to gamble on their
perservernce

Second, why the hell do Americans view taxes as the ultimate evil?
Instead of complaining about taxes, how about comlaining about
government accountability? How about demanding visibility into the
system? Isn't this suppose to be a government for the people, by the
people?

[thesightless]

when a company issues stock through an IPO, it basically sells a large chunk of its stock, never all of it. and they do this by offering it to brokerage houses firstly. those brokerage houses sell it on the open market. to you, to me, to anyone. they retain most of the stock in thier own common stk reserve and sell it as needed. they also buy back stock. that is how a company can make money selling stock after the IPO

[hoodednight]

Re: Privatized social security

So, who, what or where is this reserved common stock held? At this point,
it the company is only promising to divest itself of ownership in exchange
for cash from shareholders, right? And then when company buys back
stock, it consolidates ownership and decision making power....

Or, Am I not understanding the process correctly?

[thesightless]

you hit it on the head.

there is usually a common stock reserve account that the company holds onto.

and BTW only voting shares have a say in company policy. non- voting shares usually only have the right to board elections.

[timkell]

When a company buys back stock, that stock no longer exists, but they reserve the right to sell it again.

So, say you own 1% of a company. If that company buys back 10% of the oustanding shares, you now own 1.11% of the company. But, they are always allowed to sell those shares again if they wish, bringing you back down to 1%.

Weird, I know, but true.

[hoodednight]

Re: Privatized social security

I guess... my original point was in reference to a post by another member.
In an earlier post, someone was trying to justify privatization by claiming
that when more people invest in stock the publically traded companies
receive extra revenue to invest in their business and the economy
expands.

I think we have established from the last few posts that companies only
obtain "cash infusions" when they offer IPOs or after they sell stock that
they previously held in reserve. Stock prices are effected BY the economy,
not the other way around. The only economic expansion that will result
from privatization of Social Security is the very small sector of investment
firms and their employees......

[thesightless]

yeah, the privatization would help out a lot if people got into tax free municiples. think of that. taxes would be able to be lowered and the gov't actually could make more money in the end. its a cycle. you give them your money, they use it, you get it back with tax free interest (SS, btw, is taxed). im all for this idea. but there will be the stupid day trader who abuses his account and loses everything.

[mylexicon]

Re: Privatized social security

K....there is a lot of yelling and screaming going so.....

LET ME EXPLAIN THIS IN SIMPLE TERMS SO EVEN THE MOST
IDIOTIC PUNDIT WILL UNDERSTAND!!!

Privatizing social security is the right thing to do ideologically because it's your
money and the government can't be trusted with it. At least 50% should be
allowed to be used however you want because you pay 50% of your benefits.
The reason we may not be able to privatize social security is because the
government is a bunch of pathetic beady-eyed scoundrels. When social
security started it was meant to be set aside in funds where the money
would remain untouched or only partially used. Then some d-bags in Congress
decided that we should treat social security like bonds. They collect cash
every year from taxes then use it for that year's budget while making interest
payments/benefits to people who are of SS collection age. Every year it gets fucked
up worse. They increase the collection age because the interest expense is too
high and the can't cover the payments. In truth,
the privatization plan isn't much different than Gore's lockbox plan other than
the party responsible for retaining custody of tax revenues.

THE DILEMNA:
b/c Congress gave themselves permission to deplete SS cash accounts we
now are faced with a huge dilemna. If SS revenues are put into private accounts
and not into the general fiscal account, the government will have to borrow
trillions of dollars up front to replace the money they shouldn't have been
spending but did anyway. Now here is where things get interesting. The only
way the government can raise revenue is by floating bonds, raising taxes,
or hoping that GDP skyrockets and gives the government a huge surplus.
GDP is unreliable and raising taxes is out too. The only way it can be done
is to issue bonds. That's why democrats scream things like "privatization of
social security will make us accountable to the Chinese!!!!" Becuase our
currency is trading low against many other currencies many countries are eager
to buy our securities. When a country like China/Japan/Russia/etc. buy our
securities they have to change their money into ours. When that happens
the demand for US dollars rises causing our currency to be more valuable
and therefore other foreign products look relatively cheaper. The Bush administration
is trying to counter this by making us securities/bonds more appealing to
U.S. buyers by making them legal for U.S. private accounts and by
increasing their return........note the recent hike in interest rates. With some
luck and some temporary legislation, the government will actually be able
to borrow back the money they allowed to go to private accounts. That way
our currency value won't rise and we won't owe foreign investors trillions of dollars. This is
what the entire fight is centered around. The real fight is whether or not
the United States can survive privatization given its diabolical spending
habits over the last half century.

IT HAS NOTHING TO DO WITH GREEDY YUPPIE SCUM AND
LIBERAL COMMUNIST TRAITORS!

That is just inflammatory language the government uses to invoke
emotion so they don't actually have to explain what's going on.