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Anyone still think Privatizing Social Security is a good idea?

Discussion in 'Political Discussion' started by mcgraw_wv, Oct 9, 2008.

  1. mcgraw_wv

    mcgraw_wv Rookie

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    The financial crisis we are in right now would have crushed people in private retirement accounts instead of Social Security, putting our elderly people and people in need on the streets starving... When the idea was pushed so strong from the Right... I warned of this.

    This financial crisis we are in right now shows how simply bad of an idea that truely was...

    http://www.aflcio.org/issues/politics/mccain_retirement.cfm


    Whew... we dodged a bullet on that stinking mess of an idea from McCain and Bush...
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    Last edited: Oct 9, 2008
  2. mcgraw_wv

    mcgraw_wv Rookie

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    And this leads me to ask the question...
    What decisions / ideas has McCain propsed that turned out to be right, smart, or even just not devestating...?

    If we are going to judge judgment in these candidates... Where is the proof of McCain's solid judgment?

    - Iraq war will take days
    - Greeted as liberators
    - privatizing social security
    - Deregulation of wall street and business

    Can anyone list and detail his great successes in judgement?
  3. BelichickFan

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    #24 Jersey
    Actually I do as long as it's managed in a way so that people can't be all in stocks forever. I'll get back to that in a second but first, the wording "divert a portion", while correct, overstates it as it was a very small portion. But moving on, as I have said in numerous threads, the problem is with asset allocation. If I were allowed to put a piece in my private account I would still prefer that - however too many people don't understand the way to invest so we would have to have had some regulation along the lines of "you have to have as much in money market/bonds/etc as a percentage as your age" to stop people from leaving everything in stocks.

    But, yes, as a 41 year old I would prefer to have been able to invest a piece by myself and have the equivalent percent reduced from my SS payments when I retire. But through regulation or education we would need to make sure it didn't just run unfettered but I said that 18 months ago too.
  4. PatsFanInEaglesLand

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    Yes, for people my age(36) it was and still is a good idea.

    Obama took exactly 1 stand, yes a whole whopping 1, it was opposing the surge and he was dead ******* wrong.
  5. Harry Boy

    Harry Boy Look Up, It's Amazing PatsFans.com Supporter

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    I agree, you got a good one with that, there are many more things I as a "Neo Con" don't agree with Bush/Mccain on, Illegal Aliens being the Big One.
  6. mcgraw_wv

    mcgraw_wv Rookie

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    I believe and understand your points, as I feel the same way for myself... However I worry about all the other people, my grandmother, and other elderly people who do not know how to invest, putting their well being in the hands of some financial advisor...

    Think about this for a second... you pass away before retirement, your wife relies on small amount of revenue and yoru Social Security check... would you feel comfortable with the market determining if your family eats or not, has shelter or not? Granted, I know you would know how to invest in your retirement... but will everyone that may rely on it in your family know what and how to do it... and do you trust some advisor that is paid to push certain advice?
  7. Real World

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    Yes, absolutely. IIRC most of the proposals that were floated only allowed for a portion of an individuals savings to be invested in the market. If you look at the rolling averages of the stock market, throughout it's existence, there is something like an average 18% gain over every 10 year period. Since a retirement plan is a long term investment, that usually spans 2-4+ decades, the current situation is somewhat irrelevent in the grand scheme of things. Remember that 9/11 saw a market crash, only to see it crack a record 14,000 some 7 years later. Obviously the future is unpredictable, but if history shows us anything, I'd expect that the market will return in due time.
  8. BelichickFan

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    #24 Jersey
    Like I said it would have to be limited. I would limit the allowable decisions enough that many Republicans would be turned off but I don't have a lot of confidence in the average person I'm afraid. But if you had an automated system that ensured that a percentage of at least your age is invested in government securities or very low risk bonds, etc, then it would be OK.

    A simple formula so that until you're 45 you can invest fully in stocks but at 45 you have to be at least 45% in safe investments and that could go up incrementally so that by 65 so have to be 90%, or whatever in safety.

    It could work but would need safeguards and would have to be explained a lot better than it has been. But it's dead now.
  9. mcgraw_wv

    mcgraw_wv Rookie

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    I know, I understand that...
    But tell that to the people who begins withdrawing their private SS funds in the time of a crash...

    So it's a crap shoot to when and how much you get to retire with... if you retire in the midst of a crash, tough...???
  10. Stokes

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    RW has it, the plans rely on long-term investment, as the trend over 30-40 years is always up. Also, weren't the plans optional? So in the cases you worry about mcgraw (people that don't know how to invest), they can just stick with the gov't program rather than pulling the money out. To me it makes sense, its your retirement money, and if you want to pull a portion and risk it in the market for the potential reward of it growing much faster, why not?
  11. mcgraw_wv

    mcgraw_wv Rookie

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    But that doesn't matter, my very conservative 401k is down 25% this year... If you passed away 4 years ago, your wife would have to make due with 25% less money in a time when Gas, Food, Housing costs 25% more... And that is the issue.

    The way SS is right now, you get a flat check no matter what happens, you know this is the money you will receive no matter what... no matter the issues in the markets, or wars, or anything, your family will be taken care of with a set amount of XXXX a month... and that's comforting... Yes, they may not be rich, but at least I know they won't starve or be without shelter.


    I know overall the Market will give you a gain, but SS payments have gone up over the last 4 decades as well... But if you get stuck retiring during a crash, like now, your looking at 30% loss in retirement, and your no longer putting money in to buy "shares" at a low cost to ride the wave up.

    For me now, I don't mind the crash, just means im getting more for my money now... and on the way up, ill be happy... for people withdrawing right now... they are screwed.
  12. Real World

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    I'd like to emphasize that any plan I'd support, would be porportional only. I wouldn't support allocating all SS dollars into the market. Furthermore, Bill Clinton was a proponent of investing SS funds into the market too, back in the late 90's.

    Please note this is from The Progressive.

    Social Security hysterics - Pres Clinton's proposal to privatize Social Security - Column | Progressive, The | Find Articles at BNET
  13. mcgraw_wv

    mcgraw_wv Rookie

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    Because someone like my grandmother, who relies on her and my grandfathers ( passed away ) Socia Security check has no clue what to invest in, and in a time like this, she couldn't live if her payouts dropped by 30%...

    I understand that some of us smart ones should be able to do it... but in the case you are not there to guide it during rough times, what then will your family do? Do you want the security of them knowing exactly what they have to live on, or do you want them living, eating boom to bust?
  14. Stokes

    Stokes Rookie

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    That's why the plans should be optional, and honestly I don't remember if they were or not, but I had thought they were. An optional plan would provide that no risk steady fund for those not willing to roll the dice with the market, but also give people an opportunity to grow their retirement savings if they want at a higher rate than the gov't program. I suppose even if it was mandatory there could just be the option of putting your money in a tax-free savings account and letting it grow at a slow rate.
  15. BelichickFan

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    If you're talking about my actal situation, that drop doesn't matter as we're in our 40s and the loss now wouldn't matter.

    If you were using me as an example but meaning when I'm retired then the Conservative "fund" I'm talking about would be up. My Government Securities option is up 2.86% Year to Date and 4.05 Last 12 months. I'm not talking about conservative stocks but conservative investing.
  16. Real World

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    Privitized funds would only amount to a portion of what an individual actually paid into SS. It wouldn't be 100% of his committed dollars. Wiki has a page on it that helps. I remember some libertarian friends of mine always pointing to Chile as an example. That was a while ago, so who knows how that plan is doing now. Anyhow, the Wiki page gives a pretty good overview of all the different proposals that were floated.

    Social Security debate (United States) - Wikipedia, the free encyclopedia

    In any event, SS is going to be out of business soon.
  17. mcgraw_wv

    mcgraw_wv Rookie

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    So what do you do for the familes, where the bread winner thought he was an investing genius, fails to grow his retirement and actually does worse than Social Security as it is, then passes away and leaves the rest of the family with nothing, or next to nothing to support themselves with?

    One thing we know, the Stock Market will make everyone look like a fool atleast once...

    What do we do to ensure we do not put families in the streets? They didn't screw up their retirement, they trusted the Breadwinner, they are now left with next to nothing... Do we let them lose their house, and go hungry?

    If someone can detail that situation for me, because it WILL happen, not everyone is smart in the market... that is obvious... I do not want to live in a town / country where there are homeless people everywhere begging for money and food... If someone can detail me the solution to situations like the above, I may be open to it, becuase I would also like to stop paying for my parents soon to be SS payments... rather just worry about my own retirement.
  18. Patters

    Patters Moderator Staff Member PatsFans.com Supporter

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    Thank goodness we didn't privatize Social Security or even more money would now be lost and seniors would be in an even more untenable position. Social Security is not and should not be an investment plan. It's a safety net, and I'm sure there will be quite a few people after this crisis who will see their investments largely wiped out and thank god that they still have a reliable safety net in Social Security.
  19. BelichickFan

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    #24 Jersey
    Only if it weren't done right.
  20. Real World

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    Any plan would indeed be optional, and the options would be limited. Bonds, treasuries, or some conservative stock funds. I don't believe someone could take a portion of their SS taxes, and buy a specific stock, or invest in commondities for example. At least according to what I remember, and what I read.
  21. Stokes

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    Here's where we differ I guess, because I would say yes, it is up to the individual to make good decisions, not the government's job to protect people against their own stupidity. Ignoring that philosophy though, even in the case you outlined the family would still have a social security check each month, it would just be smaller by whatever % the dumbass breadwinner took out, let's say 20%. There would NOT be a case where someone gambled away their entire savings in the market, since the plan wouldn't allow 100% withdrawal of your funds.

    Besides you know the wife is making all the decisions anyway so he's not doing sh!t without her knowing about it.

    (edit) also I think RW is right in his last post.
    Last edited: Oct 9, 2008
  22. mcgraw_wv

    mcgraw_wv Rookie

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    And what does government do that is efficenet, cost effective, and "done right"?
  23. Real World

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    It's Nazi World actually, but my friends call me Adolf. [​IMG]

    :D
  24. mcgraw_wv

    mcgraw_wv Rookie

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    Stokes, I agree, I believe in personal responsibility... I do.

    But I also do not want to live in a country where I have to deal with a bunch of people wandering the streets starving and begging for money on every street corner.

    Keeping people off the streets is not only for their well being, but for you as well... it affects the economy, housing prices, and everything in that local area...
  25. Real World

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    Two things, SS alone isn't going to be enough to keep some one financially solvent, and we're talking about a maximum $1,000 of your annual SS taxes being put into a private account. For me that $1,000 would have meant somewhere near 1/7th of my total 2007 SS contributions.

    1/7th = .143, or 14.3%
    6/7th's = .857, or 85.7%

    So as you can see, over 85% of my SS funds would still be in the general fund. I'd only be "gambling", at my option, roughly 14% of my overall investment. So any 20% loss, or gain, would be restricted to 1/7th of my SS alotment, which would then also have to take into account, how long I've invested, when did I begin, what gains were made to that date, and when do I plan on collecting.
  26. Stokes

    Stokes Rookie

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    Someone pulling the Nazi card on you in another thread? That's always entertaining.
  27. PatriotsReign

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    If privatized social security was still going to be managed by government officials, then it can't happen. If we still have to have money taken out of each check and put into a system where the government is involved at all, it can't work, period.

    Who would choose which companies managed portfolio's or would everyone's money be lumped together. If the government has their hands in it at all it can not work. I can't stress that enough....it can not work!

    If they allow us a tax break if WE put money into personal retirement accounts, then ok. But I will never allow the government to have anything to do with my retirement future. It would temp too much corruption over which entities are chosen as investment vehicles. Just imagine how huge this business would be for them. No, it can not work.

    Unless they guarantee we can't ever lose money. Otherwise I'll take what we already have.
  28. PatriotsReign

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    And so who ends up managing the money. Do citizens get to choose ANY investment vehicle they choose or will a company like Putnam manage it and if so, does the government pick who manages the investments? If they do, it can't work.

    Government is getting into buying our banks, our homes and our private companies. I will not let them get their hands on managing our retirement. If this continues, I'm seriously getting interested in finding a militia group to join. The government works for US...WE are the bosses.

    I often get the feeling many here believe our federal government is in charge of us...wake up, they're not.

    WE ARE THE BOSSES HERE GUYS.

    They do what we say, not the other way around. we have choices here.
  29. Real World

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    We're speaking generally to the idea of privitizing SS, and the vague proposals that have come across, in the last 10 or so years. The particulars, specifics, or permanent structure of any deal is anyone's guess, and not something I can say I'd support, without knowing it first.
  30. BelichickFan

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    I'm not talking about the government managing it, just a rule that says at some age, like 50, it all, or most, has to be moved out of stocks. Sililar to the rule that says at 72 (or around there) you have to start withdrawing from your IRA. It's a simple, enforced, rule not government management.

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