Tuesday, June 20, 2006


The You're On Your Own-ership Society

Ever since the New Deal, Americans have expected to be able to live in relative comfort and security at the end of their lives. We no longer have that security, thanks to the assault on the social compact that proceeds apace under George W. Bush. Employers are mostly abandoning real pension plans that guarantee their loyal workers a retirement income, and most workers get no help at all in effectively managing their retirement "savings".

As traditional pensions fade into history, employers have shifted the financial risks of a secure retirement to individual workers through company-sponsored savings plans like 401(k)s. No matter how well you save and invest, the list of risks is a long one, according to Alicia H. Munnell, director of the Center for Retirement Research. "We now have all the risks," she said. "From the first day, the employee has to decide whether or not whether to join the plan, has to decide how much to contribute, has to decide how to invest those contributions, has to decide how to change those investments over time, has to decide what to do about company stock, has to decide what to do about cashing out when moving from one job to another. And then, at retirement, this person is going to get, if they’re lucky, $100,000 and be told goodbye and have to figure out what to do with that over an uncertain lifetime. So it’s an enormous challenge." As employers have shifted responsibility for retirement to their workers, they've also left them largely on their own when comes to learning how to managing their investments. Most individuals are poorly prepared to duplicate the professional investment management that is a critical component of traditional public and private pensions. So even those workers who do accumulate retirement savings are often frozen into inaction when it comes to the daunting task of actively managing their investments, according to Lockwood.
The Republicans in power want to do the same thing to the Social Security retirement insurance program: eliminate the security, eliminate the shared responsibility, and leave workers on their own for making decisions they are not educated to make. If they get their way, within a generation we'll be a society of aristocrats and serfs. Guess which they intend to be, and which they intend us to be?
I had fun this weekend talking to a distant relative who just happens to be a twentysomething architect and free-market Social-Darwinism, worshipper (I'm betting he's a Randroid -- he sounds like someone who read The Fountainhead when he was in junior high). My spouse actually managed to get him to fight with his right-wing NRA-member dad over the fact that the Bushies are undermining freedom in America.
Oh, yes: The young twentysomething rellie thinks he's an aristocrat, but he's really just a serf. He won't discover that until he hits forty, but he will.
"...making decisions they are not educated to make."

Lucky for the masses we have advocates like you that will make decisions for us. Thanks, Mom. Can I have a cookie now?
Here's your cookie, dear. Now let's sit down and have a nice chat.

Are you claiming that every adult American is capable of understanding the market, Sandy? And are you claiming that they should bet whether they live indoors on the stock market?

Does that include, say, a guy who has a sixth grade education? A fellow with Down's syndrome (many such people work)? A legal immigrant from El Salvador who has never heard of stocks and bonds? A wife who always relied on her husband for the finances (or vice versa) and suddenly-- due to divorce or death-- finds herself on her own?

If the Republicans want to enroll everyone in classes to understand financial instruments, pay for a Scottrade account, and give them subscriptions to financial magazines, fine. But we have an uneven playing field in which even very well educated, very savvy investors get burned.

It's very generous of the Republicans to offer to dump unsophisticated investors into a difficult market so that they can be relieved of their money.
I don't see my cookie anywhere, but that's your style Charlie, trying to create something out of nothing... In any case, I don't understand why a mandatory savings account is somehow worse than letting the government keep the money in "trust". You don't have to invest your savings account, so even if MEC's paternalistic argument makes any sense (it doesn't but different story), no one has to understand portfolio theory. What's the difference between the government holding the funds and individuals holding them? The difference is, that the government will spend the money in the time before you retire (as it is doing right now). Yes, yes. Even as you read this the government is spending funds it is supposed to be saving. Oopsy.
Don't be an idiot, Sandy. And don't confuse "investing" with "purchasing," and when you put money in Social Security *that* is just what you are doing: you are *purchasing* a kind of retirement insurance.

It's like a "whole-life" insurance policy that you'd buy from say Northwestern Mutual, only the entire U.S. workforce is the "mutual."

That's the beauty of it.

It's fair, because everybody with earned income pays into it and benefits from it, assuming they live long enough.

And it works. Social Security has successfully reduced retirement-age poverty among working-class families.

If your basic problem is that government borrows from the SS fund to support other expenditures, then address that. Tell Bush to stop doing it.
It hasn't been just Bush. Congress is the only entity that can actually "spend" tax proceeds anyway, and it's been spending, not saving social security dollars in every administration whether controlled by either party. It's disappointing that you moron's assume automatically that everything wrong is a REepublican fault and everything right is because of Democrats. What you need to understand is the inherent nature of government and its proven spending-happiness.

The only reason social security has "worked" as you put it, is because there have been more dollars coming in than going out. No one disputes this in either party. Also not in dispute is the fact that the social security funding will run dry because of the demographic shift and the government's failure to save and not spend social security tax proceeds. The real question is how to fix the problem. There are few ways. One is to raise taxes. I know you like this because socialism is fun for you.

Furthermore, social security is not insurance. I also like the point you made about if people "live long enough". But you probably wouldn't want anybody to be able to keep their money in a savings account to pass to spouses or heirs, so I guess if they die, oh well for them. And for the second time, investing need not enter the picture here.
I hate to break this to you, Sandy, but Social Security is insurance. The full fund is called OASDI, which stands for Old Age, Survivors, and Disability Insurance It pays to people who are disabled and to widows.

Now, it is true that "the government" is spending money it doesn't have. That's because Republicans are in charge of it. The presidency, Congress, the courts, and almost half of state legislatures-- no party has held this much power since 1928. When Republicans had it and used it to destroy the economy.

As for the government creating a retirement fund based on stocks, that's what's called "socialism."

If you're going to argue something, and especially if you are going to disparage others while doing it, shouldn't you at least know something about it?
Oh, one other point, Sandy.

The preferred way to fix Social Security is to raise the growth rate. Higher wages means that Social Security receipts also rise.

Unfortunately, for the last thirty years, the only time that wages have risen above inflation is under Clinton. Republican presidents have produced inferior economic growth, inferior market performance, and inferior wages.

Debt, they're pretty good at.
There you go again with this minless ranting about Republicans. Blah blah blah. I'm not disputing that Republicans have voted for spending from the social security pocket. But if you're gonna sit there and tell me that the Democrats haven't done the exact same thing (since the program's inception) then you are truly beyond hope. One of these days you might realize that you don't have to be either a Republican or a Democrat. I'll admit, it's possible (though I won't say how unlikely) that Democrats have everything figured out and that Republicans are messing it up. But one thing is true, you have been brainwashed by one side or the other.

In any case, social security is not insurance. It doesn't really matter what name somebody gave it. If that was true, the Democratic People's Republic of Korea would be the Democratic People's Republic of Korea.

And wasn't there a Republican congress when Clinton was in office? There's always sombody to blame and somebody to whom you can give credit. But credit is owed to neither party.

Standards of living are so much higher today than thirty years ago that I just don't know where to start with that one. Government has nothing to do with that. Restrictions on government power does.
Oh, one other point, Chuckie.

I understand that because you favor socialism that you and I can never agree on most things. But I like to read what you have to say as affirmation of my views are nothing to be taken lightly...
Sandy, I'm sorry to be indelicate in telling you this, but you are lying.

Social Security is insurance.

You pay in money. If you are disabled, you get money. If you become old, you get money. If your spouse or your parent paid into Social Security and you are a survivor, you get paid money. This is, by any definition of the term, insurance. Indeed, if you are one of these people who can only believe that the sky is blue if they read it from a right-wing source that hates Social Security, you will find that even they recognize that it functions as insurance.

By the way, are you familiar with term vs. whole life insurance? My guess is your knowledge does not run even that deep. Insurance whose value evaporates if you miss a payment isn't the way most people want to live. Private insurance is not necessarily associated with the creation of an asset, and it is always associated with significant overhead fees.

So, you are welcome if you like to define Social Security a ham sandwich. That would define you as a loon. It would not change the fact that social security is insurance.

Moving on, I will be happy to instruct you on budget topics and spending if you are willing to learn. In fact, Republican presidents, especially when combined with Republican Congresses have run up vastly more debt than when Democrats ran the store or when Democrats controlled two of the three bodies that determine the budget. Vastly.

There are three reasons that it's even possible to claim that the standard of living is higher today than it was a generation ago without causing mass laughter: (1) technology and the use of cheap foreign labor has made some things cheaper, (2) Many more spouses and children are working than worked in 1975, and (3) America and Americans are drowning in debt. The latter two are generally considered good things. The first has been largely driven by government investment. Virtually all of the gains in real GDP have gone to the wealthy, and the poor have actually gotten poorer. Source? The aide whose Southern Strategy won Richard Nixon the presidency: Kevin Phillips, in The Politics of Rich and Poor.

Now, I do want to advise you against a career in mindreading. You are very poor at it. You say "I like to read what you have to say as affirmation of my views are nothing to be taken lightly..." In reality, your views are to be taken about as seriously as other forms of manure: unpleasant but of no weight beyond the miasma they exude.

My apologies for telling you the truth.
Social Security is not insurance. Social Security is a tax. Taxes are not insurance. It makes no difference what purported benefit you get from the tax. By your logic, taxes spent on roads are also insurance, in case we want to drive somewhere. Taxes spent on the military are insurance, in case we’re attacked. I don’t know what dairy taxes are insurance for, but you could probably tell me. In fact, breathing is insurance in case you want to keep living. And jobs are insurance, too, in case you want to by a range oven. See Chuckie, you’re mind is not centered. Taxes are obligatory, completely ruling out any parallel between what the government makes you pay and what you could purchase via your own free will.

And again, I have yet to argue that Republicans can’t be spend-happy folk just like anyone else. For the last time, having strong opposition toward the Democratic Party for its socialist views does not mean that someone is a Republican. Only a Sith deals in absolutes. You completely fail to recognize that again and again and again because you’re weak and narrow-minded.

But because you brought it up, how do you explain Democrats being a majority in Congress for forty years until 1995, while whining about spending and controlling the store? 40 years, idiot. Wanna crunch some numbers from that time period? Have at it! You’ve got some explaining to do seeing how Congress spends the money… (Granted, the President signs the budget, but that would only speak to my previous point that both parties are suspect… you weak-minded-socialist.) OK, that was uncalled for!

And life is much better today than it was 30 years ago. This is a point that I refuse to argue with anyone (much less you) because all your nay saying and talk of gloom and doom can’t explain why over 98% of all US households have a color TV and a refrigerator.

I also have not had it explained to me why, “poor” people, defined as being poor by the Census Bureau (for those of you who like data), happen to have home ownership (46% percent of them), an average home size of 3 beds and 1.5 baths, air conditioning (75%), microwaves (73%). Almost half have a washer and a dryer… and that’s all just the small portion of the population defined as “poor.”

Indeed real suffering exists and should be addressed but idiots like you make the problem appear so extreme that it becomes extremely difficult to help those truly in need. Jerk. And the lies that you spread about the scope of such pain are reprehensible at best. Actually, it’s not lies, it’s ignorance.

And what’s wrong with spouses working?
Nice attempt to smear Charles on something he didn't say or mean RE: "working spouses", Sandy. But "smear and distract" is your stock in trade.

The fact is that, as Charles has already pointed out, even with both spouses working in a typical family, most families are still losing ground economically. Back in the 1970s, when fewer women were in the workforce, families could and did save money. Now, even with women working, most Americans have no savings at all -- and are in fact up to their ears in debt.
Nice response to an ad hoc comment. Out of all that, you address the one joke that I made. (Except for the Star Wars reference.) Oh, boy... But because you mention it, how is it possible that families were able to save with one income but can't save with two? Somebody's arithmetic is afoul. Lemme guess, Republican presidents... still a crap argument as the congress was controlled by Dems (back in the 1970s... your timeline pick, not mine...)
Look, Sandy, when you're arguing with the dictionary, you've really set yourself in outer space. Cato accurately says that Social Security provides INSURANCE against disability and the death of a wage earner. It fuzzes on the fact that it is income INSURANCE for old age, but by any reasonable definition of the term, it is insurance.

Lots of insurance is paid by taxes. Check the Price-Anderson act, which INSURES against nuclear reactor meltdown. Or the disaster assistance insurance that the government makes to people whose houses get wiped out. No private insuror will write such policies, and indeed many of them renege on the policies they do write. So the government INSURES all of us against events like hurricanes. Using taxes.

If you would concede the very obvious fact that Social Security is insurance, I'd be willing to spend some time talking about whether taxes are the appropriate way to fund that insurance. Iive even given you links to Cato, so that if you back away from this inane insistence that black is white and up is down, you might be able to make a case for your beliefs.

Indeed, I would welcome showing you in simple terms how the Republicans have looted the Treasury, and what they have spent it on, namely paying off their big contributors. I would be happy to discuss with you what those statistics you cite on poverty mean-- hint: they don't mean what you think.

But people who want to argue with the dictionary have placed themselves outside of the realm of reasonable debate.
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