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?
Lucky for the masses we have advocates like you that will make decisions for us. Thanks, Mom. Can I have a cookie now?
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.
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.
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.
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?
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.
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.
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...
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.
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?
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.
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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