I think this is the beginnings of an economy based on perpetual growth and fossil fuel energy running headlong into geological energy constraints. Basically I see an undulatory downward path for the rest of my life. From here out, I think any rallies in our economic condition are going to be met with spiking commodity prices that knock us right back down.
Joined: May 18, 2006 Posts: 4739 Location: Minneapolis, MN
Posted: Sun Apr 22, 2007 5:44 pm Post subject: Re: Isn't social security salvageable?
Denny wrote:
This has gotten so pessimistic. Whatever sins there were from the past, you can start again to get the system stable. Like I said, it was done in Canada, a country without the financial strength of the U.S.A. And, in just nine years it has turned around. I think the government kicked in some money as it too abused the Canada Pension Plan by using it as source of low interest loans. That is behind us now.
In fact, most every western country has a system in which workers pay in to social security for their ultimate benefit at the end. Germany had this way back in the late 19th century!
Any individual savings scheme suffers from the uncertainty of knowing how many years of life to plan for. But, by using big numbers, a properly operated SS system can predict its cash flows much better. And, the corresponding contributions required to support it.
And, it would not entail paying in 70% of one's income. I pay in 7.8% of my income up to $65,000, and then it cuts off.
Speaking as your neighbor, I see you folks have the means, but you don't seem to have the will anymore to believe in, and act on, the potential greatness of your nation.
What has happened? Roosevelt and Kennedy, even Johnson, was able to get people united to believe in a common cause and create an aura of optimism. Perhaps the leadership is weak and has no vision anymore, I don't know.
It's a sad deal. The young people just ain't buying into the SS program. Too bad for them. YES, it will be here for the boomer's. After that? Well, you youngens are on your own. Little do they know or care about the real benefits of the program.
You guy's are going to get what you deserve.
Last edited by vision-master on Sun Apr 22, 2007 5:45 pm; edited 1 time in total
Joined: Sep 25, 2004 Posts: 4675 Location: Boston, MA
Posted: Sun Apr 22, 2007 5:44 pm Post subject: Re: Isn't social security salvageable?
Well, in the United States, we pay 12.4% of all income under $90,000(ish) for SSI, SSDI, and Medicare.
As for your link, it seems as though Canadian Social Security managed to break even by cutting off middle and upper class people from getting their benefits.
That would certainly work in this country.
But it would be a political disaster and AARP would fight it tooth and nail. That's the American Association of Retired People and they have a lot of power in this country.
Moreover, most middle class people haven't saved nearly enough money for retirement, if you cut off their benefits, they will screwed.
The only solution I see is more inflation reporting fraud and a forced savings plan in order to "encourage" people to take care of themselves. _________________ "www.peakoil.com is the Myspace of the Apocalypse."
Joined: May 18, 2006 Posts: 4739 Location: Minneapolis, MN
Posted: Sun Apr 22, 2007 5:49 pm Post subject: Re: Isn't social security salvageable?
Quote:
Moreover, most middle class people haven't saved nearly enough money for retirement, if you cut off their benefits, they will screwed.
Save?
We as a Nation are racking up unprecedented credit card debt.
Quote:
The average American household with at least one credit card has nearly $9,200 in credit card debt, according to CardWeb.com, and the average interest rate runs in the mid- to high teens at any given time.
Last edited by vision-master on Sun Apr 22, 2007 5:52 pm; edited 1 time in total
Joined: Apr 09, 2007 Posts: 6276 Location: Alaska (its much bigger than Texas).
Posted: Sun Apr 22, 2007 5:52 pm Post subject: Re: Isn't social security salvageable?
The offical savings rate includes only money in savings accounts.
If you include money in things like home equity appreciation, the US has a very respectable savings rate.
Many many people sell their homes and use the money to retire to a less expensive place. _________________ "People sleep peaceably in their beds at night only because rough men stand ready to do violence on their behalf." -- George Orwell
Joined: May 18, 2006 Posts: 4739 Location: Minneapolis, MN
Posted: Sun Apr 22, 2007 5:56 pm Post subject: Re: Isn't social security salvageable?
Plantagenet wrote:
The offical savings rate includes only money in savings accounts.
If you include money in things like home equity appreciation, the US has a very respectable savings rate.
Many many people sell their homes and use the money to retire to a less expensive place.
You mean to say, people will own homes outright these days? Ya right!
Yeah, the Greezer's have been able to do that (many people sell their homes and use the money to retire to a less expensive place). $15,000 for the place in 1955 & it's worth $300,000 in 2006. Now, the housing market has popped! The party is over. Prices are going down, in some places 20% all ready.
Last edited by vision-master on Sun Apr 22, 2007 6:01 pm; edited 1 time in total
Joined: Sep 25, 2004 Posts: 4675 Location: Boston, MA
Posted: Sun Apr 22, 2007 6:01 pm Post subject: Re: Isn't social security salvageable?
Plantagenet wrote:
The offical savings rate includes only money in savings accounts.
If you include money in things like home equity appreciation, the US has a very respectable savings rate.
Many many people sell their homes and use the money to retire to a less expensive place.
Well, what happens if housing prices go sideways for the next decade?
Or what happens when the boomers try to sell their McMansions by the millions and find no buyers?
The large, high end housing market has been vastly inflated thanks to a demographic abnormality.
Small single family homes are in great demand but the 4 bedroom, 3 bath $750,000 variety are not.
There simply are not enough high income young people to buy these things.
And the immigrants who are filling in the gap left by the baby bust don't have enough money to buy those massive houses. Or if they have the money, they want to buy new homes, not used ones. _________________ "www.peakoil.com is the Myspace of the Apocalypse."
Joined: May 18, 2006 Posts: 4739 Location: Minneapolis, MN
Posted: Sun Apr 22, 2007 6:05 pm Post subject: Re: Isn't social security salvageable?
I new condo complex is ready to be built by me. This last winter I seen a sign, prices starting in the $180,000's. The other day, I seen em hanging up a new and bigger sign. Prices starting in the $160,000's. They ain't going to fill the place up selling em in the $140,000's.
20 years ago, you could buy a condo around here for about $27,000. What's up with that?
Joined: Apr 09, 2007 Posts: 6276 Location: Alaska (its much bigger than Texas).
Posted: Sun Apr 22, 2007 6:16 pm Post subject: Re: Isn't social security salvageable?
All investments carry risk.
Real estate has been a good longterm investment in the U.S.
True, we've just had a real-estate bubble.
But now that the housing bubble has popped and prices are dropping is a much better time to pick up an investment property or buy a home to live in then when the prices were skyrocketing a couple of years ago.
Joined: Sep 25, 2004 Posts: 4675 Location: Boston, MA
Posted: Sun Apr 22, 2007 6:21 pm Post subject: Re: Isn't social security salvageable?
vision-master wrote:
I new condo complex is ready to be built by me. This last winter I seen a sign, prices starting in the $180,000's. The other day, I seen em hanging up a new and bigger sign. Prices starting in the $160,000's. They ain't going to fill the place up selling em in the $140,000's.
20 years ago, you could buy a condo around here for about $27,000. What's up with that?
Compound interest.
Your condo increased in price at a rate of roughly 10% per year for 20 years.
$27,000(1.10)^20=$181,642.
The closing price of the Dow Jones Industrial Average was 2,285 exactly 20 years ago. Friday the close was 12,961. That amounts to roughly a 9% compounded return on investment.
So both real estate and the DJIA were roughly equally good investments over the past 20 years.
By the way, do you remember how much you were paying for soap, newspapers, blue jeans, and car insurance in 1987? Probably a lot less.
It's all about money supply growth, my friend. _________________ "www.peakoil.com is the Myspace of the Apocalypse."
Posted: Sun Apr 22, 2007 8:11 pm Post subject: Re: Isn't social security salvageable?
Denny wrote:
What has happened? Roosevelt and Kennedy, even Johnson, was able to get people united to believe in a common cause and create an aura of optimism. Perhaps the leadership is weak and has no vision anymore, I don't know.
What happened? It was a lie from the beginning. Tax the future. Weak leadership? Sure, vision of taxing poor people? Good luck with that socialist vision of the future. Ask Mexico how that works out in a couple years when Cantrells done. _________________ -Dac
Winners never quit and quiters never win, but those that never win and never quit are idiots.
Joined: Sep 25, 2004 Posts: 4675 Location: Boston, MA
Posted: Mon Apr 23, 2007 4:14 pm Post subject: Re: Isn't social security salvageable?
Under FDR, the national debt soared from 20% of GDP to over 120%. Naturally the overwhelming majority of that was spent on The War but still, you can do great things with borrowed money.
In fact, you can set up a 25 year post war boom.
And that's exactly what they did.
Then we became a net importer of energy, then of all resources and manufactored goods, and finally of financing our debt. Our net foreign investments are actually in the red by several trillion dollars. If we weren't such incredible investors, we would actually be sending dividends overseas rather than receiving them.
We soak up 3/4 of global savings already. Who are we going to borrow new money from if we plan on increasing our deficits to fund social security. And how will the economy survive tax hikes to pay out the full benefits promised under Social Security.
Our balance sheet is bleeding red ink, how exactly are we going to provide full benefits to every senior citizen?
We aren't. We're going to cheat them out of 1% every year. No one will notice at first, but over time those 1% cuts add up.
Social Security will be cut by 20%-40% over the course of several decades by cooking the books (or what % is necessary for the program to break even). Benefits will be reduced and the program will stay solvent.
Medicare is an entirely different story. _________________ "www.peakoil.com is the Myspace of the Apocalypse."
Posted: Mon Apr 23, 2007 4:32 pm Post subject: Re: Isn't social security salvageable?
In 2001, a study by then Secretary of the Treasury, Paul O’Neill, projected future “entitlement” expenditures (Social Security, Medicare, Veterans benefits, government retirement, etc) would exceed revenues by $44 trillion dollars. It estimates that closing the gap would require the equivalent of an immediate and permanent 69 percent across-the-board income tax increase, or a 45 percent cut in Social Security and Medicare. Seventy-seven million baby-boomers are going to start retiring in 2 years' time. As they do, the number of retirees in America will double. At the same time the workforce supporting them will grow by a mere 15%. Solving this problem will hurt like hell. _________________ A Saudi saying, "My father rode a camel. I drive a car. My son flies a jet-plane. His son will ride a camel."
Live in Arizona? Check out: http://sustainablearizona.org and read my blog.
Posted: Mon Apr 23, 2007 5:44 pm Post subject: Re: Isn't social security salvageable?
vision-master wrote:
Let's say 2012, eh?
Guess that will give me 8 years collecting. Life is good, keep on worken fellows! Thanx for that Government employees pension too. Too bad for you. :smirk:
I'm getting mine NOW, before it's all gone.
Hence the reason for Aaron's Reapers to exist...you may want to change your tune!
Joined: Apr 28, 2005 Posts: 3867 Location: West shore Lake Eire, MI, USA
Posted: Mon Apr 23, 2007 6:24 pm Post subject: Re: Isn't social security salvageable?
When the bad times come to a culture, and sooner or later they always do, the
Quote:
Useless Eaters
rapidly discover that they have nothing to eat unless they learn to make themselves useful, and quickly. If times are really tough and the useful are just scraping by they stop supporting the useless. _________________ Always appeal to a man's enlightened self interest, you can trust him to look out for himself honestly, It's when you appeal to his Honor or the Common Good that he stops paying attention.
Joined: May 18, 2006 Posts: 4739 Location: Minneapolis, MN
Posted: Mon Apr 23, 2007 6:57 pm Post subject: Re: Isn't social security salvageable?
basil_hayden wrote:
vision-master wrote:
Let's say 2012, eh?
Guess that will give me 8 years collecting. Life is good, keep on worken fellows! Thanx for that Government employees pension too. Too bad for you. :smirk:
I'm getting mine NOW, before it's all gone.
Hence the reason for Aaron's Reapers to exist...you may want to change your tune!
Why? I'm already entrenched into the system. As long as the Government stay's solvent, I can't be fired & have no work commute! Besides, with the number of boomers ready to retire, if benefits were cut, the Government would have a revolution on their hands.
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