Riddle me this! What government program, mostly funded by the poor, gives more benefits the longer you live? It’s slanted towards those who have had the benefit of health care all their lives (not the poor), those people who live longer. For those who paid in all their lives and died young, without the benefit of health care, the money simply disappears into thin air and the program is useless to them. Of course, the program in question is Social Security.
Private accounts could very well be the end of poverty in America, and yet there is so much opposition from Democrats, the self-appointed protectors of the poor. What is the issue with liberals? Junk Bonds are too risky for retirement accounts. What an epiphany! This is the level of incompetence that, in part, runs our government.
The real truth about the markets is very easy to grasp, and here it is. Never, NEVER has the market been down over a life time. For the mathematically challenged, here it is again, over a span of 40, 50, 60 years – the market has never been close to where it started. That means when you leave college at 25 and retire at 65, you are guaranteed, GUARANTEED to see your portfolio to increase at least twice the level of inflation.
The #1 enemy to the liberal establishment is private accounts. Imagine how terrible it would be if a high school dropout who worked 2 or 3 jobs in his life, accumulated a good amount of wealth? While he might not be able to use it, his children or grandchildren could use to pay for a college education that otherwise would not be possible.
OK, there are some skeptics who cling to the belief that our current 10,000 level of economic growth could easily drop to the 1,000 level if it was 40 years ago. Let me calm your irrational fears, for if we were to lose 90% of our entire country, we would still have a lot more problems to worry about than not getting a retirement check. That is why they call it a post-apocalyptic world.
The truth is, Democrats need high interest rates, high unemployment and American soldiers to die in service to their country just to stay even in the polls, and in the elected offices. They absolutely cannot tolerate successful Americans. It would be the death of the model the DNC has created for itself, ‘give the man a fish for a day, so he will need you again tomorrow.’
The thing that’s rarely mentioned is that for those people who happen to hit their retirement date in the midst of a recession, their nest egg is reduced. Look at Fidelity’s funds right after 9/11 – – – the California Teacher’s Retirement Fund lost over a billion on it’s own when Enron crashed.
Who would manage the funds? That’s the big question. What kind of a contract would they be working under? How much influence would the government have in where their money was invested? When a fund the size of what these would be, decides to put a percentage of dollars in one sector of the economy, it can lead to problems most people never even think about.
My major concern right now is the accounting field, and the consolidation of accounting firms since Enron’s collapse. They’re driven by the bottom line, just like their clients are – and if there are only three out there, it’s a constant process where the bargaining for contracts involves how stringent one firm is going to be on a company’s books than their competitor.
I guess my main point is this – – – the situation with the markets and accounting aparatus in place today is weaker than it should be. The SEC has a new chief in place now who’s pro-business, so the oversite is going to be as lax as it could possibly be. Elliot Spitzer is doing their job down in NY…and one by one corporations are defaulting on their pension plans.
The idea right now should be to strengthen THIS system, and address Social Security down the road. Because while retirees are getting their government checks on time, there are plenty of folks out there who are only getting 40-60% of their retirement benefits from the private sector.
As for private accounts – – – to me it goes against the idea of Social Security, as it’s a program that’s intended to be relied on by all Americans when and if they should need it. If all the money goes into personal accounts, it defeats the purpose of why we have it in the first place.
Bush’s argument that the government would someday default on payments…that’s the one that hit me square in the forehead during his sales tour…for the President to say this is very curious. He’s basically saying that the organization he represents is not above telling every retired/disabled person in America to go pound sand…while the government spends their money on a missile defense shield.
Also – on the question of ‘who manages the funds’ – would the government allow these managers to invest in foreign markets? I’d rather that be the case, as limiting investment to domestic stocks can make the job more difficult, and can also lead to bubbles…money going where it’s not deserved.
Can our markets make good on that much more investment each pay cycle? Mutual funds have a hard enough time cutting a profit now…what happens when these mandatory investments are having to be made by fund managers – and the number of viable investments dry up?
Right now the vulture investing funds are doing the best – example of this was the investor who put money into Adelphia when it was trading at just over a dime a share, as it went over two bucks a little while ago – a private firm can invest in this way, but if an investor in a Social Security program sees Adelphia on the list of investments – does it become a political issue then?
All these things run through my mind, and the President hasn’t gotten that deep into HOW the money would be invested, and what controls would be in place or what restrictions would be put on the fund managers.
Look at Fidelity’s funds right after 9/11 – – – the California Teacher’s Retirement Fund lost over a billion on it’s own when Enron crashed.
Fidelity has recovered as well as the Teachers fund but Enron isn’t close to the invetments that would be allowed under private accounts.
We would start with the funds that the government is using right now to hold SS surpluses and then have a cap on the investment grade level of the fund choices.
As for private accounts – – – to me it goes against the idea of Social Security, as it’s a program that’s intended to be relied on by all Americans when and if they should need it.
Social Security isn’t going to be there when I need it, Clinton was the first, I think, to talk about this. It’s a huge unnecessary burden on the economy and tax base.
but if an investor in a Social Security program sees Adelphia on the list of investments – does it become a political issue then?
Only approved mutual funds would be allowed on the list. No day trading, no IPOs, no single companies or single industries. A well diversified portfolio with various levels of short term risk and locked in long term gains.
put on the fund managers
They would be heavily restricted if they existed at all.