2012 Elections

[LongLiveYorke 38]

This from the same people who are going to bring us health care...we really are ****ed.

Who's bringing us health care...?

[hblask 1]

I'm glad someone addressed that. I just couldn't decide how to address something so completely wrong. It really doesn't meet any of the qualifications. It does what it is 'advertised' as doing, which makes either #1 or #2 false, depending on your interpretation. It currently does meet #3, but that is not how it is intended - contrary to ponzi schemes, which are intended to work that way. #3 can only be true if #1 and #2 are both true.#4 is just silly to apply to SS. People don't pay into SS in hopes of gaining returns that are larger than they should reasonably expect. For people who were putting money in that the right time, that's what they got...but that wasn't their intention.

All right, let's go over them again:1. Sold as an 'investment'2. No actual investing taking place3. Current returns paid for by new investors4. Promises of impossible rates of returnOK, so 1 is questionable. I bet if you polled Americans, the majority would say that SS is a retirement program rather than a disability insurance program. It has been sold as a retirement program for my entire lifetime, and I'm older than the hills.Number 2 is clearly true. The money has all been spent and claimed, sometimes multiple times.Number 3 is true, whether one and two are true or not, I'm not sure how you can say otherwise. Clearly the people are not getting their own money back.Number 4 is true: SS is not sustainable in it's current form. People are being promised specific amounts of money based on how much they are putting in. Those amounts are not real. People will either get less or pay more. There is no way around that.So the only one in question is 1, but go ask 10 random people on the street whether SS is a retirement program. Go ahead, I'll wait.

[JubilantLankyLad 1,957]

Who's bringing us health care...?

The BGnautilus party.

[hblask 1]

I should add on the "SS is insurance" thing, another factor that you need to look at is the value of each of the components.If you started at age 20 and bought disability and whatever other kinds of insurance you guys are claiming SS is, versus the value of it that is the equivalent of putting money aside and getting it back later.If I give you a dollar with the intent that you will give it back when I am 65, that is not insurance. That is a retirement program.If I give you a dollar with the intent that you will give it back if I die or my spouse dies, that is insurance.So, for each dollar put into SS, how much falls into each category?My guess: 98 cents to retirement savings, 2 cents for insurance.If you doubt it, look how much comes out of your check for SS, and then go price insurance that you would start purchasing at age 21 and will definitely keep buying until 65 and only pays out for unexpected events.

[Balloon guy 158]

The BGnautilus party.

Cigars filled with weed for prescription only sicknesses?

[JubilantLankyLad 1,957]

Cigars filled with weed for prescription only sicknesses?

I'm instantly convinced I would vote for you.

[Balloon guy 158]

I'm instantly convinced I would vote for you.

Tax free too.And speed limits will be raised 10 mph everywhere except school zones, 15MPH is reasonable around children being forced into interment camps to be pumped liberal indoctrination.

[mrdannyg 274]

All right, let's go over them again:1. Sold as an 'investment'2. No actual investing taking place3. Current returns paid for by new investors4. Promises of impossible rates of returnOK, so 1 is questionable. I bet if you polled Americans, the majority would say that SS is a retirement program rather than a disability insurance program. It has been sold as a retirement program for my entire lifetime, and I'm older than the hills.Number 2 is clearly true. The money has all been spent and claimed, sometimes multiple times.Number 3 is true, whether one and two are true or not, I'm not sure how you can say otherwise. Clearly the people are not getting their own money back.Number 4 is true: SS is not sustainable in it's current form. People are being promised specific amounts of money based on how much they are putting in. Those amounts are not real. People will either get less or pay more. There is no way around that.So the only one in question is 1, but go ask 10 random people on the street whether SS is a retirement program. Go ahead, I'll wait.

Those are just real leaps in your definitions. The ones provided by myself and VB are much more consistent with the actual definition of the words, how the program is advertised, and how it is used.Investopedia's definition of investment:"An asset or item that is purchased with the hope that it will generate income or appreciate in the future. In an economic sense, an investment is the purchase of goods that are not consumed today but are used in the future to create wealth. In finance, an investment is a monetary asset purchased with the idea that the asset will provide income in the future or appreciate and be sold at a higher price. "SS doesn't even come close.

[vbnautilus 48]

All right, let's go over them again:1. Sold as an 'investment'2. No actual investing taking place3. Current returns paid for by new investors4. Promises of impossible rates of returnOK, so 1 is questionable. I bet if you polled Americans, the majority would say that SS is a retirement program rather than a disability insurance program. It has been sold as a retirement program for my entire lifetime, and I'm older than the hills.Number 2 is clearly true. The money has all been spent and claimed, sometimes multiple times.Number 3 is true, whether one and two are true or not, I'm not sure how you can say otherwise. Clearly the people are not getting their own money back.Number 4 is true: SS is not sustainable in it's current form. People are being promised specific amounts of money based on how much they are putting in. Those amounts are not real. People will either get less or pay more. There is no way around that.So the only one in question is 1, but go ask 10 random people on the street whether SS is a retirement program. Go ahead, I'll wait.

I'm not conceding that these 4 comprise a complete definition of Ponzi, but #2 is questionable, and has to do with stuff I don't understand about the SS trust fund buying treasury bonds. Seems like a gray enough area that I'm willing to concede this one.#4 is NOT true, mostly because "its current form" is adjustable. Social security funds can always be increased by increasing taxes on new investors, and payouts can be adjusted.I would also add #5: Non-transparency. In a Ponzi scheme no one knows what is going to happen with their money, which is really why it is illegal. This doesn't apply to SS.

[Balloon guy 158]

Looks like the liberal media is so bored trying to defend anything Obama does that they went ahead and wrote the story for after the Republican nominee is chosen, This leaked out;

The presidency of George W. Bush was an awful time for this country, and we can all be thankful that time is over now that we have President Obama. Bush was horrible to this country, getting us into unnecessary wars which, along with his tax cuts for the rich, drove us deep into debt. He left a giant mess for Obama to inherit, and people often thought he was the worst president imaginable. That was until the Republicans nominated [Republican nominee], who is easily ten times worse than Bush.The Republicans could have nominated someone moderate and reasonable like [Republican primary candidate who lost], but instead they’ve decided to try and push this country in a radical direction with the extreme right-wing [Republican nominee]. He/she is nothing but a retread of the failed policies of the past and makes even George W. Bush look moderate in comparison. Plus, he/she simply lacks the intelligence and demeanor that President Obama has. If we want to continue to move forward, it’s imperative we stop [Republican nominee].Just look at his/her extreme view [Republican nominee view 1]. This is radically out of the mainstream and completely out of touch with the needs of the American people. In fact, it could easily create great harm to [vulnerable group who tends to vote]. At least Bush had the pretense of compassionate conservatism, but [Republican nominee view 1] shows that [Republican nominee] is completely uncaring. And as many people have said, [talking point on Republican nominee view 1].And then there’s [Republican nominee]‘s opinion [Republican nominee view 2]. It’s almost hard to believe. He/she is basically proposing to set the rights of [protected group] back one hundred years. How can someone in this day and age actually argue [Republican nominee view 2]? This is once again thinking that is stuck in the past and won’t continue to move the country forward like President Obama has done. Plus it’s well known that [talking point on Republican nominee view 2].As for the economy, what has [Republican nominee] proposed? [Republican nominee proposal for the economy]. You have to be kidding me. It’s a lopsided tax cut for the rich at the expense of the poor and the elderly. Obviously, [Republican nominee] is beholden to the unreasonable, extreme views of the Tea Party. His/her ideas are nothing like the balanced approach Obama has proposed with [Obama economic proposal, if available]. Only that approach will continue the progress Obama has already made.

[hblask 1]

Those are just real leaps in your definitions. The ones provided by myself and VB are much more consistent with the actual definition of the words, how the program is advertised, and how it is used.Investopedia's definition of investment:"An asset or item that is purchased with the hope that it will generate income or appreciate in the future. In an economic sense, an investment is the purchase of goods that are not consumed today but are used in the future to create wealth. In finance, an investment is a monetary asset purchased with the idea that the asset will provide income in the future or appreciate and be sold at a higher price. "SS doesn't even come close.

Bolded is the exact point of SS. So your refutation of my point is to agree with me?

[hblask 1]

I'm not conceding that these 4 comprise a complete definition of Ponzi, but #2 is questionable, and has to do with stuff I don't understand about the SS trust fund buying treasury bonds. Seems like a gray enough area that I'm willing to concede this one.

It's not questionable. There are no assets, just a promise to tax in the future. Every few years the trustees report admits this.

#4 is NOT true, mostly because "its current form" is adjustable. Social security funds can always be increased by increasing taxes on new investors, and payouts can be adjusted.

Uh, that would make current returns unsustainable, right?

I would also add #5: Non-transparency. In a Ponzi scheme no one knows what is going to happen with their money, which is really why it is illegal. This doesn't apply to SS.

Well, considering SS money was supposed to be placed in a trust fund and wasn't, do you really want to add this to the list? If you want, I'll use it from now on as #5, and thank you for strengthening my point.

[BaseJester 1]

I would also add #5: Non-transparency. In a Ponzi scheme no one knows what is going to happen with their money, which is really why it is illegal. This doesn't apply to SS.

Is this not a Ponzi scheme?

$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$Here are instructions on how to make $10,000 US cash in the next 2 weeks:$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$If you don't try it - you will never know.There are 3 addresses listed below.Send the person at the top of the list a $5 bill wrapped in 2 pieces of paper (to securely hide it), along with a note that says:"Please add me to your mailing list".Then delete that name, move the other 2 up and put your name at the bottom.Now start sending this ENTIRE e-mail back out to people. When 20 people receive it, those 20 people will move your name up to the middle position and they will each send out 20. That totals 400 people that will receive this letter with your name in the middle.Then, those 400 people will move your name up to the top and they will each send out 20 E-mails. That totals 8,000 people that will receive this E-mail with your name at the top and they will each send you a $5 bill.8,000 people each sending you a $5 bill = $40,000 cash. That's if everyone responds to this E-mail, but not everyone will, so you can expect more realistically to receive about $10,000 cash $5 bills in your mailbox.This will work for anyone, anywhere in the world in any country, but send only a US CASH $5 bill.The more E-mails you send out, the more cash you will receive. If each person sends out 100 E-mails, there will be 1,000,000 people that receive this letter when your name reaches the top. If only 1% of those people respond, you will still get $50,000 cash.

[vbnautilus 48]

Is this not a Ponzi scheme?

Nope. It's a pyramid scheme.

[BaseJester 1]

Nope. It's a pyramid scheme.

So Perry should correct himself and say Social Security is a pyramid scheme, because everyone knows that social security is not an investment.

[FCP Bob 1,312]

Economist Article On Social SecurityPretty good article on Social Security from The Economist. Read the comments from readers as well as the article and contrast the quality of them with what you might see on Yahoo.

SOCIAL SECURITY manages to be one of the most popular and misunderstood government programmes. It serves two purposes: to provide an income floor which keeps people out of poverty in retirement (a form of insurance), and to replace income from previous work (a forced saving scheme). There may be more efficient ways to achieve these goals, but generally, Social Security does a decent job at both. But there is a stunning amount of ignorance when it comes to its financing. On the right, people like Rick Perry call it a Ponzi scheme based on lies. The left prefers to believe there's nothing wrong with the programme and figures when revenues and the trust fund can no longer cover benefit payments some simple accounting trick will save the day. Both views are wrong and dangerous. Discontinuing the programme and moving to something fully funded would be so expensive as to not be worth the cost. Social Security’s financing problems can be fixed, ideally with some combination of tax increases and progressive benefit cuts. It is a fairly easy fix and the sooner it is done the cheaper it will be. Punting it to the future makes it even more expensive to future generations, and is in my opinion irresponsible, to put it nicely.ARTICLE CONTINUED AT LINK ABOVE

[BaseJester 1]

They aren't just nonsense comments. They're nonsense comments with correct spelling.

However, given 15% poverty rates in the US, and the fact that the US is generally a consumer society, chances are strong that a large percentage of the population would spend the money instead, and not invest it, over time, in said fund.

Here we're going to ignore the economic effects of a person just outright spending his wages himself.

This in turn would increase the likelihood that a large percentage of Americans would live in poverty once they were no longer working, which in turn would hurt aggregate demand by not placing a spending floor on retirees (which I argued in an earlier comment to an earlier post).

Here we're going to extoll the virtues to the overall economy of spending those wages, but only after they have been processed through social security.

[hblask 1]

Social Security’s financing problems can be fixed, ideally with some combination of tax increases and progressive benefit cuts.

I'm at the point where I support this, because it would make the fraud so obvious that even the drooling masses who think government has a magic wand that grants wishes for free would see what a scam SS is. Current "returns" are just barely above zero, if you start raising taxes and cutting benefits, that mass of people who think SS defies the laws of economics and arithmetic will no longer be able delude themselves. When people start finding out they'd be better burying their money in their back yard, SS will collapse and real reform will take place.It's just sad that there are so many stupid people that it has to come to that when there are dozens of affordable solutions being offered up.

[Balloon guy 158]

Finally a way to ACTUALLY fix SS

[mrdannyg 274]

Bolded is the exact point of SS. So your refutation of my point is to agree with me?

Not quite, but I didn't read it carefully and will admit it doesn't contradict your points nearly as well as I thought, on second reading.

I'm at the point where I support this, because it would make the fraud so obvious that even the drooling masses who think government has a magic wand that grants wishes for free would see what a scam SS is. Current "returns" are just barely above zero, if you start raising taxes and cutting benefits, that mass of people who think SS defies the laws of economics and arithmetic will no longer be able delude themselves. When people start finding out they'd be better burying their money in their back yard, SS will collapse and real reform will take place.It's just sad that there are so many stupid people that it has to come to that when there are dozens of affordable solutions being offered up.

I don't think most people disagree that burying the money in their back yard would be better than SS. Or at least, better than SS in a low-inflation environment, like the one we've had for quite a while, and can reasonably expect going forward. The question of course is - what about those people who wouldn't bury their money? Or who don't have money to bury? Or, ummm, get disabled without enough buried?For people who are employed regularly for most of their lives, and are able to retire on schedule, SS functions as a tax, masquerading as an inefficiently inexpensive insurance plan, combined with a forced investment at woefully terrible rates.

[vbnautilus 48]

So Perry should correct himself and say Social Security is a pyramid scheme, because everyone knows that social security is not an investment.

No, SS is not a pyramid scheme either. In a pyramid scheme, like the one you described, each person makes money by recruiting others into the deal, below them. That's clearly not how social security works.

[LongLiveYorke 38]

The real defining characteristic of a Ponzi scheme is the un sustainability of it, that it requires more and more people to invest constantly in order to support returns. It's a non-equilibrium system. SS, on the other hand, could be sustained in a model where population distributions and levels remained constant. In other words, for any fixed retirement age, distribution of SS payments, age of death, etc, benefits and tax rates could be adjusted to sustain a stationary state. It doesn't depend on changes in population distributions, though those will effect benefit rates, etc.

[BaseJester 1]

The real defining characteristic of a Ponzi scheme is the un sustainability of it, that it requires more and more people to invest constantly in order to support returns. It's a non-equilibrium system.

Right. Social Security is precisely like that.

SS, on the other hand, could be sustained in a model where population distributions and levels remained constant. In other words, for any fixed retirement age, distribution of SS payments, age of death, etc, benefits and tax rates could be adjusted to sustain a stationary state. It doesn't depend on changes in population distributions, though those will effect benefit rates, etc.

Yes, a hypothetical retirement program could be funded. If we change that which is currently Social Security into this hypothetical sustainable program, then it would, hypothetically, not be a pyramid or ponzi scheme.

[SilentSnow 1]

Not quite, but I didn't read it carefully and will admit it doesn't contradict your points nearly as well as I thought, on second reading.I don't think most people disagree that burying the money in their back yard would be better than SS. Or at least, better than SS in a low-inflation environment, like the one we've had for quite a while, and can reasonably expect going forward. The question of course is - what about those people who wouldn't bury their money? Or who don't have money to bury? Or, ummm, get disabled without enough buried?For people who are employed regularly for most of their lives, and are able to retire on schedule, SS functions as a tax, masquerading as an inefficiently inexpensive insurance plan, combined with a forced investment at woefully terrible rates.

You guys should have read the link I already posted. SS has had great rates of return for a low risk investment. http://www.cato.org/pubs/journal/cj14n1-4.html"A comparison of the pre-tax rates of return from the social security system (Tables 2, 3, and 4) with the average rates of return for alternative investments for the time period 1945-89 in Table 1 shows that the social security returns are very favorable. The returns for those retiring presently or in the near future are impressive. For 65-year-old couples (Table 2), the rates of return from the social security system range from 8.14 percent for 50/50 income split couples with 1990 incomes of $100,000 to 11.24 percent for one-earner couples with incomes of $10,000. These rates exceed those of all investments for the 1945-89 time period except the most risky, common stock, which had a rate of return of 13.57 percent. "People love to talk about the the stock market as if the annualized average over 100 years can be reliably counted on. First of all, the average person only has about a 30-40 year investment window. The stock market must perform over that time. Over the last 15 years the stock market return has been roughly zero- worse if you were unlucky. Does anyone want to guarantee that the next 15 years will make up for this huge loss of wealth? If the economy over the next few decades does poorly(and all signs seem to indicate that it will), stocks will be more negatively affected than low risk investments. Right now pretty much the only thing propping American stocks up is globalization. But if other countries start to develop their own companies rather than use American ones, that trend could stop. Also, it is quite possible that today's stocks are fundamentally overvalued. The only thing that makes stocks worth anything at all is dividends. Price/Dividend ratios are currently much higher than the historical average. Of course if a stock grows, dividends might be higher in the future. But in practice those dividends never get paid out. The current idea that dividends don't matter is simply a more complicated version of the "greater fool theory". Imagine that you couldn't sell your stock to some idiot down the road, but actually had to price it based on its true value- it is likely that stocks would drastically decline in this scenario, since most companies routinely try to cheat the payouts that give value to a stock. If someone wants to risk all of their extra retirement money gambling on stocks, then let them. But it is reasonable that they should be required to save/invest a minimum amount of money in low risk investments.

[hblask 1]

I don't think most people disagree that burying the money in their back yard would be better than SS. Or at least, better than SS in a low-inflation environment, like the one we've had for quite a while, and can reasonably expect going forward. The question of course is - what about those people who wouldn't bury their money? Or who don't have money to bury? Or, ummm, get disabled without enough buried?For people who are employed regularly for most of their lives, and are able to retire on schedule, SS functions as a tax, masquerading as an inefficiently inexpensive insurance plan, combined with a forced investment at woefully terrible rates.

All replacements for SS that have been proposed include the following:1. A grace period so that all those people who paid in all their life don't get screwed.2. A guaranteed minimum income at retirement3. Disability insurance -- details vary by plan4. Mandatory self-directed and personally owned investments accounts (in qualifying accounts, similar to mixed mutual fund/bond funds depending on age.Such a plan would meet all your objections, plus give the 99% that doesn't get injured a far, far better retirement than even the most optimistic Soc. Security scenario.