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Privatized Social Security

Bullseye said:
I believe cruisers afford their tickets because of a lifetime of investing and saving; I DON'T believe most cruiser are trust fund babies.
You're twisted around. I believe the cruisers have acquired the wealth over a lifetime of savings and investments. Understand that not every passenger is a retiree; I've seen families, newlyweds, etc. My comment was directed to the retiree/old cruisers.
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Bullseye, the word “Many is not synonymous with the word “majority”. I did not write, “most cruisers are trust fund babies”.

Yes, were both discussing the same segment of the ships’ passenger populations; we’re discussing retired persons and/or those that are or were married to them.
Respectfully, Supposn
 
Aberration said:
If you say so.
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Post #268

Aberration said:
All I have argued is SS is a horrible program that is unable to provide a minimum standard of living and yet is unable to be solvent.
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SS is like any other government program. Fica taxes collected in 2020 pay for SS benefits paid out in 2020. But unlike a privatized, stock-based system, the government is able to "keep" surplus taxes or create dollars to make up for a tax shortfall. They could simply choose to pay higher benefits by running larger deficits, but they choose not to do so.

Aberration said:
Contrasted to private retirement funds that do not have such problems.
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Private retirement funds go kaput all the time. Even state and local govt. retirement funds have troubles, and it's all because they are unable to pay out more than they put in. If the payouts promised were larger than the current contributions, they lose money. This is the point that nobody on your side seems to understand - money doesn't appear just because transactions happen, or stock prices appreciate.

Aberration said:
I have yet to see an issue with production. Why does it concern you?
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I'm less concerned with our economy's ability to increase production than I am with the dollar in/dollar out problem. But projecting the average retiree to be a millionaire - even living without touching his principal - assumes a huge jump in consumption and production.

Almost everything we consume in 2020 has to be produced in 2020. If we have a population of 1000, and 800 of the people are productive workers, then each worker has to produce enough for 1.25 people. If only 500 are productive workers, then each worker has to produce enough for 2 people. (And this is if everybody is paid the same amount.) What you are doing when you make retirees - a large percentage of the population - rich, is you are putting a far larger production burden on a smaller and smaller workforce. Pay hasn't kept up with productivity for the past 40 years; workers are already earning peanuts, relative to what they were getting when the economy was good. If you are of retirement age (I assume so, since you go on cruises), you were in that golden era, where one income could buy a house, a car, and raise a family. You had savings that you were able to invest. That's not true anymore, because labor is getting a much smaller slice of the income pie.

Aberration said:
What real world details were glossed over? The ones you raised? Because they weren’t glossed over.
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They weren't answered, either. Most importantly - if retirees are going to withdraw significantly more dollars than workers are contributing to the stock market, where are those other dollars coming from? And if you can find a source, why would you expect them to be there over the long run?

Aberration said:
1.4M is at the very low end of my projections to retire on. I’ll have no problem hitting that target.
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Yeah, because you are one of relatively few people who have a retirement account full of stocks. Where is that money coming from, when you cash out? Answering that in detail might help you answer the previous question.
 
Aberration said:
What RW BS? That’s from the Social Security administration. Once the fund is depleted and it hits the deficit and then the debt... it’s over.
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Aberration said:
You can’t see better returns when there is no investment.

There are already protection to prevent such losses. No point it beating a dead horse because you refuse to acknowledge the protections.

Being compelled to contribute to an inadequate system is messing up retirement. Or feel free to show me the standard of living with just social security income.

Why would I have a come back for Bush? It is bam easy done. And it is the public education system. That’s why you can’t bring any factual argument, it’s just “nuh uh SS works you’re wrong”.

My claims may be made up, but they should be easier for you to argue then. [emoji2369]
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Line chart linked to data in table format.
SOURCE: Author's calculations based on SSA (2013, Table 4.A1) and Board of Trustees (2014).
https://www.ssa.gov/policy/docs/ssb/v75n1/v75n1p1-chart01.gif
v75n1p1-chart01.jpg

It earns interest until about 2032/33. So FICA taxes are invested.

Social Security Trust Fund Cash Flows and Reserves
 
Just came across this article today...

Aged pension more effective in retirement than ‘failed’ super

“Scrapping the super system would massively improve Australia’s economic performance – it’s costly and inefficient, unnecessary, and incredibly unfair,” he said.

The analysis, titled Scrap Superannuation, estimated compulsory super removed the equivalent of 2 per cent of GDP in buying power — around $40bn per annum — from the economy with little offsetting benefit in reduced age pension dependence.

“Instead of channelling incomes through asset markets, decreasing demand and soaking up a workforce the size of the military on an accounting exercise, the 28 million superannuation account holders could spend up to an additional $20,000 per year,” Dr Murray said.
.....
“Super does not fulfil the requirement of a retirement income system; it’s better thought of as a growth-sapping, resource-wasting, tax-advantaged asset purchase scheme for high income earners, that may ultimately have little effect on reducing reliance on the age pension system,” Dr Murray said.
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JohnfrmClevelan said:
Yeah, because you are one of relatively few people who have a retirement account full of stocks. Where is that money coming from, when you cash out? Answering that in detail might help you answer the previous question.
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it coming from appreciated stock values caused by inflation and increased productivity/profits/wealth generation. Any more questions?
 
James972 said:
it coming from appreciated stock values caused by inflation and increased productivity/profits/wealth generation. Any more questions?
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You didn't say where the dollars came from.

Don't jump into a conversation without reading the whole thread.
 
James972 said:
I already told you, it comes from inflation and increased profits/ wealth productivity!
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Inflation doesn't increase the number of dollars in existence. Nor does productivity.

Two things increase the number of dollars in existence: bank loans and federal deficit spending, and federal deficit spending only increases the number of dollars when the Fed buys bonds.

The dollars one receives when cashing out of the stock market come exclusively from people buying those stocks. Dollars in must equal dollars out. So if you are going to claim that increased profits are paying for people cashing out of stock purchases that have significantly appreciated, you have to connect those increased profits to people buying into the stock market. If you are going to claim that retirees will be able to withdraw lots more dollars than they put in, then you must demonstrate how and why more dollars are entering the stock market.
 
JohnfrmClevelan said:
Inflation doesn't increase the number of dollars in existence. Nor does productivity.
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The fed increases dollars to keep prices stable as population and GDP/productivity/wealth grow.
 
JohnfrmClevelan said:
Two things increase the number of dollars in existence: bank loans and federal deficit spending,.
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if true banks would create billions, make billion in profits for themselves and wildly inflate the currency . In truth, the Fed determines how much the banks can loan in order to keep prices steady which in turn maximizes economic growth. 1+1=2
 
JohnfrmClevelan said:
Two things increase the number of dollars in existence: bank loans and federal deficit spending,.
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if true banks would create billions, make billion in profits for themselves and wildly inflate the currency . In truth, the Fed determines how much the banks can loan in order to keep prices steady which in turn maximizes economic growth. 1+1=2
 
JohnfrmClevelan said:
. So if you are going to claim that increased profits are paying for people cashing out of stock purchases that have significantly appreciated, you have to connect those increased profits to people buying into the stock market.
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easy of course. thanks to inflation and productivity people have more money with which to buy stocks.
 
JohnfrmClevelan said:
If you are going to claim that retirees will be able to withdraw lots more dollars than they put in, then you must demonstrate how and why more dollars are entering the stock market.
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they enter market as fed creates more dollars to keep prices stable as population and productivity grow.
 
James972 said:
The fed increases dollars to keep prices stable as population and GDP/productivity/wealth grow.
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The Fed doesn't add net assets (dollars + bonds) to the economy. They only adjust the makeup of government liabilities in the private sector.

James972 said:
if true banks would create billions, make billion in profits for themselves and wildly inflate the currency . In truth, the Fed determines how much the banks can loan in order to keep prices steady which in turn maximizes economic growth. 1+1=2
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That's not how it works. Banks create money when they create loans; they "buy" promissory notes with new account balances, which increases M1 (it also increases private sector debt). But this transaction does not make banks richer - their increased assets (the promissory notes) are balanced by their increased liabilities (the new account balances).

James972 said:
easy of course. thanks to inflation and productivity people have more money with which to buy stocks.
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Wrong. Like I said before, neither inflation nor productivity gains have any effect on the money supply. And even if they did (they don't), you still haven't made the connection between a higher money supply and money in the pockets of people buying into the stock market.

James972 said:
they enter market as fed creates more dollars to keep prices stable as population and productivity grow.
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Nope. That's not how dollars enter the economy at all.

Your problem (one of many) is that you don't understand how money is created, and how it moves around within the economy. Like a lot of people who don't bother to learn these things, you just assume that the dollars "appear" when there is a transaction to be made, which is simply not true.
 
JohnfrmClevelan said:
The Fed doesn't add net assets (dollars + bonds) to the economy. They only adjust the makeup of government liabilities in the private sector.

.
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and???????????????????????
 
JohnfrmClevelan said:
neither inflation nor productivity gains have any effect on the money supply. .
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1) inflation is usually the increase in money supply

2) if productivity gains like 100 million cars up from 1 million cars had no affect on money supply then we'd have constant deflation. Welcome to Econ 101!!
 
James972 said:
and???????????????????????
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...and the question was, "where do the dollars come from when one cashes out of the stock market?" The answer is not "from the Fed."

James972 said:
so????????? our subject is how much they create. Why dodge the issue?????????????
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No, our subject is, where do the dollars come from when one cashes out of the stock market. Specifically, where do the projected gains come from? Your thinking is so scrambled that you can't even keep the subject in sight.

James972 said:
1) inflation is usually the increase in money supply
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No, it isn't.

James972 said:
2) if productivity gains like 100 million cars up from 1 million cars had no affect on money supply then we'd have constant deflation. Welcome to Econ 101!!
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An Econ 101 student would understand, by now, where money comes from. Heck, I even explained it for you a few posts ago, and you still can't seem to incorporate it into an answer.

Productivity can increase, of course. But monetizing that increase is another subject altogether. Money doesn't just "happen" because you are doing business.

Despite years of debating here, you still haven't absorbed anything useful. Your arguments are the same old incoherent ramblings that you started with when you got here.
 
JohnfrmClevelan said:
Despite years of debating here, you still haven't absorbed anything useful. Your arguments are the same old incoherent ramblings that you started with when you got here.
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James972 behaves more often than not exactly as danielpalos does, except that one uses conservative buzzwords while the other seems to prefers to borrow the lexicon of the radical left. Although I must admit that I often reply to these two people myself, experience has taught me that it is largely a waste of time. Hell, sometimes even when you make a claim that supports their point of view, they slide right back into nonsense.

Fortunately, Debatpolitics is not populated only by partisan trolls.


As for issues involving monetary aggregates, it depends on how complicated you are willing to make the models. A sensible discussion of the issue within the framework of mainstream macroeconomics would require models that are far more complicated than what you're likely to find in an ECON101 course. It's especially true with the type of commentary I have known you to make: it wouldn't be exactly right to "dump" a process creating money out of nowhere. It has to arise endogeneously, from choices made by firms, households and firms in the financial sectors. The central bank can increase the amount of a specific type of money-like asset for a subset of financial firms that have accounts at the central bank, but what those institutions do in response seem like something which matters.

It's not the type of problem I have studied. I have seen some very simple models trying to make sense of monetary aggregates and price formation, but nothing anywhere as sophisticated as I suspect we would need to get to dig into those discussions. As I have done a lot more than just take ECON101, it should be obvious that it's not exactly an ECON101 issue. Of course, if you're just talking about fractional reserves and these types of things, it's not exactly like studying quantum elctrodynamics. It going to get messy if you want to think about high dimensional problems involving this, business cycles and many relevant macroeconomic variables.
 
Aberration said:
What RW BS? That’s from the Social Security administration. Once the fund is depleted and it hits the deficit and then the debt... it’s over.
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Aberration said:
“Invested”. With a calculated return of 1.2%. Standard treasuries get higher. That is the very argument I made.
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I saw the argument you made is SS will be over.

I posted a link that shows no such thing.
Sure the return is low, I have never said any thing to the contrary. Ever.

It's also the most stable. As long as the USA has a gov't.
 
James972 said:
SS takes 15% of your lifetime income and gives you back dog food money is you live to collect a penny. In private accounts an average American would retire with estate of 1.4 million. Capitalism made us all rich and then liberals wasted all our money.
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Private retirement accounts are common place. Very few wind up worth over a million dollars. Capitalism makes some people rich and some people homeless and broke. It pretty much depends on an accident of birth. Prior to SS more than half the people over 65 were living in poor houses along with the mentally ill and disabled.
 
dairyair said:
I saw the argument you made is SS will be over.

I posted a link that shows no such thing.
Sure the return is low, I have never said any thing to the contrary. Ever.

It's also the most stable. As long as the USA has a gov't.
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It is, but not the only one.

Your link shows that? Where? Quote it.

So are all the other Treasuries. [emoji849]
 
manofknowledge said:
Private retirement accounts are common place. Very few wind up worth over a million dollars. Capitalism makes some people rich and some people homeless and broke. It pretty much depends on an accident of birth. Prior to SS more than half the people over 65 were living in poor houses along with the mentally ill and disabled.
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Very few are worth over a million because very few have more than 5K in them. What the average person walks away with, regardless of what they put in, is is not a metric of performance for the market.

Capitalism didn’t do that. No matter how many times your ignorantly say so.
 
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