Facebook destroys Republican myth of privatizing social security panacea

Excellent clarification.

Furthermore, as you noted, it would be simple for government to set up rules regarding the investment of funds diverted from the non-existent Social Security "trust fund". I think a good starting point is, as you noted, diversification. I would also throw in funds with low management fees, say 1% or less per year, and Morningstar rated at least 4 stars.

Now regarding short-term gambling. You are spot on. It reminded me of a stock trading system advertised on an informercial. It might have been Forex, but I'm not certain. The infomercial showed someone using their software at home. And the mouse pad? One from a well-known casino (don't remember the name). I suppose I remember it because I already knew that kind of trading was gambling, and the informercial only reinforced that.

If a person wants to speculate on things, that should be done from a separate pool of funds that a person can simply afford to lose. I did that with WorldCom. I bought a small amount of shares (about $1,200 worth) thinking it would either pay off huge or I'd lose it all. I lost it all.

 

the stock market is a gamble, our social security should not be gambled by people, cause if they lose... someone has to bail them out, we gonna just through the losers in the street in old age? yeah right, we would need a new social security plan for those that gambled and lost

 

10 years?

That is very optimistic. But the birth of facebook to what it is now. Is less than a decade. In that short time it has risen to this high point. And with past bubbles of internet excitment as previously mentioned. They can just as quickly be forgotten.

A huge gamble in the cyber world of changing whims and fads when the next big thing could hit at any time.

 

Age adjusted diversified investment accounts are not a gamble and have always been successful. Speculative investments in individual stocks can be gambling but that is not what's being addressed by privatization of Social Security and would not be allowed. No one has ever lost money long term in an age-adjusted diversified investment account and no examples of this happening exist. Even those with 401K plans that took a "paper-loss" in 2008 during the height of the recession had fully recovered by the end of 2009. The only people that lost anything were those that paniced and sold their stocks. Those that hung in there because they were long term investors simply rode out the short downturn and then went back to earning profits on their accounts.

Privatization does not involve day-trading, period.

 

You are correct.

You should invest for the long term and own stocks in a highly diversified portfolio. If you do this you can double your returns over want you will receive someday in a Social Security account.

 

In a "privatized" Social Security program investment program I could see "tech stocks" as being a component but they would probably be limited to 10% or less of an investment portfolio for a young investor and probably wouldn't be included in anyone's portfolio that was over about 40 years of age due to the 'age-adjusted" criteria. If Facebook was included at all it would be because financial experts determined that it was highly promising (something that experts have not agree upon with Facebook to date) and it would be perhaps one of twenty stocks in that segment of the fund. Whether Facebook met or failed to meet the experts' predicitions wouldn't fundamentally affect the overall investment portfolio but first it would have to meet the criteria of "highly promising" based upon prior performance. Dropping from an opening of about $42 to $32 in a week doesn't reflect much promise but I would perrsonally think it will go to perhaps $52 within a couple years.... but I'm not betting any of my money on it. LOL

 

I understand your point of view, but I do not have a lot of faith in humanity these days. I do not believe there will be a lot of people that, given the CHOICE of investing their money for later or blowing it now, will choose the responsible path. If they do blow their money, they are still going to need to be taken care of later in life, thus we are back to square one. The main benefit of Social Security is the fact that you have NO CHOICE but to put money in it, it is taken from your check before you even see it.

Now, if your alternative would be made mandatory, under threat of fine or imprisonment, or to where the money is taken out before you can spend it, then I would be okay with that. I would also be okay with reforms to social security to increase the rate of investment and to weed out fraud and abuse.

But until humanity in general shows us that they are mature enough to care for themselves, I really do feel that we will either have to let them starve on the streets, or we will have to mandate 'Parents' to make some of their choices for them. I do not like it, but I just do not see any other way to do it. Any ideas?

 

Hailed? Hailed by whom? Take your strawman
argument and put it where the sun don't shine.

 

A perfectly valid point of view. Just a few questions for you. You do realize that you live in a country where basically the majority viewpoints rule, correct? And your viewpoint is not currently in the majority. Also, you point of view does not consider the people that are failing DESPITE their best efforts to improve themselves.

Back in August, I lost my job. I did not have unemployment to fall back on, so I immediately began searching for a new job. I was not picky, I put in applications to ANY type of job I could possibly walk or bus to, as I do not have a car. I must have put in dozens upon dozens of applications. I got a few interviews, but did not secure a job until October, and that job would not end up starting until January! In the mean time, I got a part time sales job just to make a little extra money to commit to the family expenses.

I had to borrow money from my sister/roommate in order for us to keep the family afloat. I kid you not when I say we were less than a month away from not having enough money between us to cover rent and utilities and being evicted when my new job began. I still owe my sister over 3,500.00, which I am paying back as quickly as I can.

Yeah, I made some mistakes. Mistakes I will not be making again. But you would doom my two nieces to starvation over a few small mistakes? That is why your views are still minority. There are few mistakes I would believe should DOOM you to a horrible fate, and losing your job for any reason is not one of them.

 

What is your argument to resist any future controls that are deemed "good for you" ?
You have just demonstrated your desire to inflict what you feel is "good for you " on others.

 

Speaking from experience in Canada, there were many problems at the time of the 2000 .com crash, due to the government's mishandling of people's pensions. There was some widowed lady for example who had let the government invest her late husband's pension (at least $80,000 from what I recall) through government-managed bonds called RRSPs, and some lazy clerk rather than developing a portfolio invested her entire pension fund instead into a single stock, that of Nortel's which bombed. The lady lost everything.

 

My pension was privatized years ago. I'm ineligible for Social Security. So, I'm just about the disaster the liberals here are talking about. I'm not rich but I'm getting by, supporting a poor family, and not whining. Having liberals lecturing me about investments is like me lecturing a gay man about how to have sex. As for Facebook, the nitwit who started this thread should be aware that Facebook didn't have any effect on me or my investment. I'm sorry. I know you love disaster stories but you'll need to find people trying to live on Social Security to get that.

When we abandoned the defined benefit pension, which was unsustainable, the people in the pipeline had the choice of going with the new system or staying with the defined benefit plan. Those within five years of retirement generally stayed with the defined benefit. Then we had classes on the basics of investments.

It looks like my 401k will last me till I die. Oh, I'm not covered by Medicare, either, and I waiting to find out if Rachel Maddow's Boy King can force me to buy insurance I can't use. And, if I die with money left, my children get it. Well, that's assuming the liberals haven't outlaw inheritance--for everyone except politicians, of course--and seizing estates. Just to be safe, I'm gifting as much as I can to my kids as we go along and if I get too old they can gift it back to me.

We did have a few liberals who figured they could live for today and let the government take care of tomorrow and they kept emptying their 401k. They were, and still are, idiots and most are now trying to live on nothing but Social Security.

 

Privatized Social Security would require mandatory deductions and contributions identical to the FICA taxes for our current Social Security welfare program of today. The individual would be given the choice of either having the money mandatorily deducted from their paycheck going towards personal investments that they could not borrow from or withdraw until they met "retirement" criteria or those same dollars going towards the current Social Security welfare program as a tax.

As a libertarian it is bothersome to me that we would mandate personal investment but as was demonstrated in the 1930's about 1/2 of the workers won't do this voluntarily and end up being a burden to society. That is actually worse today as individuals have fewer investment assets per capita today than in the 1930's.. If it's not mandated then many simply won't do it so, from a pragmatic standpoint, it has to be mandated. The difference it that today FICA taxes are just that, taxes. With privatized Social Security it is not a tax because the money does not go to the government and the individual is 100% vested in every dollar of their account.

So the choice for the individual would be "pay a tax" or "invest" but the same amount of dollars are involved and they are manditorily withdrawn from the person's paycheck.

 

That's why the US government would NOT be involved in the investments, period. These would be 401K or Roth IRA type accounts created by private investment firms that are highly diversified and age-adjusted for the individual. Competing private investment firms allow the individual to select the investment firm of their choice and then to select one of many diversified investment portfolios. The "Dot-Com" crash did not adversely effect 401K type plans because the investments in "Dot-Coms" was limited by diversificatio of the investment accounts. That's why diversification is very important and why retirement investment experts insist upon diversification.

 

The government would most certainly be involved, forcing individuals to invest and dictating the types of investments they could make.

 

EVERY academic study that looks at the investing behavior of the general public shows the vast majority of people do not invest this way. The fantasy is nice... Unfortunately we have to make public policy based on reality.

That's the problem with a lot of these bright ideas. As you accurately pointed out when it comes down to real world implementation there are a lot of glaring holes that the far right never realistically addresses.

 

What if you invested your money in 1-year treasury bills? Those have a higher average return rate than SS when compared to inflation so annual returns go up but security stays the same.

 

The problem is most people wouldn't invest their money. Anyone who works and earns a few thousand dollars a year can open an IRA and buy some no load mutual funds. There is no law against that. How many people do you know of who actually do that on an annual basis? I'll tell you. Very few.

 

If the GOVERMENT had the brains to be managing our retirement money, it would have placed EVERY DIME of SS money collected INTO AN INTERESTE BEARING, LOW RISK bank account, in each taxpayer's name, which over 30-40 years, untouched , would yield a VERY COMFORTABLE retirement for the people whose money was taken.

Nothing HIGH RISK, like much of the stock market, would be necessary to take FAR BETTER CARE of America's retiring workers.

This is ALL most conservtives have been saying for DECADES, but Leftninnies prefer to stay on the LOSING COURSE we have been on, in their typical reactionary way.

 

How about investing in oil companies as opposed to no real money being put away in the social security trust fund?

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What do you think a reasonable PE is for an "oil company?"

 

Please read the thread. There are plenty of people who claim to be conservatives that have argued quite strongly against anything like what you just suggested.

 

NO answer to my question huh?

Compared to what?


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I'm just having a friendly conversation. U mad?

Compared to anything you want. What is a reasonable PE for an "oil company?"

 

What a farkfest!!!
since Obamarama got homosituated he has done nothing but make my career job area less and less for me to work.......

Egad... that scumbag is a lowlife and scumbag worthless adventurer who has nothing in their life to self-admire than their own MIRROR slime.

Doubt he has the brain/nerve opportunity to have a coffee with me or even to say hi... contact me and I will be there...

Lets party.....