Get rid of social security?

Imagine if you invested it in some of the many business that have gone broke since the 2008 downfall. You'd be posting from the Public Library. A temporary relief from your homelessness.

 

Nonsense! ANYTHING can happen to invested money. It is ALWAYS a risk, and no senior retirement money should be risked. Not ever.

 

YOU DON'T KNOW that "elimination of poverty through personal investment actually costs about 1/2 as much as mitigating poverty through welfare". Investment is a risk that doesn't have a sure outcome, especially with the way things have been going in the US economy in recent years, (if you can even still call it an "economy").

 

Privatisation. You've been repeatedly told about the evidence and you've repeatedly ignored it. We're summarise it again: due to ideological splurge you wish to coerce a result that eliminates a pareto improving result. Again you only show that right wing libertarianism doesn't know its economics!

And please don't mention poverty. You've already been found guilty of ignoring accepted definition and also peddling a non-supportable conclusion over the impact of privatisation. This again only reflects a dogma that ignores economic rationality

 

Several keep referring to the "risk" involved in personal investments but as has been repeatedly noted those risks can be completely mitigated for by diversification and age-adjustments in an investment portfolio. The greater the diversification the less risk is involved with the investment account. This is a mathmatically reality. If I have stock in one company and it fails completely then I lose 100% of my investment capital. If I have stock in 1000 companies and one company fails completely I lose 0.1% of my investment capital. It's very simple math.

At the same time there would be highly knowledgeable experts selecting those companies that would be included in a diversified account and they would seek to eliminate any potential "losers" and would select those companies with the most promise of growth and stability. I believe I used the example before of an S&P 500 mutual fund. It wouldn't include all 500 companies but probably about 100 of the top companies. If the overall S&P 500 averaged 5% ROI then the top 100 companies in the S&P 500 probably exceeded 10%. Experts in investiong would be extremely beneficial just like the same experts are today related to 401K and Roth IRA investment plans. Roth IRA's and 401K always do better than average individual investment results.

Age-adjusting is also critical. No, a person approaching retirement age would not have an significant investment in stocks. They would be highly invested in government bonds though as well as precious metals which are both a hedge against stock market fluxuations. Those near or in retirement that had age-adjusted investments profited from the 2008 recession. I personally know a retiree that double an $800K investment into $1.6 million because of the 2008 recession because they had "age-adjusted" their investment portfolio years ago. People warn that those nearing retirement would have been "wiped out" by the 2008 recession but if they had age adjusted investment accounts they reaped huge profits instead. People don't like to acknowledge that fact.

The fact remains undisputable that highly diversified and age-adjusted investment account NEVER fail over the working career of an individual. Not a single example, real or imagined, has been presented that would contradict that. I've repeatedly asked for an example but when we consider that the Stock Market Crash of 1929 didn't even create a problem then what financial disaster would?

 

This is just repetition of your error. The evidence shows that risk, through wage shocks, leads to the pareto improving result of SS. That is reality. You've replied with fluff to ignore that reality, peddling that ideological-driven urge to coerce an irrational result

 

We would could be lowering our tax burden, by solving official poverty in our republic in a market friendly manner which better ensures the general prosperity and general welfare by increasing the circulation of money in our institutional system of money and market based systems and political economy.

 

Random words bung together to come out with a nonsensical comment

 

What part of my assertion is too difficult to understand? I would be happy to use simple American English whenever possible.

 

I know exactly what you said: it was bunkum

 

Ridiculous. Get rid of everything but the retirement system. Thirty-one year old lazy asses with "bad backs" have no business collecting social security. It WAS a self-funded retirement program until idiot lawyers started stealing from the system under the guise of disability insurance and life insurance. Has anyone actually looked the data? There are 40 million people in the USA over the age of 65 and 60 million people collecting social security. A modern day definition of deadbeat, any lazy ass collecting social security under the age of 65. AND NO, I will not apologize. Call me a racist, bad backlist, or just plain a jerk and you are doing everything but what you should do - GET MY MONEY BACK AND GIVE TO THE OLD. They actually earned it.

 

You are welcome to elaborate what you mean with a valid argument, whenever you want.

 

How does your point of view account for any rate of unemployment above one percent?

 

What you typed was meaningless twaddle. That is the only valid remark that can be made

 

This ignores the mitigation of risk through diversification and age adjustment for long term investment accounts. No one invested in these types of accounts was harmed financially with the 2008 recession. By the end of 2010, for example, the average 401K plan had a 10-year return on investment of slightly more than 8%. Yes, they took a "paper loss" in 2008 but stock market had basically recovered by the end of 2009. The mutual funds used in 401K's outperformed the average stock market because they are selected stock investments as opposed to general across the board investments.

The "recession" didn't affect anyone close to retirement age because their accounts had already been divested of stocks and were invested in secure investments. There is one exception to this but the problem wasn't caused by the economy but instead was caused by the Federal Reserve. When approaching retirement age a person gets out of the stock market and into guarenteed investments and that includes T-bills as well as municiple bonds and precious metals.

With the onslaught of the 2008 recession the Federal Reserve stepped in and slashed interest rates which has artificially reduced the "value of money" in the free market that is normally betweeen 4.5% to 6.5%. This was a real "hit" to investors in T-Bills as it lowered their return on investment dramatically. Between 1962-2011 the average interest rate on a T-Bill was 5.22% but because of Federal Reserve interventionism the average interest rate was only 1.80% from 2002-2011 predominatly because the interest has been below 1% for the last four years. Someone nearing retirement in 2002 could have invested perhaps as much as 30% of their assets in T-Bills and while they didn't lose any of their assets they have lost much of the interest that they should have received without Federal Reserve interventionism.

http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/histretSP.html

At the same time though we could also assume that they would have about one-third of their investment capital in precious metals such as gold and silver. If one-third of their money was invested in gold from 2002-2011 then they saw an increase in the value of gold from under $300/oz to over $1500/oz or a 50% annual return on investment.

http://www.kitco.com/scripts/hist_charts/yearly_graphs.plx

In simple numbers if we assume $200,000 in investment capital equally divided between T-Bills and gold we'd have the following results over the ten year period for someone retiring at the end of 2011.

T-Bills > $100,000 @ 1.80% interest for 10 years = $118,000 (principle + interest)
Gold > $100,000 @ 50% interest for 10 years = $500,000 (principle + interest)

Even if we assumed this was only 2/3rds of the person's investment account and there was another $100,000 invested in stock (which there shouldn't be for a person within ten years of retirement) and they lost it all they would still have $618,000 in their investment portfolio based upon a simple diversification of investments in age adjusted accounts for someone at 55 in 2002.

From $300,000 to $618,000 in 10-years during the worst economic downturn since the Great Depression. Not bad in my opinion. This is based upon actual numbers using the universally accepted investment principles of diversification and age-adjustments for long term investment accounts.

Once again, I challenge anyone to provide an example where diversification and age-adjusted investment accounts would ever have lost money or even not earned money over an extended period of time. Many like to say there is risk but in reality that risk is completely mitigated by diversification and age-adjustment and doesn't actually exist. The investment experts all agree that diversification and age-adjustmed retirement accounts are the key to retirement because it always works regardless of the economic fluxuations that have always been "short term" (i.e. over a few years) as opposed to long term.

 

You again ignore the fact that the economic evidence shows that, due to risk, SS is found to be pareto improving. Every comment you've provided has been about dodging that fact

 

In trying to address "diversification" for those that seem to be unaware of how it works I came across the following from EF Moody which addresses it.

http://www.efmoody.com/investments/diversification.html

I won't go into the details because the reader can do that themself but will point out one fact about this essay. It doesn't address "losing money" but instead addresses the differences in return on investment. It is quite analytical about diversification and correlation of investments as well as being critical of the knowledge of some investment advisors but the main issue is that a person can profit more or less but in all cases the investor profits.

It's a good read nonetheless as it does present valid issues for investing that need to be considered by private investment firms creating mutual funds that would be a component of privatization. The return on investments will vary based upon the mutual funds but in all cases they will provide a substantial return on investment.

 

Not a single example has been provided that establishes this "pareto improvement" of SS and the statement itself is unsupported in this discussion. If the statement "pareto improvement" can not be supported by example then it is a worthless statement. I can say the moon is made out of green cheese but just saying it over and over again does not establish that the moon is made out of green cheese.

The facts are clear.

Social Security mitigates poverty by the expendature of the assets of other individuals.

Privatization eliminates poverty though the investment of the assets of the individual.

Social Security causes "harm" to those that lose their personal income which is given by the government to others in the form of welfare.

Privatization harms no one because the individual owns their personal income plus the increased wealth it produces through investment.

Unless this can be shown to be wrong then the pareto improvement is with private investments which cause no harm to other individuals.

 

That would be a fib. We've given the reference and we referred directly to the paper's simulation of the impact of risk. You just don't like it as it shows that your ideological stance is actually based on a coercive loss

 

Provide evidence from the study to support the claims being made. Otherwise this remains a claim that the moon is made out of green cheese.

A claim that the stock market crash of 1929 would have had a negative effect on diversified and age adjusted retirement investments has been proven to be false. A claim that the 2008 recession would have had a negative effect on diversified and age adujusted retiremenet investments has been proven false.

The "risk of investments" has been proven to be false because even in the most extreme cases the investments continue to grow for the individuals invested in long term diversified and age adjusted accounts.

 

You are welcome to provide a valid rebuttal to my simple American English, whenever you feel capable of it. You are welcome to reference any dictionaries you want, and even some thesauri to help you better understand the American English language.

We could be lowering our tax burden, by solving official poverty in our republic in a market friendly manner which better ensures the general prosperity and general welfare by increasing the circulation of money in our institutional system of money and market based systems and political economy.

 

How would that factor for any poverty inducing natural rate of unemployment above one percent?

 

You've come out with twaddle, hoping that the use of economic term will disguise the fact that your 'argument' is meaningless.

And how are you going to solve poverty? Be specific now! That guff about 'market friendly' way was just guff.

This is as meaningless as your 'solve natural unemployment by using unemployment benefit' circular prance. Try and refer to a poverty alleviation policy.

 

Official poverty can easily be solved with a wage that could be as easy to administer as our current minimum wage laws are now, with recourse to unemployment compensation that conforms to our already existing concept and legal doctrine regarding employment at will; because it could be applied for, simply by being unemployed. If that form of minimum wage also clears our poverty guidelines, it would be difficult to imagine secular persons wanting to stay in official poverty on an at-will basis.

We could be lowering our tax burden through attrition from more expensive forms of means tested welfare and social security.

You are welcome to present any scenario you feel may "break" such a simple public policy choice.

 

Rubbish! The minimum wage, for example, is an inefficient poverty alleviation device. And calling an imposed wage 'market friendly' really isn't cunning

Given your minimum wage stuff is complete bobbins, your views on tax burden effects also makes no sense.