[midwinter]

Originally Posted by medicineman

Andrew Carnegie became rich and famous with a fortuitous oil investment, and as a steel baron. His 'secret' of success was to work hard and be somewhat lucky. I won't characterize how the super-rich pontificate. He wasn't thought of too highly in Johnstown, Pa. But that's neither here nor there.

It's never been my policy to look into someone else's pockets. I don't envy. I'm happy if someone does well. All I ask is for is my opportunity. I certainly don't want to 'make it' on someone else's back.

Carnegie argued forcefully that it was the duty of the wealthy to redistribute their money and not keep it in the family, because maintaining it would eventually consolidate it among a few super-rich families. And once we've got that, we might as well go back to feudalism.

The kind of laissez-faire position you're advocating was the pipe-dream of the 18th and 19th centuries, and it didn't work then. Communism is the pipe-dream of the 19th century, emerging completely in response to the horrors of laissez-faire doctrines, and it didn't work then, either.

The difference, I think, is that libertarians don't seem to have noticed that their positions were tried and failed utterly 200 years ago.

[macintologist]

Originally Posted by itai195

I don't think so, after all we have this 401(k)/IRA boom going on. Interestingly, voluntary participation and personal investment management don't always yield satisfying results.

Yea but at least I'm not paying for it.

Personally I'd just put money in a liquid high-interest savings account like HSBCDirect or INGDirect and just let the interest compound.

[macintologist]

Originally Posted by midwinter

The difference, I think, is that libertarians don't seem to have noticed that their positions were tried and failed utterly 200 years ago.

Are you joking? Government was worse back then. Government supported and enforced slavery, and all sorts of terrible discriminatory laws.

So no, libertarianism has never been tried, but it should. That's why there is the Free State Project.

[Monique]

Originally Posted by macintologist

I'm a sophmore in college and I started a Roth IRA almost a year ago. So far I have allocated a little over $200 to my IRA in that time period. Of course when I have steady full time employment it will be a lot more. One thing about looking at my pay stubs from summer work, is that I am thouroughly pissed that 6% of my paycheck is seized from me by the government to be put in the social security trust fund.

There is something seriously wrong in this country when most people you talk to don't think there's anything wrong with me being forced to participate in social security. Can anyone please justify being forced to particupate in this ponzi scheme.

It's one thing when the government sends you a form on your 18th birthday (similar to the selective service notice for 18 year old males) notifying you of the opportunities surrounding the Social Security program and how participation in this program will mean a confortable retirement and peace of mind.

It's another thing when I am given absolutely no choice in the matter.

Somebody please justify this.


Update: This IRS form 4029 should be available to EVERYONE and not just some sham religious groups.

You are only 18 so you do not fully understand that you live in a society. Unless you family was extremely poor you have not experienced harship. The supposedly high amount you give in taxes cover thousand and thousand of programs and help people. No, you should not have to help others. So, when you need help you should not received it.

Once upon a time, seniors did not have any protections and any social security. So, what happened they would end up in cars, under bridges and often died of malnutrition, because of the elements, because they could not received adequate health care.

Now, look at your grandparents and tell them, they have to go without.

[Dr Reducto]

Originally Posted by Monique

Once upon a time, seniors did not have any protections and any social security. So, what happened they would end up in cars, under bridges and often died of malnutrition, because of the elements, because they could not received adequate health care.

Now, look at your grandparents and tell them, they have to go without.

My grandparents are the ones who got me started on the social security reform issue. With smart investing, 12% of your lifetime income can yield a pretty nice retirement. Even if you only made 20k a year your whole life, you could be looking at quite a nice retirement, assuming good investments were made.

[macintologist]

Originally Posted by Dr Reducto

My grandparents are the ones who got me started on the social security reform issue. With smart investing, 12% of your lifetime income can yield a pretty nice retirement. Even if you only made 20k a year your whole life, you could be looking at quite a nice retirement, assuming good investments were made.

You don't even need a good "investment", just stick it all in a 5% liquid savings account.

Let's say you make $2000 a month you're whole life on average. Put away 10% of it and this is what you get. (assuming you start at age 20 and retire at age 70 and die at age 95)


Not bad at all.

[itai195]

$35,000 annually is going to be diddly squat when you account for 50 years of inflation. Based on historical info, $35k in 2056 will be the equivalent of around $4700 in 2006 dollars. I don't know many people who can live off less than $400 a month.

Additionally, savings accounts (really money market deposit accounts in this case) don't always pay out 5%, as they do currently. I dont' know what their long term average is, but I doubt it's 5%.

[smacintush]

Originally Posted by itai195

$35,000 annually is going to be diddly squat when you account for 50 years of inflation. Based on historical info, $35k in 2056 will be the equivalent of around $4700 in 2006 dollars. I don't know many people who can live off less than $400 a month.

Additionally, savings accounts (really money market deposit accounts in this case) don't always pay out 5%, as they do currently. I dont' know what their long term average is, but I doubt it's 5%.

It's usually closer to 3% I believe.

[medicineman]

Originally Posted by smacintush

It's usually closer to 3% I believe.

EE Bonds are now at 3.7% There are a lot of 5% commercial instruments around. But I would bet on an index fund over the life of 50 years.

[itai195]

Originally Posted by medicineman

I would bet on an index fund over the life of 50 years.

Same. But I don't think most people are capable of doing this through thick and thin.

[medicineman]

Originally Posted by itai195

Same. But I don't think most people are capable of doing this through thick and thin.

Didn't one of the proposed plans allow for a small percent of your SS payment to be deposited into the market? But people rejected the idea of 'privitization' or someone making a small fee for administration.

[BRussell]

Originally Posted by medicineman

Didn't one of the proposed plans allow for a small percent of your SS payment to be deposited into the market? But people rejected the idea of 'privitization' or someone making a small fee for administration.

Yeah, because the plan would have taken money out of the social security fund that is supposed to pay for current retirees, and which the people pushing for the plan said was going "bankrupt." So the answer is to bankrupt it faster? No one has any problem with people investing in "private accounts" otherwise.

[itai195]

What BRussell said. My other main concern with the private accounts was that I expect Congress would inevitably liberalize the rules - as they did for 401(k) accounts - and allow people's bad habits to encroach on their SS money. These accounts must never allow loans, early payouts, etc.

[medicineman]

Originally Posted by itai195

What BRussell said. My other main concern with the private accounts was that I expect Congress would inevitably liberalize the rules - as they did for 401(k) accounts - and allow people's bad habits to encroach on their SS money. These accounts must never allow loans, early payouts, etc.

It would seem to me, that a few bright people locked in a room could come up with a workable plan. Rather than one group saying, 'can't do it, it's a Dem plan', or 'can't do it, it's a GOP plan'. But first you have to decide WHAT you want social security to be. A full retirment plan, or a safety net, or something in between.


(this just in: Floyd homers, 2-1 Mets)

[itai195]

Originally Posted by medicineman

It would seem to me, that a few bright people locked in a room could come up with a workable plan. Rather than one group saying, 'can't do it, it's a Dem plan', or 'can't do it, it's a GOP plan'. But first you have to decide WHAT you want social security to be. A full retirment plan, or a safety net, or something in between.

Probably. But any drastic changes will cause the AARP tokick and scream and boot out any politician who supports the plan.

[Spliffdaddy]

Have patience.

Social Security will fix itself soon enough.

When the money runs out.

[nonhuman]

Originally Posted by medicineman

It would seem to me, that a few bright people locked in a room could come up with a workable plan. Rather than one group saying, 'can't do it, it's a Dem plan', or 'can't do it, it's a GOP plan'. But first you have to decide WHAT you want social security to be. A full retirment plan, or a safety net, or something in between.


(this just in: Floyd homers, 2-1 Mets)

The thing is, the options are fairly limited. We can't really overhaul the system into some sort of savings or investment account without screwing the current generation of retirees, and really that idea doesn't make much sense because, just like the regular savings account, it wouldn't compensate for inflation. The strength of the current system is that inflation is (or can be) irrelevant, the amount of money going in already deals with inflation because it's a percentage of people's wages. As long as the money going out is distributed evenly amongst retirees, it really is a pretty good system. The problem, of course, is when we have significant deviations from the normal population growth.

To be honest, the more I think about it the more I'm coming around to the idea of the program. If we can eliminate as much of the bureaucratic overhead as possible, maybe we can hold back a portion of the intake in order to save up to at least attempt to cover future shortfalls. Of course that savings then has the same inflation problem. So maybe there's no way to handle it other than increasing the percentage that gets taken out of people's paychecks, which, no matter how much I'm starting to admire the system, I still think sucks.

(GO METS!)

[BlackGriffen]

In isolation, sure SS would be a ponzi scheme. It's not isolated, though. Look at all the other taxes you pay. You're paying not just for the past generation, but also for the present infrastructure and the up and coming generation. You might even say that you're investing in them, just as your grandparents invested in your parents and you. You paying Social Security isn't some ponzi scheme, it's your forebears' investment in you paying off. It's actually a nice system if you actually consider the totality of it. Especially since it reduces pressure on people to try to have large families in the hopes that at least one of their kids will be charitable enough to take care of them in their old age. Cause I don't know if you've noticed, but the world is getting a little crowded, and resources are in danger of becoming strained - water, energy, food, etc. It also means that those who never bother to have kids but still pay taxes to support schools and whatnot will have something even though they don't have family.

I agree with Timo - if you want to be a selfish little git and not participate at the minimum level you should just get out. You're more of a burden than you accuse old people of being if you get the benefits of society but don't give back your dues.

[Spliffdaddy]

Dude, you act like the money that's been paid into SS is still there.

They spent it.

If you give the government money - they spend it.

If the answer is to give more money to government - then can we please have the problem back?

[Dakar]

Originally Posted by Spliffdaddy

Have patience.

Social Security will fix itself soon enough.

When the money runs out.

And create a new problem. Unless you think they'll be letting old people starve in the streets.

[art_director]

Originally Posted by itai195

If you think 6% is bad, try being self-employed

No kidding, I'd give ANYTHING to pay a mere 6%.

itai: Are you a sole prop, S Corp, LLC, other?

[Spliffdaddy]

You guys are depressing me.

I don't think uncle sam is going to let me squeak by for another year pretending I'm not self-employed.

All my income is claimed as capital gains from the sale of real estate. Which seemed to work for the last 2 years.

The gig is up, I think. We'll see.

Maybe I'll get a part-time job so I'll have something to put in the "wages, tips, and other compensation" category.

[itai195]

Originally Posted by art_director

No kidding, I'd give ANYTHING to pay a mere 6%.

itai: Are you a sole prop, S Corp, LLC, other?

My wife actually, she is a sole proprietor but I do all the book keeping for her. May be incorporating in the next year if she expands her business and it makes sense. Problem is I don't like accountants

[Dr Reducto]

Originally Posted by BRussell

Yeah, because the plan would have taken money out of the social security fund that is supposed to pay for current retirees, and which the people pushing for the plan said was going "bankrupt." So the answer is to bankrupt it faster? No one has any problem with people investing in "private accounts" otherwise.

But the thing is, with the advances in medicine, and the mass of people about to hit retirement age, we have to do _something_.

Be it raising the age of payouts to the appropriate point on the bathtub curve (AARP is against it), lowering benefits (AARP), raising taxes (too many taxes and suddenly people wont care about letting old people die in the streets). It really is basically a government program that relies on "passing the buck", and we are right about at the point where someone's going to have to get the shaft.

If there is any justice in the world, the baby boomers will be the ones stuck with the bill (as opposed to higher taxes for the working generation). The ones who didn't have the foresight to save well in advance will learn the hard way that social security benefits won't help them out all that much, and that full retirement will likely be a financial impossibility, unless they have family willing to help out, or are willing to retire at a later age.

[art_director]

Originally Posted by itai195

My wife actually, she is a sole proprietor but I do all the book keeping for her. May be incorporating in the next year if she expands her business and it makes sense. Problem is I don't like accountants

I went S Corp last year. Now I feel like a fool for not doing so earlier. No doubt it has it's pros and cons, not to mention more interaction w your accountant(s), but it pays for itself.

[art_director]

Originally Posted by Spliffdaddy

I don't think uncle sam is going to let me squeak by for another year pretending I'm not self-employed.

All my income is claimed as capital gains from the sale of real estate. Which seemed to work for the last 2 years.

The gig is up, I think. We'll see.

Maybe I'll get a part-time job so I'll have something to put in the "wages, tips, and other compensation" category.

So you're for lower taxes and then dodging them all together. At the end of the day you want a free ride.

Typical Republican.

[itai195]

Spliffdaddy, I think the IRS may be knocking on your door in the near future

[Spliffdaddy]

I think capital gains taxes exceed what I'd pay if I just incorporated.

Ain't like I'm getting a free ride or anything. Prolly funding the war in Iraq single-handedly.

I could use more loopholes to exploit.