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  1. #16
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    Re: BUSH: Presidential Address

    Quote Originally Posted by afalzone
    The majority of people who think and say they are set for their retirement are mistaken. Even the well informed people are not prepared.
    Such arrogance on your part. Who are you to say people are not prepared? That *is* what you just said. What do you consider "prepared"? Why aren't the "well informed" prepared by your estimation?

    There is a lot to be said of what PaternityTest wrote. Wisdom and wealth are more highly correlated than income and wealth. Living within one's means is key, and that includes planning ahead for a future you can not perfectly predict.

    For me, this means putting away around 20% of my gross salary and also having plans in place should I become disabled or die young. Am I not prepared? If I *am* prepared, does that mean that I am not well informed, as you asserted?

    Few things bother me more than condescending attitudes, and that's what the insistance of the "status quo" crowd is. The insistance that the government knows better, that people are too stupid to save for themselves, etc., all drives me a bit nuts. A lot of people *do* know better and could save the government a lot of money by cutting us off from SS. I don't need it. Given the choice of cutting my contributions in half and never receiving a dime back, I'd jump at it. That would save the government a lot of money.

    Instead we have a society where living beyond one's means is the norm. Rather than bloating up a government program to handle those who are able to fend for themselves, I'd prefer to address the problem now. Why wait for people to retire without saving a dime? Emphasize the need to save and give consequences for not doing so. Now there is little incentive because good 'ol Uncle Sam will always be there to catch you. Folks need to take a bit of responsibility for themselves, at least the majority who are truly able.

    I'm still waiting for concrete suggestions on how the system may be saved without really raising the withholding significantly, cutting benefits significantly, or raising the retirement age significantly. With baby-boomers getting ready to retire, the math simply does not work. And you know full well the cries that would be heard if Bush suggested any of the above ideas. It would make the present whining seem calm in comparison.

    uudarts,

    You haven't paid attention if this is the first time you noticed the "optional" or "voluntary" part of it. It was mentioned in the SOTU address, though from the outcry of the opposition you'd never know it. Clearly Bush's handlers recognize this perception and tried to address it by having Bush use the words "optional" and "voluntary" at least 20 times during the speech.

  2. #17
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    Re: BUSH: Presidential Address

    Such ignorance on your part. I take it you know better than people at Morgan Stanley and the other financial advising firms that I have met with. You also better than the books that I have read that talk about how few people are truly prepared for retirement. The questions you raise do point out my exact argument. Ask 100 people in this country how much money they will need for retirement and you will get 100 different answers. Many people who say they are prepared are quite often not prepared. Is this true for everyone? Of course not. Is this what I said. Of course not, but you seemed to make it so. Many of the people in this country who think they are prepared for retirement are not.

    Living well within one's means and saving are cornerstones or personal financial health. No doubt about it. That doesn't change the fact that many people in this country are not fully ready to retire. Many will work, at least part time, for a long time past the retirement age.

    Condescending attitudes are bad, but worse is ill thought ideas. While a lot of people do know how to save and invest their money well, a lot of people don't. When you design a program like SS, you have to design it for the whole of society. SS could 'save' money by cutting you off assuming that the present value of the future withdrawals that you would make from SS outweigh the present value of the contributions that you make into it. It is quite probably that they could save money by cutting you out now. That being said, there is no steadfast way for the program to know that you will be able to function without social security. This is much like the state requiring automobile insurance. You may very well be able to pay for yourself should you get into an accident, but states require you to carry it to make sure that you have some baseline ability to pay for yourself should you get in an accident. People in sound financial shape don't need it, but the government has no way of knowing who can and can't cover the costs so they make it mandatory. Unless SS has some sort of precogs like you see in Minority Report, they have no way to know how much or how little money you will have going into and during retirement.

    The only people who are really talking about bloating up a government program are those who are proposing a duplicate SS system. People are talking about simply making sure that a program that the vast majority of people in this country agree with is solvent in the long run.

    In your post you noted, "Now there is little incentive because good 'ol Uncle Sam will always be there to catch you." Do you really think that people are hitting Vegas with their retirement income because they know they'll be able to kick back and enjoy the good life on their SS income. If so, I think you need to check up on exactly how much people get from SS. It isn't that much. SS is an insurance program to ensure that people have some sort of income during the years when they can't work. This program is fully funded by workers and employers. It avoids the costs of welfare, that the state would pay anyways, that many low income seniors would recieving if they didn't have SS.

    There are also plenty of incentives to save now. The government provides plenty of ways to avoid income taxes through 401(k)'s and IRA's. Many people take part in these, but few people really save enough to live as they think they want to during retirement.

    Making the SS program solvent in the long run will be difficult without any of the 3 changes that you mentioned. To boot, few people want to bring changes forward because they know that Dubya's billiant personal account plan will be tacked on to whatever they suggest. Bipartisanship under the current regime means agreeing to what the Bush admin suggests.

    I know very well the cries Bush would hear if he put forward real change. Given that he is a second term president, he is in a very good place to hear the cries. The changes could be implemented so they impact those that are far away from retirement. Given the increase in longevity of the general population, it only makes sense that the retirement age should be raised at some point. There are some very basic changes that could make the system solvent and let us move on towards more important issues. The situation as it is right now is not that dire. Under the current program, the system will only be 85-90% funded in 40 years or so. Obviously the changes that are needed will have more impact if made sooner rather than later, but sweeping radical changes are not the only way to solve this issue.

  3. #18
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    Re: BUSH: Presidential Address

    Quote Originally Posted by afalzone
    Such ignorance on your part. I take it you know better than people at Morgan Stanley and the other financial advising firms that I have met with. You also better than the books that I have read that talk about how few people are truly prepared for retirement.
    I have no use for mincing words. Morgan Stanley and the books you have read have nothing to do with SS. I have absolute faith and the financial education, and more importantly the financial track record, to prove my case. I am prepared. I have made my way into the upper ranks of income, have many times my annual income in savings/assets, and have plans in place in the event of my death or disability to care for my family and I've done this all before I started having a family. Most importantly I have consistently upped my savings rather than blowing my raises on material crap.

    Snide comments aside, the funny thing is that we actually agree on some aspects.

    Where we seem to differ, and the expanse is massive, is that your "solution" (an SS program of some sort) is a program that really comes down to little more than a government mandated Ponzi-scheme. What else can one call coerced contribution where the money paid in goes entirely to others, with the "promise" that you'll get yours when the time comes?

    The only sustainable solution is one where people pay their own way, not the way of those who came before. Demographics make this clear.

    There is no excuse for people who are able, yet do not prepare for their own future.

    It does not take a financial degree or even copious classes in finances.

    It takes discipline.

    It takes commitment.

    It takes a rudimentary understanding that retirement means living off what you have saved during your working years and knowing that things may change when you least expect.

    These are very basic concepts and if followed by the majority, they would eliminate the need for supplemental payments from the government during retirement.

    It used to be kids learned the story of the ant and the grasshopper.

    Aside from disability and survivor benefits, SS is the epitome of shirking one's responsibility. It says, "You're too foolish, trust us, the government, for we know what to do with your money better than you do." Note, that's the government, not Morgan Stanley or any other financial text you wish to mention.

    This is the same government that has run a deficit almost exclusively for over a half century. You think these clowns (and with a few exceptions I am referring to all those politicians of any party) know how to manage money? Get real.

    The simple fact is that there are plenty of people in this country with the will and the means to provide for themselves. Those who care to look can find disability plans, retirement vehicles for their savings, and all other manner of financial opportunities.

    IMHO, "SS" should be reserved only for those truly unable to do it alone. And I do not mean those who lived high on the hog rather than save. Let such people live at the edge of poverty. It is the cost of foolishness. People truly unable, survivors, those with disabilities, etc., could be served by a program a fraction of the size of SS.

    The real task is that working stiffs have paid in and deserve something back. You can't turn off the program overnight. You can begin a shift, where contributions start to decrease and benefits for those who begin paying less into the system also begin to decrease. You can wean people off the government tit, so to speak. Ultimately this is what I believe is best. Government SS should be there only for those who really need it, not forced upon those who do not want it.

  4. #19
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    Re: BUSH: Presidential Address

    I guess im fortunate On both sides of my family my grand fathers were excellent business men and money isnt an issue for either of my grandmothers both grandfathers have passed. My wifes Parents Who make a substancial amount of money dont act like it. Up until last year my father-inlaw drove an 88 ford ranger.
    They pay for my wifes education which will conclude thankfully in 10 months. I know that he can retire ( i dont believe he will) within the next 2 years he is 53. I'm lucky becuase i have good role models. I hope that i can exercise the same discipline in my buying and saving habits. SS has its place but ultimately i believe its the persons responsibility to secure thier financial future.

  5. #20
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    Re: BUSH: Presidential Address

    No doubt they don't have anything to do with SS as my comment about them had nothing to do with SS specifically. Unless you have forgotten, I said that most of the people who think they are prepared for retirement are not. You seem to have misconstrued this (twice now) as me saying that you are not prepared for retirement. Perhaps next time instead of making comments about snide remarks you ask me what I mean. Nowhere did I say that EVERYONE who thinks they are on the way to a sound retirement are sorely mistaken. I said the majority. People say a lot of things. Ask anyone who has bought a car at a dealership recently if they got a good deal. They will all say yes. Truth is, the majority of people get hosed at a car dealership and pay more than they really need to.

    We do agree on many things. Instead of going on about personal responsibility, I deal in reality. No matter how well prepared many people are, almost all are a job loss and some medical bills away from being broke. SS is an insurance program to ensure that in their retired years people have some sort of income to keep them from being destitute, living in the streets, bumming change on corners, freezing to death in the winter, etc. The current program has people paying for this benefit. SS was put in place for a good reason. You seem to be contradicting the President, Republican party, Democratic party and the vast majority of Americans by saying it should be done away with.

    What you seem to be advocating is welfare instead of social security. You want the program to be for old people who really can't financially support themselves. Without SS, you will find that this constitutes a very large proportion of the population. This of course means that your tax dollars would simply be going to pay for this program instead of SS. The difference is that you would want to take seniors off of this program if they had made money in their lifetime and did not save it or have successful investments.

    You propose thus the elimination of SS, but a government program to be put in place when people are elderly and can't support themselves. We already have this. It is called welfare. The latent consequences of what you are suggest is that people who don't save anyways will have more money to blow, they will not pay into any SS system and will thus be living off of everyone's tax dollars when they are on welfare.

    Some sort of SS program is wanted by the vast majority of the US population and it was put in place for very valid reasons. Unfortunately, the 'greatest generation' have stuck us with the bill here. They didn't pay their own way fully. SS is after all, a partially funded system. There is a surplus. There are some basic changes that will push SS to being solvent for the very distant future.

    Doing away with the program all together is a fairy tale idea. You can spend a couple of threads talking about it, but it is not reality and will never happen.

    On an unrelated note, it is interesting that someone who has stuanchly defended Bush in the past is so critical of politicians who are unable to balance the books. We have the more free spending president in recent memory (could be history by the time he is done), but I don't recall you making any threads bitching about him.

  6. #21
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    Re: BUSH: Presidential Address

    afalzone-

    I find your essays on this topic insightful and informative, and appreciate the read.

    I keep coming back to the notion that a good number of people have little or no understanding of how the stock market works. Granted, participation in the proposed reform is voluntary, but would all those who volunteer to participate be wise to the ways of wallstreet? I don't think so. And what of those who fail? Will the government be there to provide a safety net?

    Bush mentioned treasury bonds as an alternative investment for those not willing to risk wall street. Certainly the government has never defaulted on payment of those bills, but isn't the entire national debt tied up in treasury bonds? Don't foreign governments hold close to 45% of privately held US debt? What if say Japan or China, who both hold a substantial percentage of treasury bills, get annoyed at the US and decide to sell? What happens to the bond market?

  7. #22
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    Re: BUSH: Presidential Address

    Quote Originally Posted by baghdad bob
    question: all of a sudden i'm hearing the word voluntary in regards to his personal/private accounts. i don't remember that being a option when he first started this road trip.

    bb

    Private accounts have always been voluntary under the Bush plan. Interesting that after so much cutting and pasting over the past few months that you never bothered to read the artieles...

  8. #23
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    Re: BUSH: Presidential Address

    Quote Originally Posted by myv65
    uudarts,

    You haven't paid attention if this is the first time you noticed the "optional" or "voluntary" part of it. It was mentioned in the SOTU address, though from the outcry of the opposition you'd never know it. Clearly Bush's handlers recognize this perception and tried to address it by having Bush use the words "optional" and "voluntary" at least 20 times during the speech.

    oh silly me, asleep at the wheel, but then again i don't hang on president bush's every word. no baited breath for the next chicken wing.

    since perversion of facts by president bush followers seems to be standard sop. i took a look at the SOTU address. voluntary once, no optional mentioned, maybe it was under the podium, or maybe under a chair somewhere.
    A slide showed Mr Bush in the Oval office, leaning to look under a piece of furniture. "Those weapons of mass destruction have got to be here somewhere," he told the audience, drawing applause.

    during the month of feburary and half of march president bush spoke on private accounts in 14 states and used the word voluntary in 3 of those speeches. it wasn't until march 18 that it was used with any regularity. one would think that it would be an important part of the the plan. by golly, he forgot again today.


    President Discusses Social Security for Future Generations in Virginia

    all sources can be back tracked from the above link or one can use the home page of president bush. http://www.whitehouse.gov/




    one thing that i observed during my research, is how seldom the words voluntary and personal accounts were one thought. i wonder why "voluntary personal accounts" wasn't made into one of those catchy slogans the administration and friends like so much.



    oh silly me, asleep at the wheel!




    bb
    Last edited by baghdad bob; 04-30-2005 at 02:03 AM.

  9. #24
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    Re: BUSH: Presidential Address

    nxtrastout,

    Bond prices would go down and I'd probably be able to get a house since mortgage rates are tied to the bond market. Thanks for the compliments on the post. Putting money into treasury bonds would be not unlike what is done with the SS surplus today. Diverting money into private accounts doesn't do anything to increase long term solvency. People diverting money into private accounts would reduce the amount of money going into the SS surplus. While these people would need fewer benefits when they got to SS age, they still would still take a large percentage of their money from the SS program itself. In the short to medium run, there would be less money in the SS surplus pool and in the long run, they would still be pulling out equivalent proportion benefits from the program.

    True most people don't understand Wall Street. Few people also have my65v's understanding of personal finance. I have always said that personal finance should be a mandatory class taught in school. It should be mandated at a federal level in order for schools to get funding and should be taught roughly around the same age as sex ed is taught as this is the age where kids are often starting to earn money. It's no assurance that people will act in ways that my65v is saying they should, but at least the next generation of Americans will know at least a baseline about their own financial shape.

    ps. U a big stout fan? I just made an oatmeal stout last week. It's gonna rock when it is finished.

    BB,

    Dubya's plan has pretty much always had the personal accounts as optional. I've debated about this many times on here and it was always mentioned as such. One of the reasons that Bush has been on an SS tour is to fix misconceptions about his plan such as personal accounts being mandatory.

  10. #25
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    Re: BUSH: Presidential Address

    "It should be mandated at a federal level in order for schools to get funding and should be taught roughly around the same age as sex ed is taught as this is the age where kids are often starting to earn money."

    You have to be kidding. Federal involvement? Isnt that like teaching surgical technique with with the advice/encouragement of axe murderers?

    I think it should be taught in schools but really...Federal involvement? Where does the notion that "Big Brother knows Best" end.
    Last edited by jimzinsocal; 04-30-2005 at 01:13 PM.

  11. #26
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    Re: BUSH: Presidential Address

    Well when you don't do things on a federal level, it is done at a state level which would mean that this would have to be mandated by each state. No doubt, it would not happen unilaterally. Also, given that the feds fund the schools, they're able to make demands on them. I'm not saying that it should be a full credit course taught every year, but teaching people the basics (something like what is in the Wealthy Barber) in a half credit course would pay off in the long run.

  12. #27
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    Re: BUSH: Presidential Address

    ^^I understand the "want" you are after. I just have some problems with the "how". Can you imagine the fools in Washington having to write standards? Having to redefine liberal and conservative as it applies to $$$?
    Five year discussion. Better local systems get a guy in from some investment house and handle a class on basic personal finance. The tools. The rules of thumb. The verbage etc.

  13. #28
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    Re: BUSH: Presidential Address

    originally posted by afalzone
    ps. U a big stout fan? I just made an oatmeal stout last week. It's gonna rock when it is finished.
    Yes, the occasional stout is a good thing…TV beer pales in comparison

    Oatmeal stout reminds me of this little place I used to stop at Fridays after work, called The Poet’s Corner. They made bread and sold beer and I’d pick up a loaf and a couple Samuel Smith’s Oatmeal stouts. It was always hot and steamy, and there was this dark-haired girl who used to knead the bread…ah, but that’s another story. Back to bonds...

    The market is flooded, bond prices tank, interest rates go up, it’s okay for those buying bonds, but those who are holding and want to cash out are fairly screwed. And some folks may not have the time to wait until the bonds mature. In such a scenario the stock market would likely feel the ripple in a big way. Granted, it’s perhaps far-fetched, China, Japan and other holders of treasury bonds likely wouldn’t flood the market as they’d be selling at a loss, but it could happen. Trade wars happen; Japan and the US have been going back and forth for awhile now. There’s tension between the US and China over Taiwan, as well as other issues. I’m sure they’re not above using leverage. And the US is issuing more bonds all the time to cover the national debt. The deficit is continuing to climb. I read somewhere that since 2001 foreign entities have bought over 90% of new treasury issued securities…just something to think about.

  14. #29
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    Re: BUSH: Presidential Address

    Dood,

    I'm waaaaaaay too hungover to think about that right now.

  15. #30
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    Re: BUSH: Presidential Address

    Quote Originally Posted by afalzone
    Dood,

    I'm waaaaaaay too hungover to think about that right now.

    Have a beer then. It will fix your hangover right quick!

    Either that or a bloody mary. those always do the trick for me. EXTRA SPICY!!

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