The Cellar Security proposal

[LabRat]

wow, never seen Bruce get riled up so quick !

[Troubleshooter]

Look, just tax everybody at an even 15% nationally, 5% state and give every adult a check for $1000 each month.

You can hippy up and live on that alone if you live with a few other people in just about any part of the country.

Or you can use that as a good way to help pay the necessities while working towards a worthwhile goal.

Who knows? It makes more sense than anything the gov't is going to tell us.

[lookout123]

look - i don't know what bush's plan will really look like so i'm not basing my thoughts on his plan.

despite tw's frequent cries that this is a ploy to make stockbrokers wealthy and HM's concerns that this will screw over the little people, i think individual accounts are a good idea.

1) since tw has brought up the idea of individual accounts making brokers (such as myself) wealthy i'll respond to that. most of us when talking it through have come to the conclusion that a solid ownership system would most likely take clients away from us, not add additional funds to our management. the government system isn't going to call XYZ broker and say "i'll take 1,000 sh of Worldcom" - by necessity, they would have their own licensed traders who will buy straight from the street without the markup of a middleman.
as people get comfortable with the new system, human nature would set in and they would realize that they can invest less $$ in their outside accounts because of the stability within their gov't personal acct.

2) i know that many, like HM, are concerned that people will make foolish decisions with their personal accounts and retire with nothing.
A) If there are only five different options to choose your balance from, and they are all designed by prospectus to be managed in a conservative nature (as are many of the TSP's already in use) then that should alleviate the concern about JOhnny PUblic putting all of his money into a speculative venture.
B) I put together some numbers in another thread that showed what $100/month over a forty year career looks like in a Conservative Equity fund and a conservative bond fund. You can find it here .
C) I would not support anything that completely leaves people hanging in the wind. If at any point in time, a person who starts to withdraw from their personal account would receive a smaller benefit than those who didn't opt-in - then the gov't would have to make up the difference until the personal account returns to a position of strength. In short, it would be impossible to lose real benefits by choosing the personal accounts. That is more a peace of mind measure than anything because participation over a 20/30/40 year period in the individual account system will leave a large enough balance to ride smoothly through the down years.

3) Bruce's hot button is the hardest to deal with, because it is the most emotionally charged. Who gets what? Why does someone born a day later, get something different? There isn't a simple answer for the question. There will have to be a birthday cut off somewhere. i think 55 years old is too late. i think an incremental phase-in system from age 35-50 would be fair, with age 51 and above locked into the existing system with their expected benefits, unless they choose to opt-in. The most important thing to remember is that no one will lose any benefit that they have lived their life expecting.

4) How do we pay for it? well, i would think that my generation will probably pay the most for it. if our SS tax remains the same and roughly half goes into our personal account and the other half goes to the existing obligations, we have enough years to allow our personal accounts to compound and we can honor the promise made to those nearing retirement.

[russotto]

Shut it down cold turkey. Make euthanasia cheap and easy.

The grey lobby isn't going to allow anything useful to be done or benefits to be cut, and in about 10 years payroll taxes are going to have to go through the roof to pay the old farts, fostering intergenerational hatred.

[xoxoxoBruce]

Originally Posted by LabRat

wow, never seen Bruce get riled up so quick !

That's because you didn't see the first toilet seat debate.

[lookout123]

there, now i answered one - would you care to try answering any of the questions i've asked you in the past?

[quote]have you decided to post in a clear and concise manner exactly why individual retirement accounts won't work.[quote]

should i take your silence as a resounding "no"?

where oh where oh where is tw?

[tw]

Originally Posted by lookout123

where oh where oh where is tw?

Notice that Lookout123 refuses to deal with the basic fraud. Money is removed from the SS trust fund. No IOU is left. No interest is paid on that money.

Monies taken by the government to pay today's bills can be replaced in the SS Trust Fund with T-bills. IOW the government pays the SS Trust Fund interest on the confiscated (borrowed) money. All Social Security problems solved with no increased risk to the public AND with more money for Social Security. One reason why Lookout123 avoids this? No windfall profits to be made by stock brokers.

[lookout123]

No windfall profits to be made by stock brokers.

you ignorant SOB, have you even read my previous posts on the subject. it is the general opinion of most people in my field that a well designed and run Individual account system would make many of our clients less likely to invest additional $$ with us - thereby taking money OUT of our pockets, not putting more in.

ignoring the idea of paying back the IOU's? hardly. that is an option. if i've read correctly, that method would put the system back on track to remain solvent through the middle of this century. that would be good for anyone who plans on dieing before then. but let me ask you, how much do you trust the politicians not to raid the cookie jar? it hasn't worked up to this point.

have you read any of my posts describing the effects of only $100 month savings in a personal account of different types of funds? or is it just easier to ignore those real life scenarios and say i'm a stock broker so i must be a liar?

tell us, what specifically scares you about individual accounts? please give me specifics, not generalizations about MBA's, shiny shoe salesman, and mental midgets - tell us what exactly doesn't work, in regards to individual accounts?

[tw]

Originally Posted by lookout123

you ignorant SOB, have you even read my previous posts on the subject. it is the general opinion of most people in my field that a well designed and run Individual account system would make many of our clients less likely to invest additional $$ with us - thereby taking money OUT of our pockets, not putting more in.

Ignorant SOB? Posting insults when caught lying again? Clearly your god would not approve.

Want people to invest more of their retirement income elsewhere? Lower the SS taxes. Reduce the number from about 15%. Simple solution without adding complex laws to an already bloated tax code. Just another solution that involes no financial advisors - ie stock brokers. Lookout123 could not recommend a simple solution that provides no profit.

Somehow we will divert SS money to the stock market - and stock brokers will get none of the business? Selling East River bridges again?

Need to fix Social Security? Make the government pay interest rates on the money taken from the Trust Funds. Just another simple solution that will not enrich stock brokers. Lookout123 does not like simple solutions. No profit. No wonder he posts insults. Honest logic from a stock broker?

[tw]

Originally Posted by lookout123

tell us, what specifically scares you about individual accounts? please give me specifics, not generalizations about MBA's, shiny shoe salesman, and mental midgets - tell us what exactly doesn't work, in regards to individual accounts?

You want private investment. Its called Roth IRA. Its called 401K. Its called 403K. Plenty of private investment schemes already exist. Why would you advocate raiding the cookie jar? To fix SS? Even the president finally had to concede this private investment nonsense does nothing to fix SS.

Why more complex private investment schemes that only increase risk unnecessarily? Workers have a long list of private investment schemes they are suppose to be using. SS is the safety valve - a guaranteed nest egg - for those who failed in their private investment schemes. A problem the Wall Street Journal recently discussed in an article entitled "Theft From 401(k)s Is on the Rise". But Lookout123 pretends we depend only on SS for retirement. Therefore we must increase the ROI on SS money - increased risk be damned.

SS is the safety net - the one source of money not at risk - for good reason.

Plenty of private investment oppurtunities are available without complicating Social Security. Those shiny shoe MBAs hope we forget that little fact. Anything to get a piece of the Social Security money into their managed portfolios. Its called greed. Another reason for politicians to solicit legalized bribery money from grossly overpaid stockbrokers.

Calm down Lookout123. Your god does not approve of your routine half truth postings. A little confession rather than posting insults is good for your soul.

[lookout123]

wow - i see you once again typed a lot but didn't actually answer the question about what specific part of individual SS accounts scare you.

Somehow we will divert SS money to the stock market - and stock brokers will get none of the business?

Let me get this straight. you honestly think that if the government has all those$X00,000,000,000 to invest they are going to call lookout and say "hey lookout - could you buy 20,000 share of Intel?" give me a break tw.

[glatt]

TW, my default position on Bush is that he is not here to help the little guy. It's usually easy for me to see his angle in every move he makes, but I haven't figured it out this time with his proposals to change social security.

Why, in you opinion, is Bush proposing this change? Who is he trying to help here? What's his motivation? Do you really think his prime motivation is to support the stock broker lobby? I just don't understand why he is pushing for this, or how it's going to positively impact SS in any way.

[wolf]

[quote=tw Its called 403K. [/QUOTE]

I know this is a very, very minor point ... but the non-profit organization version of a 401(k) is a 403(b).

I have two of 'em.