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Americans Are Putting Billions More Than Usual in Their 401(k)s

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Re: Americans Are Putting Billions More Than Usual in Their 401(k)s

#461

Post by bogomipz »

avn2109 wrote: post #167
bogomipz wrote: post #123

Earlier quoted context omitted.

>" The fact is you pay ~16% of your paycheck into social security." Not quite. This is actually split between the employee and the employer. With each contributing 6.2%. https://www.ssa.gov/pubs/EN-05-10022.pdf Also why are you admonishing the OP? He has every right to pessimistic about this current state of social security.

But your employer is perfectly capable of doing accounting. So they pass through their 6.2% to you. In practice the mechanism is that every employer figures it in to their offers, such that every offer you ever receive is ~6.2% lower than it would be if SS didn't exist.

I don't believe for a minute that if it Social Security were to be phased out everyone would see their salary rise 6.2%.

Re: Americans Are Putting Billions More Than Usual in Their 401(k)s

#462

Post by [deleted] »

mywittyname wrote: post #352
jimmyk wrote: post #302

Earlier quoted context omitted.

>The Fed can buy the bonds and hold them in perpetuity. And what cash will they give to the SSA in exchange for those bonds? Where will that come from?

> Where will that come from? The same place cash comes from now when the Fed buys t-bonds in order to manipulate the interest rate: nowhere. The Federal Reserve has the authority to create money to redeem any US government security.

[deleted]

Re: Americans Are Putting Billions More Than Usual in Their 401(k)s

#463

Post by TallGuyShort »

baddox wrote: post #433
TallGuyShort wrote: post #363

Earlier quoted context omitted.

It's not arbitrary, or about whose votes matter more or population density at all. It's because the United States is actually a union of what was, before the founding of the country as we know it, relatively sovereign states. By joining the union they were giving up much of that sovereignty. It was good for the union that more states joined, so the great compromise was to allow states who were fearful of being domina…

I know the reasons the electoral college was chosen. I still don't think it's necessarily a good idea, especially given the modern role of the President.

Oh I thought you had an erroneous understanding since, you know, you posted an inaccurate strawman in your previous comment.

Re: Americans Are Putting Billions More Than Usual in Their 401(k)s

#464

Post by soundwave106 »

xienze wrote: post #354
Frondo wrote: post #312

Earlier quoted context omitted.

That's it! That's the whole crux of the matter. A ponzi scheme has an intent to defraud. That's why they're illegal. Social security has no intent to defraud. It's not "legal cause the gubmint says so," it's legal because it's not a fraudulent money-making scheme designed to enrich the leader.

Splitting hairs. Of course the intent isn't to defraud, but they function in the same manner (need a constant supply of new investors [workers] to pay off the old investors [workers]) and have the same failure mode.

No, not really splitting hairs, as the solution for each is consequently is going to consequently be different. Ponzi schemes get banned because they are a form of fraud and have little redeeming value. The solution to a Ponzi scheme is to shut it down and arrest the con artist.

Social Security and other pay-as-you-go schemes aim to reduce poverty, especially elderly poverty. By this measure, it has succeeded quite well (http://www.nber.org/bah/summer04/w10466.html), and the probable reason pay as you go was chosen I imagine was to provide immediate benefit (recall this scheme was launched during the Great Depression). I would consider it radical (and would want one to provide considerable justification) if one wanted to ditch Social Security entirely.

A better debate in my mind, of course, would be whether to phase Social Security into a fully funded model versus pay-as-you-go model. I can buy that kind of argument, a fully funded retirement scheme is more secure than a PAYGO type.

But even as it stands, the current Social Security gap doesn't sound like a complete disaster. Part of it actually is because Social Security is not completely pay as you go -- Congress raised payroll taxes in 1983 in part to cover this gap (http://www.pewresearch.org/fact-tank/2015/08/18/5-facts-abou...). Part of it is because we have some variables to play with -- raising the retirement age or raising the payroll tax cap, for instance. Medicare actually sounds like its in worse shape at this moment.

Re: Americans Are Putting Billions More Than Usual in Their 401(k)s

#465

Post by tunap »

chrisabrams wrote: post #399
tunap wrote: post #325

Earlier quoted context omitted.

"Probably" see better results? I don't have, nor will I fetch for, the number of people who are solely reliant on SS, but my father is one of them. And he said the exact same words as you to me when I was a sprout. Now, after some bad decisions, and health issues as a direct result of long arduous work, he is glad to have that net. Please, don't tell me about my duties as a son, I've supported two family members thro…

That's great that you've recognized your duty to your family, but what happens when your children retire? What process is in place to help them? Current projects barely keep things solvent for the retiring baby boomer generation. Robbing Peter to pay Paul isn't sustainable [1], but that's what social security is. Social security is not a guaranteed solution. If we have to raise taxes or collect additional taxes, that…

We're not in disagreement, I'm a reluctant participant for the common good. Part of my point was, the sky was falling 40 years ago for those who blamed the previous generation and protested paying in. And the SSA is still viable today and keeping those 'boomers' off the streets. It could fail tomorrow, and it's going to take policy makers with a backbone to keep it up, but that's what we have today, as a functioning society that takes care of their elderly and infirmed. Mostly. Considering what travesties private healthcare, prisons and pension funds have gotten us, I tend to doubt an 'open market' solution is more sustainable to what we have.

IANAEconomist.

Re: Americans Are Putting Billions More Than Usual in Their 401(k)s

#466

Post by rebootthesystem »

mywittyname wrote: post #386
greedo wrote: post #310

Earlier quoted context omitted.

If you use Medicaid, you're expected to first deplete almost all of your financial resources to pay. It's not unusual to even have your home become an asset that will be eventually taken by the government.

I'm actually quite aware of this (my partner used to do nursing home placements). But if you're going into a nursing home, the implication is that you will never need those assets again. While I don't agree with this process, it's difficult to argue it is without merit. I suppose if survivors wanted to inherit those assets, they could take on the care of their elderly family members. It's also worth noting that, in m…

The point is that people on Medicaid don't really have health insurance. They have a line of credit with the government. They are accumulating debt. In most -not all- states the law requires the state to collect on the debt. Again, by law. They can and do place liens on your property, etc.

This is very, very far removed from the idea of health insurance. Your property becomes the property of the government. With real health insurance nobody places a lien on your home for medical services rendered.

Re: Americans Are Putting Billions More Than Usual in Their 401(k)s

#467

Post by rebootthesystem »

mywittyname wrote: post #291
rebootthesystem wrote: post #263

Earlier quoted context omitted.

Yes. I wish more people understood this. The other one nobody seems to want to talk about or understand is Medicaid. People think they are getting health insurance (or whatever they want to call it) when, in reality, they are accumulating debt with the government and a debt most states are required, by law, to collect. This is one of the huge problems (outside of costs and lies) I have with Obamacare. The claim is th…

I'm not sure why you're saying that using Medicaid is equivalent to accumulating debt with the Federal government. Medicaid is health insurance. It's true that Medicaid will seek reimbursement for procedures that should not have been covered, but that's not different much different than what happens when a private insurance company refuses to pay a benefit. The hospital is free to pursue the person directly for the b…

> I'm not sure why you're saying that using Medicaid is equivalent to accumulating debt with the Federal government. Medicaid is health insurance.

Please read the info in the link I provided. It's from the Medicaid website itself so no bias or fabrication at all.

Medicaid is not health insurance. It provides access to health services but the patient is on the hook for the cost of those services. In certain states things are a bit different. With some 64 million people enrolled in Medicaid it is probably safe to say that tens of millions of people are accumulating debt with the government.

My point of contention is that almost nobody knows this because it is swept under the rug for the political gains afforded by saying that millions more have "health insurance" when, in fact, they don't.

It also really bothers me that a good number of those in the program are poor and probably not very educated and don't realize they are signing over their estate to the government.

This really bugs me. We need to provide health services to those who cannot afford the cost and we need to do so without making an underhanded grab for what little they may possess.

This, to me, is nothing less than fraud. A private enterprise would be destroyed by lawsuits and people would end-up in jail if they had such provisions in their contracts and they were not fully disclosed ad-nauseum as a condition for entering into that contract.

Not sure why we accept this from government other than, per my findings, almost nobody knows how Medicaid actually works.

Re: Americans Are Putting Billions More Than Usual in Their 401(k)s

#468

Post by smokeyj »

anigbrowl wrote: post #407
smokeyj wrote: post #367

Earlier quoted context omitted.

> they're active and loud. So now our livelihood has resorted to a shouting match? Thanks but no thanks. Voting is like praying, where if you pray with all your passion then god might listen. But there's also the saying pray for what you want, work for what you need.

Yes, but this is what's actually happened. The active and loud people kept pushing to the point that they now enjoy huge political power and get to do what they want for the next while, regardless of how it impacts you. Your not wanting to participate in this understandable but if you don't then you have no guarantee of retaining what you have worked for anyway.

There is no guarantee either way. The safest guarantee are the resources under your control - given the government doesn't confiscate your savings account, which I wouldn't rule out.

People wonder why bitcoin is rising. It's because their competition is total crap. Government issued security is no security at all.

Re: Americans Are Putting Billions More Than Usual in Their 401(k)s

#469

Post by iamnothere »

linkregister wrote: post #426
iamnothere wrote: post #341

Earlier quoted context omitted.

The factors you outlined are definitely a part of the equation, but I'd argue that the US role in geopolitics post-WWII has had a much larger role in its success. First, Bretton Woods established a system that heavily favored US interests -- it was based on dollars and gold, and the US had most of the gold supply. The US was able to achieve this favorable position thanks to its place as the major merchant-state, lend…

You've taken some factoids from history and attached some simplistic "just so" explanations for events. The U.S. has egregious acts in its history but it's inaccurate to presume that its success is solely due to plundering the world economy. Do remember that European, African, Asian, Oceanic, and Latin American countries experienced a massive improvement in their economies post-war; how could that happen if they were…

I think you've read my post as more harsh than it is.

I don't necessarily see the US's actions in the late 20th century as predatory, per se -- in fact, they were very likely a logical response to the cutthroat political situation of the time. With perspective, we now understand more intuitively that the global economy is not a zero-sum game. It's not clear to me that this was the perception in the postwar period, especially since the USSR was seen by many as an existential threat to freedom.

1. I disagree that the agreement was a negative for the US in the long term. Bretton Woods actually led to a trade surplus in the short term, putting the US on a solid footing for international investment and foreign military deployments. During this time US trade relationships and influence were firmly established. In the longer term the financial situation changed, which is why the US decided to leave the agreement.

2. Partially true; this situation was due to the success of Bretton Woods in establishing the dollar as a worldwide reserve currency. However, the other side of this is that OPEC nations had a huge surplus and needed a way to invest their earnings. The US established a relationship with them encouraging huge purchases of US treasuries (often without public awareness) in exchange for military aid. See this article for more info: https://www.bloomberg.com/news/features/2016-05-30/the-untol...

3. I was just stating that this was an added factor. It certainly didn't drive the entire economy.

4. This ignores the effect of US operations (such as the "Star Wars" defense) that were almost entirely for show, as well as an increasingly erratic and aggressive US military posture. The effect of this was to drive the Soviets to "spend themselves to death," which they certainly did. Again, I also agree that Soviet mismanagement was certainly a factor.

5. It began before the Internet, but only really took off once technology made international communication easier. Otherwise I agree with you here. (The post-Soviet era certainly looked more secure for investment though.)

Re: Americans Are Putting Billions More Than Usual in Their 401(k)s

#470

Post by [deleted] »

linkregister wrote: post #426
iamnothere wrote: post #341

Earlier quoted context omitted.

The factors you outlined are definitely a part of the equation, but I'd argue that the US role in geopolitics post-WWII has had a much larger role in its success. First, Bretton Woods established a system that heavily favored US interests -- it was based on dollars and gold, and the US had most of the gold supply. The US was able to achieve this favorable position thanks to its place as the major merchant-state, lend…

You've taken some factoids from history and attached some simplistic "just so" explanations for events. The U.S. has egregious acts in its history but it's inaccurate to presume that its success is solely due to plundering the world economy. Do remember that European, African, Asian, Oceanic, and Latin American countries experienced a massive improvement in their economies post-war; how could that happen if they were…

[deleted]
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