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America vs. Singapore: You can't save your way out of economic shocks

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Re: America vs. Singapore: You can't save your way out of economic shocks

#111

Post by danans »

everforward wrote: post #57
ecshafer wrote: post #20

Earlier quoted context omitted.

The CPF sounds pretty clever. It covers a major individual cost and need (retirement, medical, housing) instead of just throwing it into a tax. It makes the government money. This sounds like a win win kind of policy.

To me it sounds like a tax structured in a strange way so it doesn't obviously read as a tax. It's essentially a forced loan to the government at subpar rates. The "tax" is the delta between what the government pays out for the bonds vs what a bond of equivalent risk in the free market would have paid. The magnitude of the investment also probably makes it impractical for anyone but the very wealthy to retire before…

> The "tax" is the delta between what the government pays out for the bonds vs what a bond of equivalent risk in the free market would have paid.

It also robs the individual's freedom to gamble with their retirement funds while expecting/demanding a bailout when shit hits the fan.

In the USA we have thoughtful policies that allow people over a certain amount of wealth invested in key industries to do that.

Re: America vs. Singapore: You can't save your way out of economic shocks

#112

Post by philwelch »

foxyv wrote: post #105
philwelch wrote: post #81

Earlier quoted context omitted.

The government doesn’t set the retirement age. You can retire whenever you want. There are no laws against a 50 year old retiring and living off his own savings, nor against a 70 year old continuing to work. There is a minimum age to collect old age benefits from the government. The justification for that should be obvious.

The choice between working and starving to death is not a choice. If your savings have been taken by the government, then you don't have a choice. The justification is to force people to work until they are too old to do so. Then steal whatever they have left with medical bills and price hikes on necessities.

And if I was emperor, I would abolish payroll taxes and phase out Social Security. Unfortunately, we live in a democracy.

Re: America vs. Singapore: You can't save your way out of economic shocks

#113

Post by u8vov8 »

temp8830 wrote: post #67
paxys wrote: post #40

Earlier quoted context omitted.

The difference is the number. Workers on temporary visas make up ~1% of the labor force in the US. And a large chunk of them will eventually get citizenship or permanent residency and qualify for benefits later in life. Countries like Singapore and all of the Middle East meanwhile rely on a revolving door of cheap immigrant labor. In the extreme cases like Qatar 95% of the working population are on short term visas.…

The US also has a huge pool of undocumented immigrants who don't get any benefits, don't pay into the social security system, and can be paid below minimum wage (because officially they don't exist). Any time this labor supply is threatened, the construction and agriculture industries rise up (and probably sponsor all those massive protests you see in the news).

And undocumented immigrants pay around 25 billion dollars annually into social security

Re: America vs. Singapore: You can't save your way out of economic shocks

#114

Post by paulddraper »

ecshafer wrote: post #20
InkCanon wrote: post #12

Singapore's economic policies are complicated and often misdirecting. I'll break down the misconceptions. The primary purpose of CPF is not a pension scheme. It is structured as a massive forced bond purchase scheme by citizens. Financially what happens is the 37% of citizen income buys a long term bond (till retirement age, on average decades) at rock bottom interest rates (it's pegged to the overnight rate or a min…

The CPF sounds pretty clever. It covers a major individual cost and need (retirement, medical, housing) instead of just throwing it into a tax. It makes the government money. This sounds like a win win kind of policy.

It’s analogous to the US, where you put money into social security and then withdraw later.

The only question is whether the fund is running at a surplus or not.

The US has raided its fund to finance other government programs, and then will have to pay it back via tax revenues.

Re: America vs. Singapore: You can't save your way out of economic shocks

#115

Post by glimshe »

raw_anon_1111 wrote: post #84
everforward wrote: post #57

Earlier quoted context omitted.

To me it sounds like a tax structured in a strange way so it doesn't obviously read as a tax. It's essentially a forced loan to the government at subpar rates. The "tax" is the delta between what the government pays out for the bonds vs what a bond of equivalent risk in the free market would have paid. The magnitude of the investment also probably makes it impractical for anyone but the very wealthy to retire before…

It’s almost impossible for an upper middle class couple to retire in the US before their 65 unless they have some type of government provided or private company provided health insurance like teachers, police officers, military etc. It’s about $25K a year for a decent plan which is doable. But you have to hope that Republicans - and yes this is a political issue - don’t successfully kill the ACA and make it impossibl…

The FIRE community and my own personal situation prove you very, very wrong. It's absolutely possible for a upper middle class family to retire in their 50s, even in their 40s, if they live frugally.

Re: America vs. Singapore: You can't save your way out of economic shocks

#116

Post by InkCanon »

delta_p_delta_x wrote: post #64
InkCanon wrote: post #50

Earlier quoted context omitted.

I'll be blunt and say most Singaporeans have a very poor idea of how these policies work. Another major one - virtually all Singaporeans believe they own their houses, and it is a point of pride and financial security. Most houses are on 99 year leases, but the idea that is deeply lodged is that this is longer than you can live so this is inconsequential. While this is true if they only cared about living in it, hous…

I think Singaporeans have a decent idea, and given their quality of lives, they have no problems with the trade-offs. If they do, they leave. And many go back, because the trade-offs in the West are even worse. > Despite the iron mathematical law that these houses must depreciate their lease value SERS means that houses slated to be torn down are resold back to the government at near-market rates excluding the effect…

I think whether houses should be sold on a 99 year lease vs property is a large and separate question. The vast misunderstanding of it still remains - the idea that a house is owned, not rented. Selective properties might be bought back. But the fundamental invariant of this whole situation is that all 99 year leases will worth 0 eventually. Any rise in prices now only increases the eventual depreciation. And add on that massive loans are taken out on depreciating assets, so it's not an investment, it's a liability. And the significant majority of Singaporeans bears this liability on their books.

Re: America vs. Singapore: You can't save your way out of economic shocks

#117

Post by bubblewand »

arolihas wrote: post #98
danny_codes wrote: post #27

Earlier quoted context omitted.

And yet that GINI keeps rising and cost of living outpaces inflation over the past 40 years in housing, healthcare, and education. If you are bottom quintile, maybe bottom 2, you are poorer now than 40 years ago on average. Recent policy changes seek to drop the third quintile as well. America is designed for rich people

The bottom quintile gets everything handed to them and it's still not enough. We all live at the mercy of them and their dysfunction.

Seeing an actual "Lucky Ducky!" in the wild is always a trip.

Re: America vs. Singapore: You can't save your way out of economic shocks

#118

Post by InkCanon »

philwelch wrote: post #71
InkCanon wrote: post #12

Singapore's economic policies are complicated and often misdirecting. I'll break down the misconceptions. The primary purpose of CPF is not a pension scheme. It is structured as a massive forced bond purchase scheme by citizens. Financially what happens is the 37% of citizen income buys a long term bond (till retirement age, on average decades) at rock bottom interest rates (it's pegged to the overnight rate or a min…

> The primary purpose of CPF is not a pension scheme. It is structured as a massive forced bond purchase scheme by citizens. Financially what happens is the 37% of citizen income buys a long term bond (till retirement age, on average decades) at rock bottom interest rates (it's pegged to the overnight rate or a minimum of 2.6%). Social Security is effectively the same thing. Payroll taxes are collected and placed in…

The main difference is SS bonds are bought at market rates. CPF bonds are not.

Re: America vs. Singapore: You can't save your way out of economic shocks

#119

Post by paulddraper »

atomicnumber3 wrote: post #103
throwway120385 wrote: post #89

Earlier quoted context omitted.

The other way to avoid a pre-existing condition is to just avoid medical care entirely.

Ah yes, the 4chan retirement plan. Die of a preventable cause at age 42 while waiting for your captcha.

If you accept that cancer is a death sentence, it’s not absurd to “self fund” your insurance with a nest egg.

You can shop around quite a bit for non urgent care, and get good cash discount.

Re: America vs. Singapore: You can't save your way out of economic shocks

#120

Post by sam1714 »

foxyv wrote: post #51
ecshafer wrote: post #36

Earlier quoted context omitted.

The government decides when we can retire and they help us out. You can stop working today if you want, Government shouldn't pay you for it for no reason. Your duty as a citizen is to work and build your nation, eventually the government pays back that service with benefits.

This isn't something the government gives you. It is something they have confiscated and held on to. > Your duty as a citizen is to work and build your nation What about the duty of the trust fund babies and idle wealthy? What about the duty of the capital owners? Why is the retirement age going up instead of down as productivity increases?

Not for the majority of retirement savings in the US, where Social Security makes up only about 25%.

In the case of 401(k)s/DC plans and private pensions/DB plans, the government allowed savings without "confiscation," i.e. immediate taxation. They gave us the benefit of deferred taxation if you wait until retirement age.

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