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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

#361

Post by refurb »

delta_p_delta_x wrote: post #282
everforward wrote: post #204

Earlier quoted context omitted.

Sort of. So far as I can tell, you can withdraw to buy housing but I don’t think you can pay rent out of it. The loans are also 75% max loan-to-value so I think until you can get 25% of the purchase price in your account you have to pay CPF and rent (or live with family). Also, not an economist, but I suspect the forced savings has a wildly inflationary effect on housing prices. You can’t do much else with the money…

> the forced savings has a wildly inflationary effect on housing prices Housing prices are inflationary independent of CPF, because flats in Singapore are powerful investment vehicles. For HDB flats, however, there is means-testing and rebates to the amount of ~50%, sufficient for anyone on the 30th percentile and above to afford.

Since the government controls the supplies of HDBs, it controls the price inflation.

So it would be more accurate to say “housing prices are inflationary because the government wants them to be”.

Yet this introduces a ton of new problems as well. In order to keep them “good investments” it becomes ever increasing prices with ever increasing rebates to help lower income afford them.

But eventually prices will stop going up.

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

#362

Post by mathgladiator »

raw_anon_1111 wrote: post #360
mathgladiator wrote: post #339

Earlier quoted context omitted.

I pay cash for everything right now since ACA plans are terrible... BUT, I am also one of those nut jobs that only eats meat and it is amazing. But, most people can't even begin to imagine giving up carbs as they are junkies.

Are you willing to bet that nothing catastrophic will happen to your health before you are 65?

Yes. I will not let fear rule my life.

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

#363

Post by exidy »

mothballed wrote: post #4

Singapore has a regressive shock absorber model where something like half the country are immigrants that are ineligible for, say, public housing which even the better off citizens take advantage of in Singapore (maybe even disproportionately so since there can be a long wait to get in, you are older and more settled at that point). Immigrants that get milked dry and go broke and jobless during a shock are booted fro…

> Singapore has a regressive shock absorber model where something like half the country are immigrants that are ineligible for, say, public housing

Singapore has about 1.5 million foreign workers[0] of the population of 6.1 million or just under 25%. Of that 1.5 million, 75% are WP holders who pay no tax and have housing provided as a condition of their employment. Why would you expect social housing to be provided for them?

Only about 5-6% of the population are on EPs and SPs. They are definitely vulnerable during a downturn, but they are professionals and they know the rules coming in. At least while they're here they enjoy low tax rates and don't have to contribute to CPF. If they fell into the expat trap of living the high life and didn't save, that's on them.

[0] https://www.mom.gov.sg/foreign-workforce-numbers

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

#364

Post by djtango »

ggm wrote: post #238
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…

Like Dubai, many of the migrant workers are ineligible for post retirement life in Singapore and so despite any mandatory savings will not represent any kind of burden on the state compared to delivery of health and housing and care costs. So they are functionally productive and net positive to any scheme about post work funding for the community.

You don't pay CPF unless you have Permanent Residence/Citizenship so there isn't any mandatory saving for migrant workers (both low income unskilled and high income skilled labour) AFAIK?

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

#365

Post by eru »

SV_BubbleTime wrote: post #270
FredFS456 wrote: post #248

Earlier quoted context omitted.

I agree with you that the migrant workers are effectively a serf class. However, I think it's fine that the SG government severely discourages owning a car. It's a small island with lots of people, there would be gridlock if everyone wanted their own car. The public transportation system is amazing and works well.

I promise you do not need to explain scarcity to me :) the issue is that the disparity between I can’t afford a car, and I will never be able to afford a car is vast. The slave class exist to do nothing but serve (be on the street at 2300, it’s poor people running power washers everywhere you go). The entire country runs on Chinese goods in shipping containers going to the US. It’s a tax state. Don’t get me wrong, un…

> The entire country runs on Chinese goods in shipping containers going to the US. It’s a tax state.

If that's true: tell me, why do people in the US or China pay for an expensive transit in Singapore?

> (be on the street at 2300, it’s poor people running power washers everywhere you go).

What?

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

#366

Post by eru »

TheAlchemist wrote: post #262
SV_BubbleTime wrote: post #237

Earlier quoted context omitted.

I worked with a guy from sg. He gave me tips for when I went to visit. He hooked me up with a family member that showed me the backend a bit. The country effectively runs on a slave class. You must drive a new vehicle under 5 years old, and the license just to buy a car was $90,000 or so. This means an entire class of people that will be taking the bus to do your laundry and clean your house for the rest of their liv…

Exactly this. The country's progress and management is extremely good, however it's enabled mostly by exploitation of migrant workers and various kind of white collar crimes (ie, facilitating business for illegal or sanctionned entities - cf Nvidia chips for China for example)

What's exploitation?

I guess you prefer poor people stay in their poor countries where you don't have to look at them? Allowing migrant workers is a win-win arrangement, and I wish we'd do more of that.

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

#368

Post by eru »

malshe wrote: post #321
eru wrote: post #312

Earlier quoted context omitted.

Boring is good for business.

I agree. Predictability is underrated.

It's underrated in popular discourse. Businesses are extremely aware of it. Hence their love for Switzerland, Singapore, the Netherlands, or even the US which despite political drama has a fairly predictable business environment (especially in regards to lots of precedents for legal cases).

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

#369

Post by raw_anon_1111 »

mathgladiator wrote: post #362
raw_anon_1111 wrote: post #360

Earlier quoted context omitted.

Are you willing to bet that nothing catastrophic will happen to your health before you are 65?

Yes. I will not let fear rule my life.

That’s monumentally not a good idea

https://www.cdc.gov/chronic-disease/about/index.html

90% of adults will have a chronic condition by the time they are 65.

https://www.aarp.org/health/conditions-treatments/most-commo...

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

#370

Post by salesynerd »

janpeuker wrote: post #269
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…

I think it's also relevant that CPF is not only a pension schema but most importantly also a home ownership scheme via HDB OA https://www.cpf.gov.sg/member/home-ownership/using-your-cpf-...

The "gotcha" here is that the home is, legally and technically, on a 99-year lease from the government. So, the government is free to take it back once the lease expires. This happened a couple of years back with an old enclave - the "owners" had to vacate their units as their lease had expired and the government needed the land for developmental purposes.

In fact, this had become a hot button issue in the elections. All this while, and even today the government claims that the people are the owner considering they can sell the units and book profits. On the other hand, they justify the 99-year limit, as a step to being fair towards future generations in a land scarce country.

There have been many policy and public discussions around this topic. But, as of date, there is no firm or permanent solution to this conundrum.

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