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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

#41

Post by nosianu »

drivebyhooting wrote: post #24
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.

Except for the part where citizens get low returns and are forced to work their whole lives accruing minimal benefit. How is being a serf win win?

Unless we scale back our lives significantly, and are fine with a lot less stuff and vacations and devices and modernized living (houses and transit today are vastly more complex systems than a few decades ago), there simply is no way to let a large number of people live like rich people.

I grew up in East Germany, and while it was a total failure, they got at least one idea correct in the workers paradise: We need to work. (Never mind the implementation, I already said it was a total failure, okay? It's about problem recognition, not about the quality of the solution.)

And you know what? I'm actually like my grandfather, who without any need whatsoever continued to work well past retirement, privately, painting a house here, doing some paint shop there, designing and installing a sun dial somewhere. He only got off the scaffolding on a house's paint job a week before he died.

I too would hate to just laze around. I LOVE doing useful stuff. I worked and made money many times as a child already, and it was always fun!

What stopped the fun was the coming of The West (which I too went to the streets for and wanted, still, "side effects may apply"). While I studied CS I took a job in a chocolate factory, not because I needed the money, but because that's what I always did and was used to. Being in the production of stuff is actually FUN! Except then came some western management idiot to make it clear fun is over. I had just setup a machine to work as efficiently and as well as possible (because that's fun!), so now I had to wait a few minutes for it to finish. Just a few minutes, no time to start something else. So I briefly sat next to it and waited for it to finish. In comes the management idiot, immediately jumping on me, why am I lazing around??? That's not what they pay me for!

Just an anecdote, and of course it is much better in knowledge jobs, but that, and the fact that the money accumulates towards the top is what I think is a HUGE problem in today's capitalism. No wonder they have to make live as miserable as possible for the working majority, because there is no fun. The managers and owners think we don't want to work, and treat us accordingly. But it is THEM who are responsible for much of that.

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

#42

Post by foxyv »

paxys wrote: post #29
foxyv wrote: post #23

Earlier quoted context omitted.

Why does the government get to decide when we retire?

You can retire whenever you want. The government decides when to start funding it. As for why - the same reason why they get to decide what side of the road you drive on and what laws you follow. They rule the patch of land you were born on, and if you don't like it you can either participate in the system (assuming it's a democracy) or leave.

This boils down to a "Might makes right" claim. It doesn't answer the question why. Only how.

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

#43

Post by spyckie2 »

drivebyhooting wrote: post #24
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.

Except for the part where citizens get low returns and are forced to work their whole lives accruing minimal benefit. How is being a serf win win?

You mean the US, right? Especially with the part 2?

I know this may sound like a shock because you are privileged but 7% yoy return on capital is NOT the norm for the rest of the world. Just look at any other index not called the S&P or the Dow. Look up US exceptionalism.

The US policy for retirement savings shackles the younger generation with a ticking time bomb. Forcing your own citizens to save money for themselves is a lot better than forcing your own citizens to pay for others. Which one is more morally cruel?

HK has a similar forced savings, but that ROI is like 1 or 2% and the options to invest are paltry.

Some perspective is necessary. Yes it’s not great but compared to the rest of the world it’s stellar.

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

#44

Post by ww520 »

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 not a win win policy. The citizens lose massive amount of their money to government on the bond yield delta. It preys on people not knowing the effect of long term compound interest.

Edit: in fact interest delta is how banks make their huge profits except the government here does it by force.

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

#45

Post by bombcar »

bluGill wrote: post #22

You know who they didn't interview: those who regret saving so much. Many of those people are dead and so the regret is something we can only apply on assumption that they would. I've known a few people who unexpectedly died before they hit retirement age. I've know a few people who retired and died suddenly. The vast majority of people in a "first world" country have an expected lifespan of about 80 - but there is a…

This is more fleshed out in the book "Die with Zero" which may be a bit too extreme.

But in general you have three things to spend in your life: time, money, and effort.

You don't want to spend all your time saving money because you'll run out of time eventually, but you also don't want to spend all your money saving time because you'll run out of money.

It's all about balance and thoughtfully understanding what you actually want and how to get it.

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

#46

Post by throw-the-towel »

bluGill wrote: post #22

You know who they didn't interview: those who regret saving so much. Many of those people are dead and so the regret is something we can only apply on assumption that they would. I've known a few people who unexpectedly died before they hit retirement age. I've know a few people who retired and died suddenly. The vast majority of people in a "first world" country have an expected lifespan of about 80 - but there is a…

As someone who used to save too much, I agree.

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

#47

Post by delta_p_delta_x »

drivebyhooting wrote: post #24
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.

Except for the part where citizens get low returns and are forced to work their whole lives accruing minimal benefit. How is being a serf win win?

Singapore is one of the last countries one will be a 'serf' in.

The parent contributor has conveniently left out the fact that the 37% of CPF contributions is split 20-17 in terms of employee-employer contributions[1], and has a ceiling of S$8000[2], so if one earns more than that, every additional dollar goes entirely to them, which is also taxed at globally low income tax rates[3]. One can put all one's post-tax money into any stocks/bonds/funds, and there is also no capital gains tax[4].

[1]: https://www.cpf.gov.sg/employer/employer-obligations/how-muc...

[2]: https://www.cpf.gov.sg/employer/infohub/news/cpf-related-ann...

[3]: https://www.iras.gov.sg/taxes/individual-income-tax/basics-o...

[4]: https://www.iras.gov.sg/taxes/individual-income-tax/basics-o...

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

#48

Post by paxys »

foxyv wrote: post #42
paxys wrote: post #29

Earlier quoted context omitted.

You can retire whenever you want. The government decides when to start funding it. As for why - the same reason why they get to decide what side of the road you drive on and what laws you follow. They rule the patch of land you were born on, and if you don't like it you can either participate in the system (assuming it's a democracy) or leave.

This boils down to a "Might makes right" claim. It doesn't answer the question why. Only how.

What question do you want answered exactly? Why we have governments and not anarchy?

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

#49

Post by kaibee »

Noumenon72 wrote: post #32

"Saving regret" ought to also refer to when you have saved too much. The shocks in that case would be things like "inflation ate away all my savings before I got to use them" or "the government confiscated my savings via wealth taxes" or just generally "the government made me spend 37% of my income on saving when I wanted to use it to raise kids."

> "the government made me spend 37% of my income on saving when I wanted to use it to raise kids."

This is a particularly funny one tbh. A nation's kids _are_ the retirement plan. It doesn't matter how many numbers you put in spreadsheets dated for 20-40 years into the future, if in said future, there isn't actually anyone to accept those numbers in exchange for labor.

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

#50

Post by InkCanon »

3rodents wrote: post #38
drivebyhooting wrote: post #24

Earlier quoted context omitted.

Except for the part where citizens get low returns and are forced to work their whole lives accruing minimal benefit. How is being a serf win win?

I can’t speak for Singaporeans and every government has their detractors but the Singaporeans I’ve known loved their system and hated the western systems they were exposed to. They would laugh if you tried to describe their life as serfdom when compared to a life in the U.S. or Europe.

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, houses have huge financial/investment value to Singaporeans. Despite the iron mathematical law that these houses must depreciate their lease value, most Singaporeans believe house prices will continue to rise based on historical trends. The math just doesn't work out.
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