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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

#71

Post by philwelch »

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 social security trust fund, which invests them in federal bonds.

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

#72

Post by zozbot234 »

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…

> If they want to run an MRT line under your house, and they need to tear your house down to get to it, they will force you to sell your house and your land to them.

Eminent domain exists in the U.S. and other developed countries too. The point of it is largely to prevent any single owner from "holding up" a non-trivial project like an MRT line.

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

#74

Post by philwelch »

zozbot234 wrote: post #60
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.

> It covers a major individual cost and need (retirement, medical, housing) instead of just throwing it into a tax. Forced saving makes it a tax. It's essentially no different than payroll taxes in the U.S. that fund Social Security. Buying government bonds is still marginally better accounting than a complete Ponzi scam like Social Security in the U.S., but even that ultimately amounts to the same thing - the govern…

The social security trust fund does buy government bonds.

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

#75

Post by mothballed »

jonahx wrote: post #62
foxyv wrote: post #42

Earlier quoted context omitted.

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

It definitely answers why. You are asking for an appeal to some moral justification. But there isn't one, and it doesn't matter. That's the whole point of "might makes right".

CPF makes a moral justification by arguing it is a "savings and pension plan" under the auspices of a moral justification of helping citizens set aside their own money. The very first thing you are greeted with on their website is that it's savings and an overview represents it as "setting aside" your own funds.

The government makes a moral justification of a savings plan but then when we dig down to it it's all ether and really just a scheme for bond rate arbitrage for the government.

The point isn't that might makes right is false, it's that the moral justification is a facade.

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

#76

Post by Sytten »

Forced savings like done in Quebec, Canada is likely the best model for most people even though I dont like it as an individual that knows how to manage its portfolio. It also has the benefit of creating a sovereign wealth fund that can invest locally and be an economic driver but independent from the government.

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

#77

Post by gruez »

delta_p_delta_x wrote: post #47
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?

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 mo…

>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]

This point is a shell game, because the employer's share is still effectively being taken from the employee. It's equivalent of "tariffs are paid by foreigners!" that's trotted out for supporting tariffs.

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

#78

Post by yoyohello13 »

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…

> Once the above is taken care of though, you can't take it with you (at least in most religions) so spend it. Save enough, but not too much.

I get it to a certain extent, don't live in poverty if you don't have too, but I am a major saver. I rarely buy new things if an old thing is working fine. If I die early at least my family will will be set.

Really the social safety nets in the US are basically non-existent so having a big savings buffer makes me feel a bit safer. Honestly dying early doesn't worry me too much, I'll be dead so doesn't bother me. What does worry me is the economy tanks and all my saving become worthless. Then I would have some regrets...

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

#79

Post by zozbot234 »

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…

Payroll taxes actually pay for current Social Security benefits, the trust fund was tacked on with separate government funding in order to make it a bit less of a complete Ponzi scheme.

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

#80

Post by drivebyhooting »

spyckie2 wrote: post #43
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?

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 themselv…

If ROI is lower than inflation then what’s the point of saving? So you can have an even worse standard of living after you retire?

Forced investment in low ROI vehicles is just a tax by another name.

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