A simple reason why Bush's SS plan is stupid

[Kidlicious]

Originally posted by pchang

http://flagship3.vanguard.com/VGApp/hnw/FundsSnapshot?FundId=0085&FundIntExt=INT

VTSMX from Vanguard

10.5% annualized total return since inception

Read the website and find out that it's moderate to moderate-high risk.

[pchang]

Originally posted by Kidicious


Read the website and find out that it's moderate to moderate-high risk.

Read more closely and you will see it matches the entire stock market (Wilshire 5000 index). It is moderate to moderate high risk because the stock market itself is rated as moderate to moderate high risk.

[Kidlicious]

Originally posted by pchang


Read more closely and you will see it matches the entire stock market (Wilshire 5000 index). It is moderate to moderate high risk because the stock market itself is rated as moderate to moderate high risk.

Duh.

[Sava]

Oerdin

[DanS]

But in the old plan, I will see SS, in Bush's, I may not.

And this is bad... why?

[Tuberski]

Originally posted by DanS


And this is bad... why?

Well gee, I don't know.

Maybe because I've been paying into it for 20 years already?

I deserve to have it when I retire?

I'd rather know I'm going to have it, than hope I'm going to have.

ACK!

[chequita guevara]

Originally posted by Tuberski
On average non-whites do die earlier:
about 5 years earlier.

And what you missed from the earlier part of the thread is that an very high number of minority males die young, which brings down the total average. Homocide is the number one cause of death for youn African American males. Infant deaths are also higher, so it pulls the whole group down.

A better study would only look at people who make it past 40.

[JimmyCracksCorn]

Originally posted by Ned


I could accept this. However, I have heard differently in that blacks as a whole do not live long enough to take advantage of SS.

Ned, African American mortality statistics are skewed because of such high rates of death among young (usually urban) blacks who die from un-natural causes. But if you exclude those deaths, blacks actually live longer than whites on average.

Don't ask me to cite that, but I'm 90% positive its true.

Edit: Didn't realize there was a last page. This has already been said.

[DanS]

Well gee, I don't know.

Maybe because I've been paying into it for 20 years already?

I deserve to have it when I retire?

I'd rather know I'm going to have it, than hope I'm going to have.

(1) You will be compensated according to your contributions no matter the system we have.

(2) If you would prefer to invest 100% of your non-SS retirement fund in a riskless asset, such as government bonds, you would be able to do so. I think you're clinically insane for doing so, but different people have different risk preferences, and who am I to judge.

(3) If you wish to stay in SS entirely, you can do so. I would prefer that increasingly few people choose SS, but nobody's going to force you out of the system if your heart is set on it.

[Ned]

Well, all this proves is that statistics lie.

[Drake Tungsten]

Out of the frying pan, into the fire, as long as it's change it's good?

In this case, yes. Moving to a system that may be worse while opening up opportunities for reform is much better than sticking with a system we know is bad and is almost impossible to reform.

My respect for you diminishes daily.

The feeling is mutual.

[Drake Tungsten]

The battle-cry of the Bush supporter!!

I'm not a Bush supporter in this case, really. I'm a supporter of Social Security reform and sadly Bush is the only one who has made a major push for it in decades. Who knows when we'll see another attempt if this fails?

[Cruddy]

Originally posted by Drake Tungsten

The battle-cry of the Bush supporter!!

I'm not a Bush supporter in this case, really. I'm a supporter of Social Security reform and sadly Bush is the only one who has made a major push for it in decades. Who knows when we'll see another attempt if this fails?

I thought Clinton scrapped most of the Social Security system to pay off the national deficit? Sounds like a reform to me.

[Drake Tungsten]

[Bosh]

Originally posted by DanS
What Boshko is missing is that the obligation (i.e., debt) is the same under both scenarios (current v. Bush proposal). The only difference between the two is that the debt in the current system is implied by what has been promised by the government, while Bush's plan makes the debt explicit and runs it through the bond market.

Now you might say that the promises of the government aren't even good enough to wipe your bottomside with and therefore it isn't "debt." But if you start saying that, then I would suggest that you seriously examine the magnitude of the shaftitude for yourself once your turn comes around to retire.

There are no free lunches.

Ah good, FINALLY someone answers my original post. But under the current system the government is basically promising people who pay into the system that they're going to get SS eventually but the government doesn't have to find buyers to cover these promises and doesn't have to pay interest. To cover the private accounts, Bush will have to print a ****-load of bonds and find buyers and pay them interest. Since the whole basic premise of Bush's plan is that stocks are better investments than bonds, who the hell is going to buy all those bonds (at current interest rates)?