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Investing/Strategies / Retirement Investing
|Subject: Re: Don't worry about boomers killing the market||Date: 8/2/2006 8:40 PM|
|Author: OldOne||Number: 52915 of 78030|
I think there is blame attributable to the government. Social security taxes have not been treated as an investment pool, rather as a source of flexible funds to prop up government spending with the assumption those funds can be paid back at some time in the future. Second, unwarranted, idealogically driven tax cuts exacerbate the problem. Remember the promise of the lock box?
What would the situation with social security be had the money been invested in a responsible way, say using the same kinds of strategy a large insurance company might use? What if the surplus at the end of the Clinton administration had been invested instead of squandered with the combination of tax cutting and runaway spending? I suspect the picture could be quite different.
The only plan I have ever heard to invest SS funds "in a responsible way" was the Bush private accounts plan. Investing SS funds in any kind of US government bond or obligation is nothing but financial voodoo. The government can not owe itself money, any more than your left pocket can owe your right pocket money. Essentially, the only responsible investment is in either the private sector, or in securities of other governments. (Let the French and Germans pay taxes to fund our retirrements.) At least GW Bush got the investing in the private sector right -- I doubt that investing in foreign government debt is ever going to politically palatible in this country. But, leftists, the very same one who supposedly generated the Clinton surplus, blocked sensible reform.
Secondly, I do not believe that we have had "unwarranted, idealogically driven tax cuts". The only people who believe this are those who use "static scoring" when analyzing tax cuts. "Dynamic scoring" is much more accurate and shows what we have seen in reality -- tax cuts lead to greater economic activity, which more than offsets the tax cut, leading to higher tax revenue.
"What if the surplus at the end of the Clinton administration had been invested..." My feeling is that the surplus was not "squandered", it was soaked up by the war on terror, which we did not start, but must pursue unless we wish to live under islamic domination. Even if I could get $250 k per year in SS, I would not want my children to live in a muslim country. The tax cuts have actually increased government revenue and have been a net positive.
But, government action of any sort is not the answer, and Social Security is not going to save us from a meager retirement. Even without the problems with SS, living on SS alone is not going to produce anything greater than a miserable existence in retirement. I have no intention of living solely on SS.
Since SS has not been cut, and there is little sign of it being cut in the near future, I do not see how the goverment can possibly be to blame for something which has not happened.
As I said, the warning signs have been there for 40 years. Even the SS Administration explicitly says that retirees will need pensions and savings to retire comfortably.
No, the fault lies squarely with the people who knew that the SS administration was telling them that they needed savings, but did not save.
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