Bob Brinker Free Discussion Site 59,820+
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» Normxxx - Re: Social Security
In response to Social Security posted by pawelr:No less than Alan Greenspan has guaranteed that the BB will get their SS. What he carefully did not guarantee, was what it would buy!
But note, he believe that the very same problem will happen even with 'private' accounts, since the problem is a problem of sufficient resources not a problem of where the money comes from! The problem is that there will only be about one worker for each retiree to produce all of societies necessities and luxuries. In the end, it matters not where the money comes from-- it will just support pure consumption.
-- posted by Normxxx
» Kirk - Re: Social Security
.In response to Social Security posted by pawelr:
Welcome to our forum, Pawel
However Baby Boomers dropped the ball and didn't recruit enough participants into the program to pay their retirement benefits. Right now there is some 3 workers per beneficiary and the number is going down to two. When there will be 1 worker per 1 or 2 beneficiaries, the things are liable to get ugly.
You are half right.
The other half of the problem is we need to get people smoking again, eating fatty foods and stop exercising! People now live too long in retirement!
Back when Social Security was set up in 1935, people only lived to age 65 so few collected the benefits. It was mostly an insurance policy to make sure workers didn’t fall into poverty if they managed to live past age 65.
This is a very important aspect we often forget. Social Security was also a way to make more jobs by retiring people older than 65 then having all those with jobs fund their retirement. This made more jobs and I believe helped the economy start to grow again.
A Libertarian like myself can argue that the original Social Security Act was a Ponzi scheme disguised as a new tax and sold as a benefit to get more people working when people were starving. The fear of poverty and starvation was enough to get the middle class to vote for this “protection.”
The money collected has been a farce to fund government spending with IOUs placed in a drawer for someone else to figure out how to pay back. They’ve slowly raised our taxes over time such that we pay about 12% a year of income into a fund that is not invested but spent.
Brinker missed a good opportunity
I heard a bit of the show driving to windsurf so I can’t really say what started this discussion, but a caller took Brinker to task for scolding California for paying too high a pension. The caller tried to get it through Brinker’s head that he was wrong (which is always a dangerous way to end all useful commentary from Brinker). The caller said CALPERS, California Public Employee Pension System, [http://www.calpers.ca.gov/index.jsp?bc=/... ] is a fully funded retirement plan that won’t bankrupt us taxpayers in the future as it is doing to GM, Ford and the airlines. I got the impression from Brinker’s defensive replies that he laid into California voters in the monologue for awarding too much for pensions. I agree with Brinker that we pay too much into worker’s pension funds in CA but that is different than signing up for high pension payments.
I think Brinker really blew an opportunity here. What the caller also missed is how a properly funded pension fund can provide very high retirement incomes. Social Security currently is a fraud set up to take money from workers to fund current government spending. If the funds had been invested in stocks and bonds all these years, and the pension fund excess profits not siphoned off in the 1990’s when the markets had great returns which is what Ford and GM did to artificially increase their earnings, then the Social Security Trust fund would be rich beyond belief.
Here is a good link The History of Social Security
-- posted by Kirk
» bbaddict - Social Security calculator
Here is a Social Security calculator:http://www.purejazz.com/socialsecurity.a...
Well, it is more of an S&P500 calculator which determines what a current retiree would have in their account, if they earned median income all their life and invested in the S&P instead of in Social Security.
The poor return of SS makes it a complete ripoff. Even if the market tanked, the S&P gives much better returns.
A current retiree, who earned the median income, would have $1 million in their retirement account if they were able to invest their SS money in the S&P. Instead, SS keeps them in poverty.
Also, don't forget about the "Critical Mass" calculator:
-- posted by bbaddict
» AL_W - Re: Social Security calculator
In response to Social Security calculator posted by bbaddict:Mr addict....
a few weeks ago, I added up all of the info from my annual Soc Sec report and I totally agree with the amounts.
Once scenario I looked at was as a very conservative 6.5% average T-bill saving rate and a 6.5% withdrawal rate.
This resulted in $60,000/yr compared to the the $20,000 Soc Sec will pay me. So I get 1/3 of the interest and they keep 2/3'rds and the prinicple. What a ripped off.
I hope Bob talks about this every week and gets a ground swell going. Instead of saying AG being foolish/wrong, Bob needs to slam congress about their continuing rip-off/rape of the Soc Sec system. This topic would probably attract more listener too.
-- posted by AL_W
» JIMMY62 - Re: Social Security
In response to Social Security posted by pawelr:Correct me if I'm wrong, but SS is a pyramid program/scheme were I pay benefits of my elders and getting paid by my juniors.
If you were intirely right, there would not be a big balance, you say $1,7 trillion, in the trust fund.
And there is the question of 1.7 trillion dollars of payroll SS tax (SS 'trust' fund) spent away/'invested' by Congress - to be taxed back/again from us later with interest the trust 'pays'. If I wanted to be irresponsibly partisan, I'd advance a reckless theory, like that all this SS trust fund money funded Democrats hold on power for all these decades.
Your theory is reckless. There was very little in the trust fund before the changes during the 1980's. That is why the changes were made. The increased SSI taxes were signed into law by RR after a bi-partisan agreement.
Bob is right about the bigger elephant in the room being medicare. One bite at a time. That is the way to eat one of those.
Talking about it is the first step toward getting a better setup. Bob is helping by talking about it.
All who speak toss in their policy bias. Bob has threathend to quit THE PROGRAM if the cap is raised. Translated: Let someone else pay for the adjustment.
-- posted by JIMMY62
» JIMMY62 - Re: Re: Social Security calculator
In response to Re: Social Security calculator posted by AL_W:This resulted in $60,000/yr compared to the the $20,000 Soc Sec will pay me. So I get 1/3 of the interest and they keep 2/3'rds and the prinicple. What a ripped off.
How much per year is your auto insurance policy going to pay when you retire? Is that amount going to be indexed to inflation like SSI? In other words, the $20,000 initial benefit is not the whole SSI package. Survivor and disability benefits are there too.
I hope Bob talks about this every week and gets a ground swell going. Instead of saying AG being foolish/wrong, Bob needs to slam congress about their continuing rip-off/rape of the Soc Sec system. This topic would probably attract more listener too.
Yes Bob, keep talking. Even though Bob has his bias, he speaks straighter that the elected officials I hear. Example, they keep saying you can spend you account money for retirement and pass it on to you kids, too. Leaving off, it you don't spend it all.
Rip-off/rape. What difference would a lock box make? The published national debt figure would just be bigger. That is just more elected official nonsense speak.
I agree it would attract more listeners.
-- posted by JIMMY62
» Kirk - Guest Annette Thau: The Bond Book
.I listened to Moneytalk yesterday while on a bike ride and was surprised to hear BOb Brinker had a guest on, Annette Thau, to discuss "The Bond Book." I’ve been recommending The Bond Book in my signature for some time. I enjoyed the fresh point of view. Bob needs to work on making his questions a bit shorter so the guest has more time to speak but otherwise, I found it a great improvement to the Moneytalk show format.
My favorite radio talk show host is Pete Wilson on KGO in San Francisco. He often interviews authors of books he is interested in and does great interviews. I’ve often found myself wishing Pete would interview writers of investment related books. If Bob Brinker continues to do interviews, I’ll be quite happy, especially if he polishes his interviewing skills by listening to people like Pete Wilson who is really good at interviews. Since this seems to have been one of Bob’s first in a handful interviews of special guests this past year, I give Bob high marks for an informative interview.
From the Back Cover:
All about Treasuries, munis, bond funds, and more!
The Bond Buyer’s Plain-English Answer Book—Updated for Today’s Fixed Income Marketplace
"The Bond Book does a superb job of explaining simply and clearly what an investor needs to know about bonds. The second edition improves on upon the first by including recent innovations in the bond market, such as the Treasury’s inflation-linked securities, and by discussing the role of the Internet as an investment resource. Investors who are new to the bond market will find this book to be a great guide for how to get started. Seasoned investors will find it to be a handy reference tool."-- Martin J. Mauro, Fixed Income Strategist, Merrill Lynch Private Client Group
-- posted by Kirk
» JIMMY62 - Re: Re: Social Security
In response to Re: Social Security posted by Kirk:If the funds had been invested in stocks and bonds all these years, and the pension fund excess profits not siphoned off in the 1990’s when the markets had great returns which is what Ford and GM did to artificially increase their earnings, then the Social Security Trust fund would be rich beyond belief.
Early in the discussion of SSI changes initiated by GW, before 9/11/2001, Bob observed that it was too bad that such changes had not been in effect all through the 1990s. If they had, rich beyond belief would be an appropriate description.
BTW, where does that extra money come from? Retiree benefits must be paid from the proceeds of the GNP. Investing SSI money in stocks does not increase GNP. So who looses, so the SSI investors can gain?
-- posted by JIMMY62
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