Msg for my Kids, Grandkids: Retirement Investing is a Bad Thing to do

[adios]

As is often the case, issue of privitization of at least part of Social Security has brought to light a more interesting issue, the issue of people's attitudes toward saving for retirement. To hear the privitization naysayers, nobody every made a dime investing their retirement money in stocks or bonds. Other fixed income alternatives to bonds like CDs etc. offer a rate of return that is in part based on the default risk and the interest rate risk (duration of the instrument used). So investing in fixed income assets is done by a lot of people, all the time. The stock market is trickier to negotiate and a lot could be said about past returns and future returns and the nature of the risk involved. Suffice it to say that from the evidence we have of the stock market, there isn't much inherent risk in very long holding periods for the stock market. Past stock market returns have indicated that the rate of return has far exceeded the return for long term bonds. Future stock market returns are another matter and the amount of the equity risk premium going forward is certainly open to debate (stocks may do no better than buying bonds, maybe worse).

Anyway my point is that many people, including the naysayers to any sort of privitization, make investments all the time in stocks and fixed income securities of some sort. My take from the naysayers to privitization is that the first line of defense is let's trash personal retirement investing, it's no goot, even though many if not most of the naysayers do it themselves.

[Broken Glass Can]

Repeat after me...

[b]The gov'mint knows best.

Democrats will protect you from Evil Capitalism.

You taint capable of managing your money.

The gov'mint knows best.

[natedogg]

[ QUOTE ]
Anyway my point is that many people, including the naysayers to any sort of privitization, make investments all the time in stocks and fixed income securities of some sort. My take from the naysayers to privitization is that the first line of defense is let's trash personal retirement investing, it's no goot, even though many if not most of the naysayers do it themselves.

[/ QUOTE ]

I have a page on my website* that summarizes some of this anti-investement nonsense. The second section is titled:

"Private investing is a bad idea, not just compared to Social Security but as a general rule" because that is what they are now saying. Of course, that only goes for PRIVATE investment. Giving all your money to the govt is perfectly safe.

natedogg

*Yes, it's me who's selling the rights to his future Social Security. No takers yet.

[andyfox]

While the naysayers are saying (some of them) that they don't like the privatization because of the "risks," I don't think they really mean it. I have no evidence for this feeling, other than my sense that politicians are duplicitous in general. The Dems really just don't want any change to Social Security, or at least they are pandering to what they perceive as their public that they are "protecting" their Social Security. They also don't want Bush to seem like the Progressive on this issue by allowing him to "modernize" an old institution.

It's the same way I feel about, for example, both the flat tax advocates and Bush's plea to "save" Social Security. Both are disingenuous. The flat taxers just want to lower the top marginal rate and Bush wants to couple his privatization plan with "saving" the institution.

If the privatization plan is as advertised, that is, it's voluntary for younger workers, that there will rules about where and how the money can be invested, and strict limits on management fees, and it would be no more than 20-25% of their total Social Security, I don't see how it can be opposed on "safety" issues.

[andyfox]

From AP:

"Bush wants to let workers divert up to two-thirds of their Social Security taxes into private accounts that they could invest in stocks and bonds."

I thought the talk was 2% of the payroll tax. What's the current rate, 8.8% or so? That's why I said 20-25% in my first post. If Bush is talking two-thirds, the plan'll be dead in the water. Some Republicans came out scared today.

[jokerswild]

I was ghood through 2075 when Clinton left office. The rob the country blind deserter loaned the trust fund to the US government inorder to cut the taxes for the rich. They in turn by t-bills. What the wealthy used to contribute to the economy has turned into debt owed by the payroll tax crowd to the wealthy in the form of interests on the treasury notes. Socail Security has been a true target from a family that destroyed the FSLIC

[adios]

[ QUOTE ]
I was ghood through 2075 when Clinton left office.

[/ QUOTE ]

Funny how Clinton was talking about private accounts for S.S. and stating the S.S. needed a fix when he was in his second term.

[ QUOTE ]
The rob the country blind deserter loaned the trust fund to the US government inorder to cut the taxes for the rich.

[/ QUOTE ]

A tax cut for the middle class and an additional tax credit for the poor even if they didn't pay any taxes. Increased spending in Medicare/Medicaid at a rate 3 to 4 times what the economy grew at, after increasing spending on discretionary items like education, and all that after a recession inherited from the Clinton administration. Bush policies mitigated the severity of the recession.

[ QUOTE ]
What the wealthy used to contribute to the economy has turned into debt owed by the payroll tax crowd to the wealthy in the form of interests on the treasury notes.

[/ QUOTE ]

Check out the money spent on entitlements and you'll see that this statement is ridiculous.

[ QUOTE ]
Socail Security has been a true target from a family that destroyed the FSLIC

[/ QUOTE ]

Depositers had insurance. The savings and loan collapse had nothing to do with the Bush administration. See your guy Clinton and check out Whitewater.

[CORed]

What do I want to invest in?
Stocks?
Bonds?
Multi-generation Ponzi scheme (aka Social Security)?

[BCPVP]

"In the important field of security for our old people, it seems necessary to adopt three principles...Third, voluntary contributory annuities by which individual initiative can increase the annual amounts received in old age."
Who said this? Was it:
a) George Bush
b) Ann Coulter
c) Chuck Schumer
d) Franklin Roosevelt

[CCass]

Andy,

President Bush has stated that he would like for us to be able to deposit up to 4% of the 6.2% taken out of our checks (the employer match would not be affected).

The money could be invested in the same "plans" that are available to all Fed. Employees. The equivalent of a 401K.