Illegal aliens a Social Security boon

[jaguar]

well you can only go on past peformance and the people involved, bush's economic team isn't exactly awe-inspiring.

[Undertoad]

l123, my other question is, how much money are we talking about and how will it affect the market itself? Loading a market with money should drive up the market prices, as removing it should lower the market prices. Do your models note any effect on the market itself?

[lookout123]

i don't disagree Jag - but to disguise the attacks on an, as-of-yet unknown, proposal as anything other than pure partisan BS is foolishness.

UT - i don't have any specific models for what they are talking about doing. the only nation to bring a similar system online was Chile and i don't think there was enough money involved there to cause market shock. but, their money is in the global markets at this time so keep that in mind.

the only thing i see that would directly correlate to the situation would be the influx of cash the markets received due to the demise of pension plans and the creation of 401K's, 403B's, etc... in the '70's, '80's, and '90's. this time period also saw massive cash flow in because the average individual was able to invest on a smaller scale with mutual funds and the like. Is it exact? certainly not.

i believe the influx of new money will cause the markets to rise, but not dangerously so. trillions of dollars will not be dumped into the market some monday morning. if this is modeled along the lines of the TSP's and/or the Chilean model, then we are talking about managed funds with limited choices. managed funds means that there would be professionals who would know that they can't just buy everything they want in a single day. the funds would be sitting on very large cash positions for some time as they drip the money into the markets.

anyway - i don't have all the answers because, of course we haven't seen any real proposals yet. my point is that people should keep more of an open mind on the issue rather than dividing up on party lines before the issues are even known. individual accounts can work, but that doesn't mean that bush will put forward a plan that we want to adopt.

[Happy Monkey]

Originally Posted by lookout123

i don't disagree Jag - but to disguise the attacks on an, as-of-yet unknown, proposal as anything other than pure partisan BS is foolishness.

a) I don't think it's too unreasonable to think that his requirement that people sign on before he reveals the plan implies a massively flawed plan.

b) He, his economic advisors, and the current Republican leadership have a history of wanting to end social security, so I'm not going to give them much benefit of the doubt on the issue.

c) Whatever his theoretical plan is, it is irrelevant to debunking the FUD he's spreading about the current system.

UT - i don't have any specific models for what they are talking about doing. the only nation to bring a similar system online was Chile and i don't think there was enough money involved there to cause market shock. but, their money is in the global markets at this time so keep that in mind.

Chile and the UK both implemented private accounts. I don't know how it affected their markets, but it wasn't good for their people.

[lookout123]

but it wasn't good for their people.

expound please. i'm not familiar with much of anything about the UK. no sunshine? no interest.

[Happy Monkey]

They lost money.

[lookout123]

For help in designing the plan, the government turned to the insurance industry, the main source of long-term investment products in Britain. By assigning this role to the industry that would benefit most, the government had in effect asked the fox to design the chicken coop.

The competition to sell pension investment products to the public was intense. Products were numerous and complicated, and few people could understand them. Fees and costs often were not fully disclosed by agents, who could pocket a portion of the first few years’ sales. Rules were poorly designed and rarely enforced.

at a glance i would say that is an obvious setup for failure. i wouldn't support any plan that let the insurance industry be in charge of anything.

even here and now, getting your investment advice from your insurance agent is a surefire way to lose money. insurance products (annuities, life, etc.) pay the highest commissions with the lowest returns of any product i come across. (generally, although there are exceptions.)

to go a step further i wouldn't support a plan here that came to the private sector for me and my colleagues to invest the money. the government, or whatever organization is set up to run this can quite easily hire qualified money managers to run funds exclusively for this system. no commissions, no payouts to brokers, etc.

this organization can be self sustaining and even profitable if that is a goal with extremely low annual expenses, most likely between .10-.30% annually. it really wouldn't be that much different than the no load funds that are in existence. the funds would have to be extremely limited by their own prospectus so their actions would be very transparent.

so, yeah HM - i'd stand side by side with you and rail on the proposal if it looked like the UK's, but there are ways to make this work that would significantly benefit the people of this country.

edit: it also looks like they had access to their funds and could choose to do anything they wanted with them. the choices should be limited and the money untouchable, just like most TSP's and 401K's. (i.e. no loans.)

[Happy Monkey]

Almost every decision Bush has made in office has been asking "the fox to design the chicken coop". That's why I don't trust his secret plan to be reasonable.

[BigV]

Sorry to barge in here...but this is an important topic, and I want to get in on the discussion. I read all the posts and the links, and I am trying to understand all I've read and heard. There are some assumptions and agendas and ideas out there that I've been unable to coroborrate. If any of you know of any supporting or refuting evidence I'd love to learn about it.

I heard a surprising report that a given estimate included figures "based on a 150 year lifespan", lending weight to the crisis theory. The best I could find here and their worst case (longest life expectancy) numbers come just short of 93 years old. A loooong time to be paying ss benefits for sure, but a far far cry from 150 years. did anybody else see the 150 year number or am I hallucenating?

SS was envisioned to be a good idea in the aftermath of the stock market crash of 1929 and the subsequent depession, and now some think the stock market is the place to turn for security?

who are honest brokers for the figures in question? GAO? SS trustee board?

Sorry, total rant here, but bush's demagogery and fearmongering about the file cabinet of paper that represents the failure of the ss system is just beyond the pale. where is major media outcry the outrage about this highly specific distorion of the facts? am I to believe that the full faith and credit of the united states of america is in question? after all, these treasury securities, some 1+ trillion worth, are they "just promises"????!!! what the hell is money? or a mortgage? or a bank statement? or a contract?

Damn. I need a break.

[Happy Monkey]

I heard the rumor that one of the projections Bush is using assumes that medical science will produce 150 year lifespans, but people will still retire at the current scheduled age. I haven't seen any source on that yet, though.

[BigV]

HM:

http://www.stripersonline.com/cgi-bi...0;t=016824;p=2

This link contains a discussion in which the same idea is mentioned. I am sure I didn't imagine it. I think I heard Bush's voice in a sound bite on the radio saying it. In any event, to let the lifespan value rise to 150 yrs old and hold the retirement age at 65 to prove the point that SS is in crisis proves only that having to resort to such a ridiculous distortion of the parameters subtracts credibility from the proponents of the whole "the sky is falling" camp.

[BigV]

Almost certainly discussed before, but...

Projecting numbers this big, this complicated so far out, say, 75 years, is not a certain process, to say the least. So, given that EVERYONE'S numbers are estimates, why not just make some marginal changes? I like these:

Raise the ceiling on the amount of wages that are subject to the tax to a value greater than $90,000, maybe no limit. Seriously. Yeah, yeah, "soak the rich". Shut up and pay the man.

Continue to raise the retirement age at a rate scaled to the increase in life expectancy.

What's sacred about the actual dollar amounts in taxes or in benefits? Why not make small adjustments in both these numbers to move them both to the middle?

I am opposed to the idea of changing the basis for recomputing the annual increases from increases in wages to increases in prices. After all, these benefits reflect something closer to wages than prices.

And you know what? I am not opposed to private accounts, personal accounts, individual accounts, whatever magic focus-group-blessed adjective that returns the highest demographic values. Fine. Turns out we already have this in place. It's called an IRA. Or a 401(k). Or 403(b), etc etc. I urge all of you to save all you can, and be like the thrifty ant instead of the careless grasshopper. The wisdom of Aesop is valid here.

BUT.

Do not insult my intelligence by suggesting that this important issue, this real problem will be solved by taking money out of the Social Security Trust Fund revenue stream and putting it into another place. Another proverb about Peter and Paul comes to mind here.

The SS program represents a promise to generations of workers. *resists urge to bring up other broken promises* This promise is expected to be kept. It has been kept. I do not want my generation to be the one that broke the promise.

Are you listening President Bush?

[jaguar]

Good to see the top 1% won't starve, poor things

[Happy Monkey]

Finally someone is looking out for the most downtrodden members of society - the children of the extremely wealthy.

[lookout123]

exactly why are we in favor of taxing monies that have already been taxed?

doesn't "double taxation" ring a bell for anyone? i agree it is easy to build a sympathetic case for an estate tax. i dislike paris as much as anyone, but why is it ok to tax someone twice, just because they have $XX?

i look at this from a more realistic standpoint. I have quite a few clients who would get hit with the estate tax as it stands now.

they don't just tax someone who has $XX sitting in cash next to the fireplace for kindling.

- cash assets, investments, etc.
- real estate
- real property
- businesses
- life insurance

it isn't hard to go over the limits as they are set.

scenario: corner dry cleaner has worked thirty years building his business in his community. he makes a good living, takes care of his employees, is involved in community organizations. he pays his taxes on his business and personal earnings every year. he has a modest home in a nice neighborhood. because he is concerned about not having a pension or 401K he funded his IRA every year and has saved some additionally. he has a family so bought a life insurance policy to care for them. altogether, a stand up guy , don't you think? maybe he reminds you of yourself or someone on your block.

one day this hard working business owner has a heart attack and dies. his wife and children are heartbroken, but what can you do?

the house? $300K
the business? $600K
Investments? $275K
Land they had bought to build dream retirement home? $320
Life Insurance? $700K

The life insurance and investments can provide the family with a stream of income of @$50-60K/ annually.
The business is a tough issue - she wants to keep it in the family but the boys are a little too young to take over the reigns. she will have to hire a good manager to keep the high standards her husband always enforced. Her income from the business is basically a wash after finding, hiring, training, and paying the manager.

The CPA and attorney call her in for a meeting to inform her that her husband was a successful business owner. too successful. the estate tax is due. She has choices though.
1)She can sell the land, but that is tough because of sentimental reasons and she still wants to retire there.
2)She can sell the business, but then all of her husbands hard work to build a business that her son's can take over in just a couple of years, is wasted.
3) She can pay it with the Life insurance money, but then she would have to pay the manager of the store considerably less or do the job herself for extra income.

do you see where i am going here? this is a real story. this isn't someone who is obscenely wealthy. they probably live on your block. they have worked hard and saved and planned for the future.

everything they have they bought with money that they already paid taxes on. why should the estate tax go after the same dollars a second time?

******
what do i know though? i support a flat tax on every dollar earned over $30,000. no loopholes. i read recently that an 8% tax on every dollar earned over $30,000, plus a 1% additional sales tax would more than make up for anything lost by throwing out the "progressive tax" system. you know who won't support something like that though? CPA's attorneys, employees tax related businesses. they are afraid people won't need them anymore.