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Social security - The Phantom Librarian
Spewing out too many words since November 2003
fernwithy
fernwithy
Social security
And on another subject, I was just reading an article on NRO in which someone roughly my age was going on about how Rock the Vote shouldn't be against putting Social Security in the stock market. I've always thought it was a bad idea--not a poorly intended one, just a bad one--but one line in the article particularly struck me: Is the MTV generation so risk averse that it can't stand the thought of lower guaranteed benefits, with the chance of higher ones?

Er... I don't know about the rest of my generation, but my own answer is a resounding, "You betcha, babe." Bird in the hand vs two in the bush and all that. That's the safety net. If I want to take some other money I have (yeah, right) and invest it, then I can do so to supplement social security, and I expect to do so, but that will be money I can afford to lose--money that is not, in fact, part of the safety net, but part of the ladder to climb.

I also must admit that I don't ever anticipate retiring, unless I strike it rich as a writer and can live off royalties forever. It's not that I wouldn't like to have time to travel and see all the things I'm missing in the workaday world, but retirement seems to be too financially insecure for me even now.
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Comments
rabidsamfan From: rabidsamfan Date: March 2nd, 2005 07:37 pm (UTC) (Link)
"Risk averse" is a pretty nasty way of saying "prudent", isn't it?
gryffin23 From: gryffin23 Date: March 2nd, 2005 08:24 pm (UTC) (Link)
So it's silly to want to be sure you have something when/if you require on the off chance that you might strike it rich in the stock market? Does no one remember the dot com revolution which came and went practically overnight? I'm with you on the bird in the hand philosophy. And to put things in perspective, I'm 23.
From: walkerhound Date: March 2nd, 2005 08:42 pm (UTC) (Link)
the only problem is that SSC is not so much a bird in the hand. yes the Federal government has promised to provided x benefits at x point in your life. but the amount and time can (and almost cerntly will) be changed. what ever individual lawmakers or economists think about the long term stability of the SSC system, most all of them talk about adjustments to the retirement age and benefit levels. it's just a difference in when and how much(and same thing for increasing SSC tax).

also the current return on SSC for most people is not greatly fiffernt than if thay had taken that $ and put it in a standard savings account.

sorry about the spelling by the way.
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fernwithy From: fernwithy Date: March 2nd, 2005 10:21 pm (UTC) (Link)
Exactly. I can't believe this is being brought up by conservatives. For heaven's sake... history, people! Remember that thing about paying attention to the past?

I think this comes from the kind of free-wheeling big business conservatism, which I don't tend to get as much as the kind of cultural conservatism I subscribe to (eg, disliking the sexual revolution, being nonplused by Derrida and Foucault, and finding contemporary society somewhat wanting--I'm a Tolkien conservative, more or less). Economically, I tend to be squarely a Democrat, and think of my taxes as paying for services rendered by the government to keep the country running relatively smoothly.
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miss_daizy From: miss_daizy Date: March 2nd, 2005 10:40 pm (UTC) (Link)
Yes, I find this whole scenario scary as hell. At 38 and 43, I feel like my husband and are going to be retiree "ginea pigs". After the next stock market collapse or two, government will shrug it shoulders and return to a real safety net and despite years of hard work and diverting income to savings, we'll be eating cat food heated up over a candle stub. And if it isn't us, it will be someone else and that bothers me just as much.





From: (Anonymous) Date: March 2nd, 2005 11:42 pm (UTC) (Link)
Exactly! If I could accept that level of risk, I would already be doing so by playing the stock market with my own discretionary spending money. But if I seriously messed up, I would still want the social safety net to be there to catch me. Playing stock market with social security would be like mortgaging your home just so you could use the money to play the stock market on the off chance you'll strike it rich.

This is particularly scary because no one knows why the stock market crash that caused the Great Depression happened - I mean, there are theories, but no one knows well enough to definitively prevent it from happening again.
From: walkerhound Date: March 3rd, 2005 02:53 am (UTC) (Link)
keep in mind that it was a world wide depression, many countries were coming, off masive war spending(Dept,rebuilding) and America was trying to move its Monterey system back to the gold standard(this was abandoned during the war years) which cused inflation. also a large section of the midwest dried up and blew away, that agriculture was a much bigger part of our GDP in those days. when the banks started to fail(there assets were no longer able to cover the dept held by the customers) people lost what ever thy had in savings(now your insured up to $100,000 by the government then it was just gone).

so the question is what was the tipping facter because most of this stuff could be argued as ether a cause or a symptom
(no subject) - feylin17 - Expand
From: walkerhound Date: March 3rd, 2005 03:21 am (UTC) (Link)
first can anyone tell me how to respond to the main post? i'm kind of new.

in regards to risk, on average i loss about $20 to SSC out of each paycheck.
so thats 20x4=$80 a month 80x12=$960 a year. if i was to put $960 a year in to a standard savings(share account) i could expect some thing around .1% interest(a little more for a good account and a littl less for a bad acount depending on the bank) and maintained that for the length of my working life i would end up with a payout about on a par(give or take a lot depends on what the SSC payout would be at that time, but it's only going to go down) and it would be my $. i could spend it on what ever i wanted at what ever time i wanted and what ever was left over would go to my children.

right now the SSC system works out to a dead loss for me. the money is collected some is used to pay currant benefits. the left over is promptly borrowed by the Federal government and add to general revenues. the Treasury department issues Treasury bonds, there grate bonds good intrest and have never been defaulted on as thy are backed with the "full faith and confidence of the United states government" what that means is that for them to fail the USA has to fail(and SSC would be the lest of ore problems). but what that means in an accounting since is that the government owes money to itself. when the SSC cashes in those bonds the money will come form the general Federal funds. that money is being used for something as we speak, you will ether have to cut some other program or raise taxes to make the payments.
mincot From: mincot Date: March 3rd, 2005 03:20 am (UTC) (Link)
Hear hear, Fern. As a single never-married in her early forties--and an academic at that, meaning that I chose education with a delayed (and low!)start to earnings rather than entering the job market early--I don;t want SS to go away! YEs, play with discretionary income and make some money, but ... I watched my TIAA-CREF accounts take a beating in the last five years, and I really don't want to think that ALL my retirement is going to suffer the same fate.

And for those bringing up historical parallels--ans an historian, all I can say is the terribly erudite "WORD!"
castaliae From: castaliae Date: March 3rd, 2005 06:49 am (UTC) (Link)
I always thought SS was meant as a safety net, and the point of a safety net is to be there. You are meant to be risk adverse for the safety net. But thats just me.
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