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Thursday, January 8, 2009

How's this gonna work?

Let's see. The federal government is going to spend another 12 figures to stimulate the economy, cut taxes, expand health care, and...

Did I just hear him say cut Grandma's Social Security?

Well, at least the Wall Street guys got away clean.

Comments (21)

Not to fear, he is going to keep giving to the financial sector and the Military-Complex in the old fashion way. And old age pensioners and those that are poor will help foot the bill. He learned well at University of Chicago and the Friedman methodology of trickle down economics.
As I get older the difference between repugs and dimmos becomes blurred.

More fiction from the NYT. Social security as such was not ever mentioned by Obama.

I still contend that Social Security is the largest and greatest Ponzi scheme ever propagated upon the citizens of any developed nation.

That said, history teaches us that the best means of unify the citizenry is through suffering.

Social Security is a Ponzi scheme only to those who don't, or choose not to, understand it. It's a current transfer, through taxation, of money from working people to retired people. To be a Ponzi, a scheme has to be misrepresented as an investment, which it is not now and never was. Z, you and others who perpetuate this canard about Social Security are liars, misrepresenting the system.

You are splitting hairs,,or something like like.

For the most part SS is, essentially, a ponzie scheme just as most who use that "canard" mean. Not a direct or identical comparison but enough to justify the canard. Hardly does that mean there are all these people "who don't, or choose not to, understand it" which you feel compelled to educate.

It matters not how it is fluffed and shined by those not liking the canardage.

Leaping into the "liars" aspersions is canardage of the worst kind.

SS is what it is. A massive, unsustainable, big government social program which mission creeeped far beyond it's original and worthy intent.

The Ponzie scheme label hardly says enough.

Lately politicians say this or that will cost a fortune, and then they say, "but let's not forget the high cost of doing nothing."

My question is when did the cost of doing nothing get so high? I used to be able to pull it off with just a bong and an old episode of Perry Mason. Yes, there would sometimes be additional costs like a bag of chips or other munchies, but I could still do nothing for much less than this.

"a scheme has to be misrepresented as an investment, which it is not now and never was."

If you ask the average person about what happens to 15% of his paycheck, they do truly believe it is going into an account for their retirement. No political leader has ever stated anything to disabuse people of that notion.

Then again, if you ask the average person under 35, they truly believe they'll never see a penny of it.

Until the repugs raided and squandered the SS money it was almost sustainable.
To make you repugs feel good think of it as a bail-out for the human race, or a lead parachute for the non-wealthy.

KISS: I don't get the U of Chicago reference. Obama taught a few Con Law courses at the law school there for a couple years. That history doesn't support the implication that he is an acolyte of Friedman (who retired from U of C in 1977) or anyone else from the econ dept. He didn't go to school at Chicago. He went to Columbia (undergrad) and Harvard (law).

Ben, "liars" is much too polite a word for you and others who mislabel social security in order to criticize it.

SS doesn't need a label to criticize it.

Oh yeah, the repugs "raided SS"??

Gee,if only we had President Gore's lock box.

If Congress has the power to offer a tax code inducement to funnel your private savings to members of the private stock exchanges then they have equal taxing power to offer inducements exclusively for investments in non-incorporated entities.

Imagine if a tax code qualified investment is one that is a sole proprietorship or subchapter-S-type entity or a partnership or the like.

The entire Wall Street game, coupled with nearly all variations of retirement schemes and tax code deductions for other specialized savings accounts, is premised on separating you from your money, just like a Madoff ponzi scheme.

If SS were modified so as to borrow a trillion or more dollars to buy stocks and bonds -- including the bonds just issued -- then the scheme would have reached a simultaneous pinnacle of both transparency and lunacy.

Who could sanely object to letting an individual make their own investment decision for investments where insider trading on insider information is not an evil but just information to digest while making a simple business judgment decision?

Any company that offers stock options hither and yon (just dilution of other equity holder's interests) is a surefire clue that the big game is to sell stocks (ergo, not to raise capital). As a proof consider whether it would make any business sense for a subchapter-S corporation with only one "owner" to issue stock options to the one owner, herself.

Individual Incentive -- There Is No Substitute.

Allan L., can you explain how SS is invested in any instrument that provides any kind of gain or loss until each of us can use our 15%investments through out forty years of work. If not, then that is why some might think it is a Ponzi scheme.

In fact that is how the recent 50 Billion Ponzi schemed worked. A good share was invested, but a 8% was "promised", even though it fluctuated broadly. This is what the US Gov. has done with SS, it promises that each of us will get $1200 +- per month return, no matter the performance. With the "borrowing" from the SS investments by the US Gov. then SS relies on the future investments by future citizens to be able to guarantee the monthly payouts.

Isn't this the same as a Ponzi scheme? I'm not against SS, I just want it funded and the payouts somewhat reflecting the performance. That means if payouts need to be uniform, then a reserve is needed at minimum.

Social Security is in trouble because of the baby boomers. In 30 years, when you're all dead and the balance between workers and retirees is restored, Social Security will be just fine. In the meantime, we need to either cut your benefits, raise my taxes, or raid other programs in order to pay for it. I'd be fine with a combination of all three.

If you ask the average person about what happens to 15% of his paycheck...

Gee, my paycheck only has a 6.2% deduction for FICA (and 1.45% for Medicare). I know the employer pays the other half, but I've never seen it on my pay stub.

PMG, let's be fair. I think that from an employer's perspective, the full FICA (subject to the cap) and the full medicare, which add up to almost 15% on the first of those many $100K's or so of your pay, are part of the cost of compensating you.

"Gee, my paycheck only has a 6.2% deduction for FICA"

Try being self-employed, then you'll see the 15% that could have been invested.

It makes a neat math exercise to take 15% of your salary (my correction) and figure out what 40 years worth of that contribution work out to - A lot more thatn $1200 a month probably.

Folks from the Depression Era saw Social Security both as an investment device and an entitlement. Dad was born in 1916 and after many years of work and financial success he was a little sheepish about collecting SS even though he didn't need it. But since he also saw it as an investment strategy that he paid into for over 40 years he was not ashamed to collect.
Dad loved Reagan so much that he overlooked Ronnie's misuse of the Social Security Trust Fund. Remember when some politicians were brave enough to talk about means testing for SS when we knew early on the system was going to go broke? Folks like my dad would have understood-- he might not have liked the idea of not getting a return on that particular investment but would have ultimately accepted the fact that he was not entitled to collect if it meant others would have to go without any retirement benefits.

MF, I hate on going rhetoric.An old Arabic saying is: When you lie down with dogs you will get fleas. So: "KISS: I don't get the U of Chicago reference." He congregated with the Friedman ilk and the the rub off is evident in his choices.
You Ayn Rander's-Wanna-a-bes, are hilarious, try real self made men like Warren Buffett and Glenn Turner who never reflect badly on SS, I might even add Bill Gates and Jobs. One thing about repugs they live a simpleton life.

Where is all this money going to come from? This really is a straight, honest question. The cost of the wars in Iraq and Afghanistan, the bailout(s) and now a stimulus. Is there an chance we could go from deflation to hyperinflation?

Heres the tough love kids....this country is entering into the next great depression. Every single sign points us in this direction.
Expect 20% un-employment soon. The dominos are now falling fast. Ten years ago the experts said there is way too many retail strip centers, malls and categories that are repeated. Now the shake out starts here (main street usa).....I do not know a business that is not cutting hours or people. Where do these innocent bystanders go to find jobs? Nowhere. There are no jobs.
So watch billions get poured into un-employment and fighting massive street crime. Heres the plan that will work. Forget about the cost folks, its half the price of a depression.

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