Why Not Government-Guaranteed Price Floors for Stocks?

Americans got a few trillion dollars richer in the second quarter of 2009, according to the new Flow of Funds report [pdf] issued yesterday. We're still more than $12 trillion poorer than we were at the 2007 peak, when the world was powered by the black fuel, the deserts sprouted great cities of pipe and steel, and U.S. household net worth, powered by inflated prices for condos, strip malls and Beanie Babies, was at an all-time high net worth of $58.6 trillion.

You may have guessed that this increase from March through June has come from the stock market. For confirmation, swing on down to page 118, which reveals that Americans' equity shares at market value increased from $11.1 trillion to $13.3 trillion during the three-month period.

Leave aside why the stock markets continue to rise when all the economic "green shoots" are really too pathetic to name (but I'm sporting, so I do name them). The question is how do we make sure this number stays up? When the Republocrats were making the case for intervening in the debt economy and the real estate market (through TARP, Making Home Affordable, etc.), they did so strictly on greater-good principles: Foreclosures hurt whole neighborhoods, allowing the financial system to "melt down" will make us all poorer and so on.

So why treat stocks, which are the only bright spot the American public has seen this year, as any less precious than real estate or banks? There are those who say we cannot afford a federal guarantee that the Dow Jones Industrial Average never again fall below 9820. I say we can't afford not to. This isn't just Wall Street funny money. It's our 401(k)s, our children's education funds, the nest eggs and hopes of countless American working families.

Comments

[Hazel Meade]

Just as we can crush cars to keep car prices up, and bulldoze homes, to keep homeprices up, so too, we can burn stocks to keep stock prices up.

I say the federal government starts a new program offering people cash rebates to "trade in" low valued stock for more expensive high priced stock.

[Pro Libertate]

I've got some Washington Mutual shares, valued at zero. Do they qualify for the Cash for Crap program?

[robc]

Pro Lib,

Ditto. Im willing to throw in some WorldCom if it makes the deal go smoother.

[hmm]

The rally is tied more to the huge drop than the economy. It's the fat kid on the trampoline effect. Or the less worse effect.

I say we just forgo the market and issue only government securities traded on a government exchange regulated by nothing but academic economists. What could go wrong?

[Seamus]

So why treat stocks, which are the only bright spot the American public has seen this year, as any less precious than real estate or banks? There are those who say we cannot afford a federal guarantee that the Dow Jones Industrial Average never again fall below 9820. I say we can't afford not to. This isn't just Wall Street funny money. It's our 401(k)s, our children's education funds, the nest eggs and hopes of countless American working families.

You say this as a joke, but if people in the White House catch wind of it, I'm not sure they won't think of it as a great idea (and a way to capture the middle-class vote).

[Jeff Schwartz]

People (and institutions) invest in stocks to gain a higher rate of return at the cost of greater risk. The problem isn't the risk, it is that too many people invest in instruments that are too risky for them or in instruments that they don't understand. I don't think a price floor is practical, much less a solution. The problem is that people are investing without understanding the markets. Corporate abuses / stock price manipulations are another matter. In these cases, regulation could tighten controls on corporations. Still, I don't see a floor doing anything here but costing the taxpayers money they don't have. In the end, we would just end up self-insuring.

[hmm]

I'd personally like to thank Timmy and BAC for the 400% plus pay day. Thank god for no artificial floors. (which all started with a lucky limit fill on an opening)

Yes I know it was sarcasm.

[robc]

Jeff Schwartz, sarcasm. Sarcasm, Jeff Schwartz.

[Hazel Meade]

I've got some Washington Mutual shares, valued at zero. Do they qualify for the Cash for Crap program?

Only if you agree to buy shares in General Motors and Chrysler. I hear the government is looking to unload some of them. AIG looks to be a smart deal too.

[hmm]

AIG is kind of interesting as of late. The short sellers have been coming back on their shields quite a bit due to AIG. Of course the fact it survived, fed the need to cover, which fed the price increase as the need to buy increased. For shorters of AIG the cornhole is a hurtin'

[hmm]

Sentence structure failure.

My helmet was on too tight sorry.

[Brian Milne]

I hope this is a joke.

[Some Guy]

Only if you agree to buy shares in General Motors and Chrysler

Behold the latest proof that people are incredibly stupid: Stock in "Old GM" is still trading at 77 cents. That's like buying a lottery ticket that already lost.

http://finance.yahoo.com/q?s=MTLQQ.PK

[?]

A dead stock index would be handy for measuring cat deadness.

[hmm]

Motors Liquidation is trading on people looking to make short term gains off of the noisy people who think its GM stock. It's the day traders fucking with the retarded day traders. And some are even making money at it. God the market is great.

[Craig]

Stocks continue to go up despite the dismal economy because the risk averse and otherwise sane investors got out last fall, leaving only speculators and hopeless optimists.

Don't worry about your 401(k) and IRA balances dropping though. The government will soon seize them and replace the value with "investments" with a guaranteed payout, a la Social Security. It will be for your own good.

[Paul]

say the federal government starts a new program offering people cash rebates to "trade in" low valued stock for more expensive high priced stock.

Cash for "Junkers"

Aha! Hahaha! I kill me... oh the long winter evenings fly by...

[Ding Dong]

Irving Kristol is dead.

[Hazel Meade]

A dead stock index would be handy for measuring cat deadness.

Someone contact the guys at the Santa Fe institute.

[Hazel Meade]

AIG is kind of interesting as of late. The short sellers have been coming back on their shields quite a bit due to AIG. Of course the fact it survived, fed the need to cover, which fed the price increase as the need to buy increased. For shorters of AIG the cornhole is a hurtin'

Ahh, but what happens when the government is finished "bailing out" AIG - er - all the backers of AIG? You think they are going to keep AIG around to "pay back" those hundreds of billions? Fuck no. They want that corpse burried in a deep deep hole. Possibly at the bottom of the Hudson, with cement blocks tied to it's feet. Dead me tell no tales.

[ChrisH]

There's thinking, my man!

We need a federally guaranteed minimum price for energy futures spreads. This will allow the poor and minorities to safely join the ownership society.

And... a flash trading program for the Wii(tm). When your trades absolutely, positively have to be there overn... Oops. Too late.

[hmm]

Ahh, but what happens when the government is finished "bailing out" AIG - er - all the backers of AIG?

I was just talking about the short sellers that were banking on AIG going under or staying in the crapper for a while. Unfortunately for them AIG stuck it out. And earlier this month late last the short sellers started to panic, AIG rose more, the short sellers had to purchase stocks to cover their positions, which drove the stock higher along with their loses.

As far as AIG being buried, they aren't going anywhere until they no longer back GS. And the guys at AIG aren't dumb enough to sever that tie. AIG is a leech on the nutsack of the guys sucking on the government teet.

[hmm]

In other news I have a shrimp platter and veggie platter ordered for the weekends big Obamathon.

[Tim Cavanaugh]

I was just thinking of a plate of shrimp.

[Hazel Meade]

As far as AIG being buried, they aren't going anywhere until they no longer back GS. And the guys at AIG aren't dumb enough to sever that tie. AIG is a leech on the nutsack of the guys sucking on the government teet.

I see AIG as the guy sucking the teat and GS as the leech personally, except in this case, the AIG is more like a brainless zombie suching the governments teat, while GS keeps it's dead flesh animated long enough to continue devouring the governments sustenance.

But really GS is already finished with AIG. They got their billions. It's safer to do away with AIG once everyone else gets their cut, to dispose of the evidence.

[Hazel Meade]

Shorter version: GS is the zombie virus AIG is the zombie.
Once the zombie virus is finished with it's host, it can let the decaying corpse die, and infect a new body, to seek out new brains.

[Hazel Meade]

Or, zombie parasite, in case there are any epidemiological pedants out there.

[oldtimer]

There are many old people like me that can't get affordable life insurance because of pre-existing conditions,(like age) through no fault of our own.Is it my fault that I was born during the Great Depression and had to listen to the same stories, over and over and over, about how tough things were ? If we had all the people in the life insurance pool, especially the young and healthy, we could all get the same rates. That way I could leave a real inheritance to my family, after all, it's for the children.

[Voros McCracken]

I was just thinking of a plate of shrimp.

"A lot o' people don't realize what's really going on. They view life as a bunch o' unconnected incidents 'n things. They don't realize that there's this, like, lattice o' coincidence that lays on top o' everything. Give you an example; show you what I mean: suppose you're thinkin' about a plate o' shrimp. Suddenly someone'll say, like, plate, or shrimp, or plate o' shrimp out of the blue, no explanation. No point in lookin' for one, either. It's all part of a cosmic unconciousness."

Unfortunately I did have to look that up, and could not remember it all from memory. Nice work, Tim.

Nice to see Tracey Walter is not only still alive, but still getting regular work. One of the great character actors ever.

[Voros McCracken]

Hey the clip is actually on youtube! Click my name to watch.

[hmm]

"A lot o' people don't realize what's really going on. They view life as a bunch o' unconnected incidents 'n things.

I just called 1-800-psychic-hotline.

[Kurtigo]

Excellent idea, shows the idiocy of price floors.

[Hazel Meade]

If we had all the people in the life insurance pool, especially the young and healthy, we could all get the same rates. That way I could leave a real inheritance to my family, after all, it's for the children.

In other words, your children should pay money into an insurance pool, to pay for you health care, so you'll have more money to leave to your children.

Instruct me about where the net benefit to anyone other than insurance companies is?

[ANONYMOUS]

Wait till all the traders get back from late Aug, early Sept vacations.

[prolefeed]

If we had all the people in the life insurance pool, especially the young and healthy, we could all get the same rates. That way I could leave a real inheritance to my family, after all, it's for the children.

In other words, your children should pay money into an insurance pool, to pay for you health care, so you'll have more money to leave to your children.

Instruct me about where the net benefit to anyone other than insurance companies is?

The above are inaccurate phrasings of the actual theft and coercion being proposed:

Try this:

If the government forced all the healthy young people, under threat of imprisonment or whatnot, to buy life insurance and pay way higher rates than actuarially justified so as to subsidize the much less healthy elderly, then the subsidized elderly would have stolen money to spend on whatever they wanted, possibly to include giving to their children, if any.

The net benefit is to the current recipients of the theft, of course.

[cmace]

"elderly would have ... money to spend on whatever they wanted"

Thus, a bottom up stimulus package, creating jobs and opportunity for everyone.

[hmm]

Wait till all the traders get back from late Aug, early Sept vacations.

no sept sell off. The world has gone MAD!!!!!

[MNG]

"The net benefit is to the current recipients of the theft, of course."

Well, there is the little fact that, er, those young healthy people of today will inevitably be the old sick people of tomorrow.

Think of it this way prole; what the young people are paying for is a system, a system that, yes, at any current time is helping out old sick folks more than healthy young people, but a system in which the healthy young people will benefit when they get old and sick.

The way I think about welfare and unemployment is like that. While I've never had to collect either what I get for my "premiums" is the security of knowing such systems are out there if I ever do need them. Knowing that even people that assume they are Randian Super-Men whose inherent Hyper-Productivity should be apparent to all lose their jobs and such now and then, it's good to know such systems exist for such folks (and of course the run of the mill "parasites", right?).

[MNG]

"The net benefit is to the current recipients of the theft, of course."

Oh, and prole, don't you know the "theft" meme is so yesterday, try "TEH SLAVERY!"*

* "TEH HOLOCAUST" was considered, but we don't want to appear to be over the top in our rhetoric to the IgnorantSocialist Masses.

[JB]

A government cock in every hole!

[Warty]

It's sad to see it come to this.

Shut the fuck up, MNG.

[hmm]

MNG just described Social Security.

Which is kind of funny.

Since he is clearly holding the same things constant or assumed that the creators and extenders of social security did.

History fail, population curve statistics fail(either way), logic fail.

Fail trifecta.

[BeesInTheBrain]

@MNG
1) You need to get out and get to know more "healthy young people" before deciding how they should spend their money. The majority of the "healthy young people" that my daughters hang out with barely can make rent let alone buy health insurance.

2) You need to get more poor friends to see exactly how welfare and similar programs get used and how they lead to perpetual poverty for people.

[ransom147]

bah, MNG has the perspective that an innocent man imprisoned for the good of society as a whole is an acceptable evil because of the deterrent toward aberrant behaviour.

however to let a person guilty of not taking care of themselves to die as a result is completely unacceptable. the tortured logic it requires to build a framework of support around the mindset of a liberal is appalling. i.e., utility good here, but not good there because it serves the wrong purpose.

[hmm]

We should make all insurance private companies that are held publicly and them force them to be traded on a government controlled exchange run by academic economists and the Fed, the OCC, FDIC, SEC, new insurance agency, FBI, DEA, ATF, NSA, CIA, CDC, Congress, the White House, the USSC, Peta, ELF, NASA, and my cat. (the fat cat not the thin one or GTMO cat)

[Hazel Meade]

Think of it this way prole; what the young people are paying for is a system, a system that, yes, at any current time is helping out old sick folks more than healthy young people, but a system in which the healthy young people will benefit when they get old and sick.

Oh, except benefits and taxes do not remain static. They will go up when there are more old people, and down when there are more young people, due to the changes in voting power. So we can all get to fight eachother constantly over who gets everyone else money. And if you happen to in between baby booms, you're pretty much fucked because there's less of you no matter how old you are.

Yay, "social justice".

[Tim Cavanaugh]

because there's less of you

No, there are fewer of you.

[J D]

Social Security is not perfect. It is not fair. It is not necessarily "rational" for all those involved. However, it does represent our society's endeavor to address the issue of impoverished seniors. It is an attempt by society to ameliorate their condition. Are there better ways to do it? I'd love to hear them.

Honestly, I think people in this thread are missing the point.

[Tomcat1066]

JD,

People on this thread aren't "missing the point." They understand it perfectly well. You, however, seem to be missing the point. These types of programs are immoral to many, including myself, because we are forced to pay into a system that we don't agree with. There's no "opt out" available, and frankly I don't figure it'll be there for me in 30 or so years when I'm of age anyways, so I'm throwing money down into a hole every payday.

We live in the wealthiest nation on Earth, but that wealth wasn't accumulated through government programs. It was accumulated through individual initiative. Retirement should be the same way. Once upon a time, a pension was from your job, but today we have the 401K. We have IRAs. We have good old savings accounts. We have so many investment vehicles that it'll make your head spin. And yes, markets do weird things, so you have to be smart about it. But a person can support themselves just fine by investing themselves rather than looking to the government for their handout.

Feel free to disagree with it, but keep in mind that you've already said that Social Security isn't fair either. Frankly, I could give a shit about it being "fair". I care about the fact that money is taken from me, against my will, so it can be given to someone else. That's it. Period.

That is the point. Well, at least mine 😉

[Rich]

People on this thread aren't "missing the point."

Aye!

Tim Cavanaugh for President in 2012!

[MNG]

"You need to get more poor friends to see exactly how welfare and similar programs get used and how they lead to perpetual poverty for people."

This is always funny to me. Surely whats killing poor people is, er, giving them money when they are in need of it! I know, I know, perverse incentives blah, blah, but certainly there are worse things to do for poor people than to give them money...

"MNG just described Social Security."

Well, yes the logic is the same.

Let's hope ransom was really drunk @ 11:19, otherwise he is likely retarded. WTF was his point supposed to be?

"But a person can support themselves just fine by investing themselves rather than looking to the government for their handout."

Oh yeah, all those people investing themselves are doing great right now, no need for government assistance there!

[MNG]

"These types of programs are immoral to many, including myself, because we are forced to pay into a system that we don't agree with."

Well, it's in large part people like you who we are worried about. Thinking yourselves Randian Super-Men when young and "invincible" you heroically opt out and invest your money privately, and then when you need retirement or health care or whatever we find that either you 1. invested stupidly or 2. the market goes to hell (how unlikely is that, huh?). Now you need help, and we are'nt going to let you just starve and die. It would have been better to make you participate in a program that will then take care of you if needed.

[hmm]

Why do senior citizens need to retire anyway? Most of the people I know that could retire still work. Why is there this idea that you are entitled to sit on your ass and grow old past age 65?

Trying to argue that the logic, or math, of Social Security is sound is pretty funny.

[MNG]

hmmm
I guess we could let them work until they die. I mean, why not have them work jobs as they are actually dying, I mean little tasks in the hospital and such?

C'mon hmmm, try being an actual human being now and then.

[MNG]

And what about all of these kids not working? Where do we get the idea they can just sit on their ass before the age of 15? I mean, those little hands are perfect for cleaning out pipes and gun turrets.

[MNG]

Social Security has made so many people's lives so much better while imposing barely noticeable burdens on most that it is not even funny. This nation without it would be a horrible place. It allows old and sick people to live with some dignity, secutiry and leisure for at least some part of their lives. The mass of people know this, which is why no sane politician will mess with it seriously.

[hmm]

So could you answer the question? Why are people entitled to stop working at 65? Again the majority of people I know who are "retired" still work. Both white collar and blue collar.

Using the Keynesian "if we didn't it would be worse" justification is really not the best way to make an argument.

I have no problem with children working. Where I grew up most of the kids I knew did more work by the time the bus came at 7AM than a lot of people did all day. They did it again when they got home and worked at least the cool morning hours on the weekends. There's nothing wrong with teaching a child the values of hard work. Working child is not always equated with exploitation.

The mass of people know this, which is why no sane politician will mess with it seriously.

This has to be true. Since all politicians are driven by altruism. Or maybe one of the largest and most active voting groups happen to be recipients of the entitlement. Na, it has to be the altruistic politicians.

[ransom147]

MNG:

yes i was actually. thanks for noticing. to my point:

MNg | September 7, 2009, 3:24pm | #
robc
Utilitarianism is like democracy, it's the worst form of ethics except for every other form.

But yes, if punishing an innocent man would save many lives, then duh it is the right thing to do. Any other choice would be disrespectufl of human life and welfare.

http://www.reason.com/blog/show/135915.html

were you being spoofed there?

if not, why not apply the same logic to healthcare? why not let people suffer for their bad decisions as a means of deterring other people from doing the same thing?

[vince]

@MNG

Stop worrying about "people like us". We don't need your help, have never needed your help, and furthermore don't want your help. This is not a statement made from the brashness of youth, but one made from the sober age of reason. I don't want you to worry about me starving to death, I just want you to take care of yourself and your family. END OF LIST. If everyone did that, there would be no necessity for interfering do-gooders like you to come and SAVE THE DAY. Your patrician views of the world come from a lack of faith in your fellow humanity. I have great faith in the human spirit, and from that faith I conclude that while it may be difficult the vast majority of people WILL make it without help from the government. Those very few truly pitiable cases that require outside help will receive it from their neighbors, who unburdened by massive government instilled debt and lightened by a strong feeling of personal accountability will feel responsible to the pain of their neighbors. Government surety is not required, this is the way all free people act always.

They stop acting this way when do-gooders like you interfere with the process through political strong arm tactics.

[vince]

MNg | September 7, 2009, 3:24pm | #

"But yes, if punishing an innocent man would save many lives, then duh it is the right thing to do. Any other choice would be disrespectufl of human life and welfare."

Has to be the most morally repugnant string of words I have ever read. I would rather die than allow an innocent man to be punished on my behalf.

Anyone feeling differently is morally bankrupt!

[ransom147]

Vince:

i get the feeling many people view their fellow man as being more like G C Scott's scrooge as opposed to the wonderful cratchits and marleys they see themselves as.

[Joe Steen]

Oh wow, when you think about it, it does actually make sense! Wow

Jess
http://www.real-privacy.net.tc

[vince]

ransom:

I have that feeling too. Particularly with people who are overly concerned with the plight of people they have never met.

If more people worried about how they COULD help and fewer worried about how everyone else SHOULD help, this country would be taking a turn in the right direction.

[MNG]

"Why are people entitled to stop working at 65?"

I think it has to do with valuing human beings and their dignity. People are inherently valuable, not just as they produce. It's harder on older people to work, more potentially demeaning, especially when they have to in order to eat. We want life to be about more than "produce or die." For the same reason we feel that children are "entitled" to a period of life where they don't have to justify their existence by what they produce.

[MNG]

Vince and Ransom
I've been poor, and I've been well off (thankfully the latter currently).

Vince, I explained why people feel the need to make you part of the system. Making the system have an opt out could undermine the viability of the system itself, and then we have opt-outers thinking they could take care of themselves but ending up needing help. It's exactly because of people like yourself that we need to do this, we think you have a very poor idea of how well you will be able to take care of you and yours in the future and if we are right and you are wrong then it's too late, because we are not in fact going to let you "suffer for your mistakes" (because we are decent human beings, allowing suffering that could be easily prevented in order to "teach others a lesson" is a curiously utilitarian way of thinking for you folks who protest your opposition to utilitarianism so very loudly).

Ransom
Are you telling me that if you were faced with a situation where you had to either kill one innocent man or twenty innocent people would die you would actually refrain and let the twenty innocent die? That's hideously inhumane. Don't you give a shit about human life? I mean, wtf?

[ransom147]

MNG:

"allowing suffering that could be easily prevented in order to "teach others a lesson" is a curiously utilitarian way of thinking for you folks who protest your opposition to utilitarianism so very loudly)." - that's not my view but i believe it's a natural extension of yours as i stated.

as far as the dilemma you describe, i will never be faced w/ such a situation because i don't consider myself judge, jury, and executioner of my fellow... that is until he's no longer innocent and it's time to act. i personally think it's hideously inhumane to give that decision/power to anyone... it's not your job to go around martying people; it is an individual choice. that's what makes it exceptional silly.

[oldtimer]

I just realized that SS, Medicare, Prescription drug coverage and the new plan not only doesn't cover low cost life insurance, it also doesn't cover low cost dental or orthodontal care. Damn it, I want to look good on my last day. I was busy working in an undignified manner when I was young and couldn't afford dental/orthodontal care. If we included everyone in the pool....
Oh, yeah, my car insurance on my Beemer is way too high...

[Suki]

I can't afford headers for beloved boyfriend's pickup truck. When are we getting a program for that?

[ransom147]

*martyring

ugh

[hmm]

It's harder on older people to work, more potentially demeaning, especially when they have to in order to eat.

It's demeaning to work in order to eat? Wow. I demean the shit out of myself on a regular basis.

Your answer to my question is because people are entitled to it. Which is a pretty pathetic answer to why are people entitled to something.

[ransom147]

oldtimer: your sarcasm is thinning. better slather a little more on if ya wanna get the outrage level up. it was rather amusing when people fell for it upthread...

[hmm]

Dental care is generally low cost when compared to other medical care. Hell I gots me a toof yanked in trade.

[Suki]

Lots of old people remain productive well past 65. Look at the late President Reagan.

[robc]

I havent updated incif on my laptop apparently, so since I saw his posts again, and he brought it up, I will just add on:

Fuck off slaver!

And as a serious response before he goes back into filter mode, one technical problem with your assumption is that sometimes the young and healthy die before they get to be old and sick. Thus there is not benefit to them in the system.

I dont know how much he paid in, but Dale Earnhardt never collected his SS back.

[robc]

BTW, the above example is why, IF we are going to require people to pay into a retirement plan (insert SLD), privatized SS accounts with property rights is the way to go. If you die at age 64, instead of that money just going away, it goes into your estate.

[hmm]

I dont know how much he paid in, but Dale Earnhardt never collected his SS back.

Not getting it back is one problem. Not being allowed to decide where it goes after your early death is the bigger issue. That is what makes it theft.

[P Brooks]

I'm putting my retirement money into Dale Earnhardt autographed memorabilia.

I can't lose!

[Hazel Meade]

we think you have a very poor idea of how well you will be able to take care of you and yours in the future and if we are right and you are wrong then it's too late, because we are not in fact going to let you "suffer for your mistakes" (because we are decent human beings, allowing suffering that could be easily prevented in order to "teach others a lesson" is a curiously utilitarian way of thinking for you folks who protest your opposition to utilitarianism so very loudly).

You could, you know, take a wait and see attitude, instead of the whole "preemptive charity" approach.

[MNG]

hmmm
Your question was "why should people feel entitled to not work past 65."

My answer was "Because human dignity demands that people have some time where they do not have to work in order to survive. Just like we think its fucked up to make kids work to survive, even though they could, we think that way about old people."

Hazel
The whole point is that if we "wait and see" and we have all these goofs who gambled badly but now are in need it will be much more costly to addres that than if we had a system in place, due in large part to making them opt in at the beginning, to address that. Besides, we have some experience on this, it's called "before there was [insert program here, Medicare, SS, welfare, etc]" and we found, indeed, that we had all kinds of human misery that people's Randian foresight had not taken care of when they were young and healthy.

"privatized SS accounts"

Remarkable, simply remarkable that anyone could still hold this goofy view. What if Bush had done this years ago? Think of all the people now coming due whose market investments aren't worth shit now.

"That is what makes it theft."

Theft? Psshh. Why not "TEH SLAVERY?"

Oh, I see robc beat me there. But he's being serious...

[Suki]

Social Security is wage slavery. Obama told me not to say that.

[Michael Ejercito]

What if Bush had done this years ago? Think of all the people now coming due whose market investments aren't worth shit now.

You should at least understand the concept of an investment horizon.

People who invested in the stock market twenty years ago would still be ahead today.

In fact, people who invested in the stock market the day before the 1929 stock market crash would still be ahead today.

[Jordan]

Remarkable, simply remarkable that anyone could still hold this goofy view. What if Bush had done this years ago? Think of all the people now coming due whose market investments aren't worth shit now.

Social Security is unfunded by tens of trillions of dollars. Doesn't seem like a particularly sound investment.

[Jordan]

Not to mention the fact that the Supreme Court has ruled that no one has a right to their accrued Social Security benefits. Unfunded by $60 trillion and can be revoked on a whim. It doesn't get more illusory than that. I guarantee that I'll never see a dime of what I've paid into this ponzi scheme.

[Paul]

because there's less of you

No, there are fewer of you.

Goddamnit, Tim... it never ends with you...

[Paul]

"privatized SS accounts"

Remarkable, simply remarkable that anyone could still hold this goofy view. What if Bush had done this years ago? Think of all the people now coming due whose market investments aren't worth shit now.

As you typed these words, MNG, did the irony strike you?

[Suki]

Paul, Obama wanted me to tell you that irony is best served tepid.

[robc]

Just an fyi, I privatized SS account wouldnt have to be invested in stocks. Bonds, money markets, CDs are investments options for those who are squeamish about the market (wisely or stupidly).

And of course, using standard investment logic, you should never have any money you are going to need in the next 5 years invested in equities. So, the hypothetical person who needs there retirement funds today, would have been out of equities 5 years ago, and ramping down for the 5-10 years before that. I think they would have done okay.

Lets see, turn 65 in 2009, so would have been 25 in 1969, invest in market from 69 to 99, ramp down from 100% to 0% equities between 99 and 04, 100% bonds last 5 years. Yeah, I think that would have worked just fine.

[Jordan]

No, no robc. That would require personal responsibility. Nanny knows best.

[hmm]

hmmm
Your question was "why should people feel entitled to not work past 65."

My answer was "Because human dignity demands that people have some time where they do not have to work in order to survive. Just like we think its fucked up to make kids work to survive, even though they could, we think that way about old people."

So your answer is they are entitled to it due to your moral obligation to people based on age? Ok. So you qualified saying they are entitled to it with some sort of moral obligation. Great. Since you feel obligated you take care of them. Don't steal money from others to support your moral obligation.

[hmm]

10200 or bust.

[Jordan]

My answer was "Because human dignity demands that people have some time where they do not have to work in order to survive. Just like we think its fucked up to make kids work to survive, even though they could, we think that way about old people."

And if some people's definition of human dignity differs from yours? Here's a radical idea: let people keep their money and spend it on what they value. Those who want to retire at 65 can invest in retirement. Those who want to keep working can invest it somewhere else.

Also, life expectancy has risen by about 15 years since Social Security was first instated. Why hasn't the retirement age? Do today's old people deserve more years of "dignity" than those before them?

[robc]

BTW, just ran a quick, rough calculation.

If someone started working in 1969 and worked 40 years, making 60k the last year after getting a 3% raise every year, with 6.2% (SS part of FICA, non-employer) going into a s&p500 index fund, and phased out the last 10 years as I suggested above, moving to low interest money funds (3%), they would have deposited $88k over the 40 years and have $520k now. I havent priced them out, but I bet $520k would buy an okay annuity.

Thats assuming that was the only money saved towards retirement.

[Suki]

Human dignity entitles me to retire at 32, keep my house, pickup, the rest of my stuff, get that new shotgun I am shopping for and have beloved boyfriend continue to stock my refrigerator.

I will need a personal trainer since not having to leave the house might impact on my fitness.

Oh, and free weed too.

Obama wanted me to say all that.

[Suki]

robc, Obama wanted me to let you know that a rich person with over $500k in the bank needs to turn it over to the government.

[hmm]

The 6.2% is sort of low balling it. Most people require less to live on as time goes on. As major purchases are paied off and personal debt decreases they tend (at least historically) to invest more or have more to invest. The percentage invested tends to rise over time. Not to argue with your rough figures, but that tendency makes a huge difference in the end value of investments. Not to mention the ability to reverse mortgage (SCREW THE KIDS) and other similar things.

Human dignity entitles me to retire at 32, keep my house, pickup, the rest of my stuff, get that new shotgun I am shopping for and have beloved boyfriend continue to stock my refrigerator.

Did someone say shotgun?

[Suki]

Did someone say shotgun?

I wish I could get one of those without paying the extra license tax. And I wish I could get one of those!

[Hazel Meade]

The whole point is that if we "wait and see" and we have all these goofs who gambled badly but now are in need it will be much more costly to addres that than if we had a system in place, due in large part to making them opt in at the beginning, to address that.

What makes you think it would be more expensive to take care of the number of people who *don't* save to retirement through charity, than to tax everyone to provide for everyone's retirement, so nobody has to save?
You do realize SS is not means tested right? Everyone gets it whether they need it or not.

Besides, we have some experience on this, it's called "before there was [insert program here, Medicare, SS, welfare, etc]" and we found, indeed, that we had all kinds of human misery that people's Randian foresight had not taken care of when they were young and healthy.

Before there was [insert program here] it was the depression. And before that it was pre-industrial revolution. That's a bit like saying "Before we had the ADA cripples begged for money in the streets! Before we had public transportation, people travelled by mule wagon with their babies tied to their backs!"

Living standards are a heck of a lot higher today, thanks to capitalism, not government programs. I seriously doubt any elderly people would be wandering the streets begging for food if it wasn't for social security.

[Suki]

Living standards are a heck of a lot higher today, thanks to capitalism, not government programs.

But living costs are higher due to government. Neither Obama or MNG wanted me to tell you that.

[Tomcat1066]

Well, it's in large part people like you who we are worried about. Thinking yourselves Randian Super-Men when young and "invincible" you heroically opt out and invest your money privately, and then when you need retirement or health care or whatever we find that either you 1. invested stupidly or 2. the market goes to hell (how unlikely is that, huh?).

That's the thing. I. Don't. Want. It. Period. And I and my family are the ones who would be responsible for this, not you. Besides, have you even looked at someone's Social Security check? It's not enough for anyone to live on at a decent standard of living anyways. It's a low sum of money that everyone else is paying for.

Let's face it, Bernie Madoff is doing time for the exact same thing that the government is doing.

And for all your dim view of "Randian super men" or whatever else, how is it wrong to expect people to take care of themselves? I'm not talking about the disabled or something like that, they may need some assistance, but able bodied people can and should take care of themselves. It's morally reprehensible that anyone should be expected to take care of another who is capable of taking care of themselves. And when you have 30 or so years to prepare, then there's not much excuse for not being able to take care of yourself.

Oh, in response to the idea that it's undignified for people over 65 to work, you really need to shut the fuck up. If they didn't retire, they'd be in the same jobs they had (we have anti-discrimination laws, right?) and how is it undignified? The undignified jobs are the ones they're forced to take because they were counting on the Nanny State to take care of them, but they find they can't live on $1000 a month, so they get a job at Wal-Mart or McDonald's.

But no...that's not undignified at all.

[Neu Mejican]

Read this...

http://www.edge.org/3rd_culture/taleb08/taleb08_index.html

Really.

[Michael Ejercito]

Let's face it, Bernie Madoff is doing time for the exact same thing that the government is doing.

Is this correct?

[josey]

MNG: since you're so enlightened, why don't you do the right thing and go take a long walk off a short peir? There are poor people out there who need the money that's in your SS 'account', ya know.

And by the way, a bunch of us are petitioning our legislators to see if they'd be willing to force you to adopt a strict observance of the sabbath. We absolutely know that this is the right thing to do because we happen to be in possession of some super-secret knowledge that you probably would not understand. After that, it's on to some other pressing things; changing the name of the country to 'Jesus Land', and a strategic partnership between the public school system and the Catholic church. We're going to have nuns and everything. In case you have an argument on that, don't bother because the answer is always going to be the same: it's for the kids.

If you don't agree with all of this it's obviously due to what we dismissively refer to as 'moral bankruptcy'. And by the way, just so you don't misunderstand us, we are totally for freedom; meaning, if you don't like it, you can always move to another country.

[Big B]

MNG -

Why 65? Because its demeaning?

Its demeaning to work at 55, too, right? I mean, at 55, your statistically likely to die any day. Why not make retirment age 45, you know, just to be safe. Better yet, I know some people who never got to retire - they had to work right up till death from a heart attack at age 45 - so let's make retirment 35. Better yet even, 33 (I get to RETIRE! Yeah!)

Ok, so we get rid of SS, what happens? Seniors maybe have to live together as roommates instead of alone? You only have 1 kid so that you can save more money instead of having 3? Is that inhumane? Doesn't that type of outcome HELP the environment by reducing population?

I think there is an argument that SS and health care increase child bearing, thus straining the environment. Just another way liberal policies actually do damage to the liberals' stated goals.

[BeesInTheBrain]

@MNG
This is always funny to me. Surely whats killing poor people is, er, giving them money when they are in need of it! I know, I know, perverse incentives blah, blah, but certainly there are worse things to do for poor people than to give them money...
As I stated you need to get more poor friends to see how the system really works for them.

[josey]

"As I stated you need to get more poor friends to see how the system really works for them."

Not to mention stuff like...my dad has had a one-man small business for twenty-something years. It's construction-related, so needless to say, times right now are not exactly great, and last month my brother and I both had to front him about a couple-grand each, because if we didn't, the bank would be knocking on the door within a week. It's not the first time this has happened in the last year.

So, you want to know what really pisses me off? The fact that before I can help my own father, I first have to pay for every BS government program that do-gooder busybodies like MNG dream up, just so they can get off on pontificating about how very moral they are. Frauds.

What happens a few months down the road when we don't have enough to make it work anymore? Does somebody have a nice fat bailout for him? Nope...he'll just lose everything and end up living with me. I have absolutely no problem with that, but I can't even imagine how damned dignified he's going to feel about the situation.

[Neu Mejican]

josey,

Your father is lucky to have you. Not everyone in a similar situation has similar supports. They are the ones for which safety nets were designed. Your father, btw, would qualify for many of these same supports to help him avoid the indignity of moving in with his kids, if he should so desire. He may not be big enough to get a "bailout," but he is exactly the kind of business that the stimulus is intended to help out. How effective that stimulus will be is, of course, debatable.

[Danny]

Neu,

I'd give money to charity if I wasn't already giving so much through the government. Instead of me giving it to somebody I know deserves it, I'm forced to trust that it's being distributed equitably. Of course, reading threads like this are what leads me to apathy instead of a true joy of helping out my fellow man. Besides, even though my books are balanced, I'm still trying to get my own safety net before I commit to being somebody else's.

[josey]

Neu,

He's not lucky to have us; that's just how things are done. And you apparently have no grasp of how much more demeaning your solution would be - it has absolutely nothing to do with the actual situation of living with your kids - that is just the physical reality that bears witness daily to the demise of the one thing you've poured every ounce of your soul into. And believe me, you have no safety net for that. I will do everything in my power to prevent that, but if it doesn't end up being enough, then you can bet I'm going to remember every thin dime that was taken by the dictatorship of the minority that is this government.

People justify this in a myriad of ways, but for us, the fact always remains: we never asked for help; we never wanted it, we will never accept it, and above all, our participation was never requested. We wonder daily, why people cannot be let alone who wish to be?

As someone else once put it:

"It is for no particular item in the tax bill that I refuse to pay it. I simply wish to refuse allegiance to the State, to withdraw and stand aloof from it effectually."

Principle is one thing, but in reality I'm not even that extreme; government can be a very efficient way to get alot of things done. I would hardly object at all if many of the programs which are compulsory today instead operated on a opt-in voluntary basis.