American Savings Rate IS NOT ZERO

[blackjack007]

the most important thing we need to do to keep social security viable indefinitely is to actively tie the entitlement age to the cdc's life expectancy. when social security was first signed into law, the l/e was ~62 years. right now, the entitlement age should be in the mid 70s.

 

[NUTSNEAL]

Quote from nutmeg:

Not so fast guys. These could be the words of a university professor, not quite sure if it is economics or political science.

Yes, and no doubt a RANDOM WALK proponent as well!!!




I don't normally get to read or post during the day, but we have some system problems this moring and are SHUT DOWN!!!

DAMN!!!

 

[Mercor]

Quote from blackjack007:

the most important thing we need to do to keep social security viable indefinitely is to actively tie the entitlement age to the cdc's life expectancy. when social security was first signed into law, the l/e was ~62 years. right now, the entitlement age should be in the mid 70s.

In your chart it looks like the Black man get the shaft.

Most of his payments while he is working goes to support white people, who live longer.

Then when he dies the goverment keeps all his money. No help for his children. 100% estate tax, you might say.

 

[crgarcia]

Quote from gnome:

Duh... Social Security funds are not invested in ANYTHING... they're just siphoned-off by the Congress... "'cause we ain't using the money right now anyhow"..

Isn't it "invested" in T-Bonds?
I seem to recall that it is, I'm I missing something?

 

[lassic]

Quote from crgarcia:

Isn't it "invested" in T-Bonds?
I seem to recall that it is, I'm I missing something?

yeah, put who has to pay interest and principle, the Gov.

debt becomes asset, asset becomes debt

its like i have $10 and want to borrow it, so i pay $15 to borrow $10 from myself

gooberment accounting

 

[AlpineTrout]

Quote from piezoe:

A second critically important aspect, and the one that makes it impossible to substitute private investment plans for social security, are the many Americans at the low end of the wage scale who would be unable to fund a low-risk, private retirement sufficiently to guarantee even a minimal subsistence upon retirement.

Take a look at this far superior plan, that the folks down in Galveston, TX have. My wife got to opt out of SS and contributes to a similar plan in Georgia. In the end, though, she'll get screwed by SS, since she won't get back most of what she put into SS when she was younger.

Depending on salary, the Galveston's plan monthly benefit can be up to 3x or more than SS.

http://www.ncpa.org/pub/ba/ba514/

 

[Arnie]

I can't believe the ignorance on this board. SS funds are not invested in anything, for all intents and purposes, they go straight into the general fund, after paying current beneficiaries. Right now we are running a surplus in SS taxes. That will soon become a deficit in the 10-20 years, if not sooner.

Why do you think administrations and courts since Carter have turned a blind eye to illegal immigration? Those immigrants are solving a very big problem we have going forward.....a much reduced birth rate.

Regarding the much publicized "savings rate". Its doesn't measure savings at all. It is simply current income minus current spending. Look it up.

 

[heypa]

Piezoe.... I will not try to teach you demographics. Simple logic says that if the ratio of working(payers) vs retired(those being paid) declines toward zero sooner or later the tax burden becomes too great. No amount of tweaking will negate this result.

 

[ptunic]

Quote from Arnie:

SS funds are not invested in anything, for all intents and purposes, they go straight into the general fund, after paying current beneficiaries.

Yup. The system is a pay-go system. Current taxpayers pay for current retirees. Thus there is zero savings and zero investment. This is one of the biggest things that hurt the US economy the last few decades; the main retirement program contributes zero to savings (and also makes people feel more secure so private savings are less too).

Without sufficient savings, you either invest through borrowing (debt), which is unsustainable and slowly transfers your ownership, and/or you reduce true investment. If the % of investment (capital spending) is reduced for an economy, in the long run it leads to lower productivity growth and thus lower standard of living growth. Both of these outcomes are bad, and both are what has happened / is happening.

It is no coincidence that in China the savings rate is close to 50%, and their standard of living has been skyrocketing for decades.. it is directly related (though there are many other factors, primarily better property rights and liberalization of international trade).

 

[Sam Mcgee]

Quote from blackjack007:

the most important thing we need to do to keep social security viable indefinitely is to actively tie the entitlement age to the cdc's life expectancy. when social security was first signed into law, the l/e was ~62 years. right now, the entitlement age should be in the mid 70s.

Here, look at this, the problem of not having enough money for everyone for retirement is solved. Somebody must have planned this:

http://www.infoniac.com/health-fitness/life-expectancy-american-women-falls-significantly.html

We need to do the same thing here in Canada. I notice whenever I go to the United States, they have signs at Customs forbidding anyone from bringing fruits and vegetables. I think Canada should have the same policy, stop letting healthy food into the country so we can reduce the number of old people we have to support.