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Old 12-19-2018, 12:44 AM
 
Location: Thailand
5,101 posts, read 2,430,450 times
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Ahh so now in maat55's own private accounting world something a bond is worthless because the issuer must pay it when redeemed from future earnings. Bonus = another reference to something being immoral from someone who dismisses putting a bunch of people into poverty as "feeling a pinch" and playing word games with the definition of poverty.

Keep 'em coming! Instant classics, every one of them.
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Old 12-19-2018, 03:20 AM
 
66,277 posts, read 67,496,775 times
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this whole discussion has become nonsense after a while .
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Old 12-19-2018, 02:09 PM
 
Location: Silicon Valley
2,999 posts, read 1,317,457 times
Reputation: 5420
Quote:
Originally Posted by maat55 View Post
There is no reason why everyone couldn’t just decide for themselves. It would not be difficult to have a mandatory system that had options. Mutual fund companies have numerous types of investments that include annuities, low risk funds and mixed funds. That fact that you are scared of what you don’t know isn’t a viable reason to force me into a system I despise.
Oh but there's a big reason. It's a pay as you go system...only the you stands for the Social Security Administration. With a 401K your set amount of money stays invested for a long period of time. For SSA, there are constant new inputs and drawdowns. The volatility will make investing that money harder and it will need to be coordinated. Because the income on the massive amount of capital in the program is generating low level gains, it will not be able to make enough to cover outflows. Worse, in our lifetime, the surplus will run out entirely.

What might be possible is for the SSA to stratify what their future payouts will be. They know our age and our estimated benefit payment. For money covering the next three years, perhaps that's placed in bonds. The remainder could be invested in various timeframes. That would give the surplus capital a chance to grow faster.

However, what will happen is that we won't change anything, the capital will run out and when we've got less than 3 years people will say, oh let's invest at the point where SSA will need the money too soon, and investment in anything beyond US bonds won't make sense.

If you asked me the best advice for money you have to have a year from now...then no I would not suggest putting it in the stock market. If you asked me the best advice for money you have to have 15 years from now, then I would suggest putting some in the stock market.

This is our last chance before there's simply no reasonable alternative, and it won't be for all funds, just the surplus.

Also, and I'm sure its been said before, but currently SSA must invest surplus in special US bonds. They do get interest. They do get paid. They just don't get paid enough to keep the system solvent if the population isn't ever growing fast enough.
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