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We already entrusted the govt. with our retirement funds. Its called Social Security. Yet there's nothing secure about it, and the govt. has spent a lot of that money in ways it was never intended to be spent. Then you want to put your other retirement funds in their hands also?
I am sure politicians are salivating at the idea of having another piggy bank to stick their dirty hands into and rob it blind. The issue is that some people never learn, regardless how many times they have gotten bitten by the wasps. The lure is just too great to the gullible.
The proposals I have seen for this idea do not give the government the piggy bank; they would just facilitate it so that employers would not have to. Our CFO often laments having to be in the investment and insurance business. Anyway, this would be different than SS as each individual would have a separate account with a balance determined solely by their contributions and account earnings; the money would actually be in the mutual fund. SS is not a piggy bank and never has been; the first people to collect never put a dime in and it has been a rolling system of contributions and payments ever since. The account balance is just an accounting treatment. If it runs short in 20 years or so it will be because the numbers don't balance out not because some account holding the money gets drained.
The proposals I have seen for this idea do not give the government the piggy bank; they would just facilitate it so that employers would not have to.
It's hard to discuss the issue on its own -- every little thing Feds get involved seems innocuous at first, innocent and well-intended. However, it just ends up being that power flows one-way, liberty of an individual is usurped by an increasingly omni-powerful Central Govt, which tells the individual how to do every thing. If not, then punishment is in order. Try skipping getting health insurance for example...
This notion of "people are stupid, and Federal Govt will think and act for them" -- it is still a condescending and tyrannical concept, after you skim off the shine -- "behavioral science, and all the other glitter.
Soon enough, we'll debate if Federal Govt will need to dictate how to blow our nose right.
But let's get to the nitty-gritty -- you think that lobbyists will not skew the Govt's process whichever way towards their side?
Gradually, there will be some sort of crisis that Govt will just have to step in, and take over. It has never not happened this way.
Remember, just because the money does not sit at the Federal Reserve, it does not mean the Govt does not control it.
Quote:
Originally Posted by ReachTheBeach
SS is not a piggy bank and never has been; the first people to collect never put a dime in and it has been a rolling system of contributions and payments ever since.
That's not the SS history. SS was created as a Trust Fund, but later politicians changed the law to allow SS surpluses to buy Treasury bonds (IOUs), which are backed by the "full faith and credit" of the US Govt.
So, as soon as SS runs a deficit (since 2009), it recalls its debt obligations, so Treasury pays. As long as Treasury pays, things are good, however, as revenue / payout gap increases, it will stress the Treasury.
Did you know that initially politician promised that SS Tax would never go higher than 3%? It didn't take them too long to reneg and claim "oh, but we only meant it temporarily"...
MyRA is a step in the right direction, but will not be available to all workers. It has been shown that having a retirement plan at work is a big factor in whether a worker saves anything. Having it taken out ahead of time you don't miss it. Too bad we are behind Singapore in this.
That's not the SS history. SS was created as a Trust Fund, but later politicians changed the law to allow SS surpluses to buy Treasury bonds (IOUs), which are backed by the "full faith and credit" of the US Govt.
So, as soon as SS runs a deficit (since 2009), it recalls its debt obligations, so Treasury pays. As long as Treasury pays, things are good, however, as revenue / payout gap increases, it will stress the Treasury.
Did you know that initially politician promised that SS Tax would never go higher than 3%? It didn't take them too long to reneg and claim "oh, but we only meant it temporarily"...
I am not sure we disagree except maybe on terms used and whatnot. What I was referring to is in this info at the SSA site:
There has never been any change in the way the Social Security program is financed or the way that Social Security payroll taxes are used by the federal government. The Social Security Trust Fund was created in 1939 as part of the Amendments enacted in that year. From its inception, the Trust Fund has always worked the same way.
...
But whether the Trust Funds are "on-budget" or "off-budget" is primarily a question of accounting practices--it has no effect on the actual operations of the Trust Fund itself.
Where it says:Anyway "Trust Fund" does not mean "piggy bank".
Comparison to SS is not valid either. SS was created as Social Insurance, as a retirement's safety net for poor, destitute, homeless seniors.
Nowadays, heck, even as a non-senior we have a safety net in-place. You can be 26 years old, go on welfare, food stamps, free housing, free cell phone, free transportation. Even Work requirement is no longer required.
When we talk about Automatic IRAs we are talking not about a safety net. They are about Govt guaranteeing a higher level of living. It's about a nanny state, where masterminds and bureaucrats get to decide your lifestyle choices.
When we talk about Automatic IRAs we are talking not about a safety net. They are about Govt guaranteeing a higher level of living. It's about a nanny state, where masterminds and bureaucrats get to decide your lifestyle choices.
I don't think there is any guarantee mentioned. I see it as just making sure that people who are able to get decent wages are saving for retirement. There are freeloaders on assistance, but most are not. Over 75% of welfare recipients have one or more wage earners in the household but they aren't making enough to get by on. It would be silly to force those people to save because we would just have to turn around and give them more to get by.
I don't think there is any guarantee mentioned. I see it as just making sure that people who are able to get decent wages are saving for retirement. There are freeloaders on assistance, but most are not. Over 75% of welfare recipients have one or more wage earners in the household but they aren't making enough to get by on. It would be silly to force those people to save because we would just have to turn around and give them more to get by.
We have a safety net in-place for seniors. Are these IRAs for something above-and-beyond, or are these to replace the Safety Net?
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