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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: Amy J who wrote (212695)	12/5/2004 9:17:54 AM
From: RetiredNow	Read Replies (1) \| Respond to of 1573352

Amy, that is the big misconception of Bush's proposal. He is NOT stealing from the 15% to fund the private part. What he is doing is lowering your long term payout in order to fund the short term diversion of funds to the privatized portion. The net benefit will be to eventually privatize all of social security in order tag every dollar you put in to benefits that will be paid out to you. This will eliminate the governments unfunded SS obligations, as well as to provide the recipients of privatization a larger retirement. It is a win-win. Let me make this simple for you. Let's say I'm the gov't and I owe you $100 payable at 2% interest per year for 5 years. If I start to pay you this year, I will have to pay you $21.22 per year for 5 years (= $106.10) to fulfill my obligation to you. However, if I decided to pay you $10 right away, that would reduce my payments to you to $19.10 per year for 5 years = $95.50. For the gov't, this is a financial net of zero, because either way, I have to pay you what I owe you and the time value of money states that both of these payment plans cost the gov't the same. However, for you this has tremendous implications. You can take the $10 the gov't paid you up front and invest that at 7%. At the end of the 5 years, that $10 will have grown into $14.03 at 7%, versus the $11.04 at the typical 2% gov't rate. So you win by investing smarter than the gov't does and the gov't wins because they've taken steps towards full privatization to get out of the social security ponzi-scheme business. An even better plan would be for the gov't to let you and I opt for a 100% privatization of the funds we pay into the system. This would mean the gov't owes you and I nothing and 100% of our contribution could be invested at 7% (or more, if you want to get more aggressive). The only flaw in this plan is that as everyone knows, yours and my SS contributions are NOT tagged to our SS #. In other words, we are paying for people who are retired already. So to overcome this problem, the gov't needs to calculate what it would take to fund all current retirees and then sell debt to cover the unfunded portion, which by some estimates is around $10 trillion currently. It's debt that is already owed, it's just that no one wants to admit it yet. So I say, let's admit it, declare it, and fund it through debt. BUT FOR YOURS AND MY GENERATION'S SAKE LET US SAVE FOR OUR OWN RETIREMENT! LET US GET OUT OF THIS IRRESPONSIBLE PONZI-SCHEME CALLED SOCIAL SECURITY.

To: Amy J who wrote (212695)	12/5/2004 1:07:59 PM
From: Road Walker	Read Replies (3) \| Respond to of 1573352

Amy, re: How's that? Not bad... but there are a few things that i really don't understand about your generations. "(No one from my generation believes for a second they'll even see a penny of their SS" I really don't understand this cynicism. I've paid into SS my whole life, and I've always expected to get the benefits. Why is your generation so cynical? re: Why not create a matching contribution - so people have the incentive to save for themselves? I work for a company that matches 401K contributions. NONE, literally NONE of the young people contribute. I've taken it upon myself to convince them of the wisdom of this, to no effect. Even going to far as saying "give me a $20 and I'll give you back $40"... no effect. What's up with that?!? I'm just not sure a voluntary system works. And if it doesn't work, when your generation retires, things will be dire. In principle, I like the idea of privatization of SS. The best part is that you increase the savings rate in this country, which is critical, maybe even in crisis. But we simply can't afford any more debt, which I think will become very obvious in the next several years (if not months). And, for some reason, younger folks can't seem to recognize a great deal when it slaps them in the face. John