What is "Middle Class?"

[Rick Lee]

Originally Posted by Shaun 84 Targa

Rick, I don't understand your post as it relates to mine.

if you are in the 20% that has both the time and knowledge, great! I recommended a proficiency class and test that would allow you to opt out of the government-run program.

I don't understand why you posted what you did. Please explain.

Do I really need to explain? You're suggesting that soc. sec. is both justified and necessary because, left to their own devices, Americans are too stupid to handle retirement planning. Do you think the fed. gov't. has done a better job than the dumbest American could do? I don't.

Why doesn't the gov't. have to pass a competency test? It's my money to begin with! You think I should have to prove to you or someone else that I can manage it better in order for it to not be stolen? Unreal.

[Shaun @ Tru6]

Originally Posted by Rick Lee

Do I really need to explain? You're suggesting that soc. sec. is both justified and necessary because, left to their own devices, Americans are too stupid to handle retirement planning. Do you think the fed. gov't. has done a better job than the dumbest American could do? I don't.

Why doesn't the gov't. have to pass a competency test? It's my money to begin with! You think I should have to prove to you or someone else that I can manage it better in order for it to not be stolen? Unreal.

You are wrong on the first part and reality bears that out. You will see that clearly when Matt puts together the reconciliation. So yes, 80% of Americans would do worse than the government given knowledge, sophistication, time and desire constraints. In this number is people who just don't want to manage their lifetime investment portfolio's. I haven't even included graft and corruption in this percentage, which is a guarantee.

You are wrong here again. yes, you have to pass a test, because as I said, the alternative will cost the taxpayers more than just leaving it alone. We only need to look at the housing crisis bailout to support this thesis. The average American is not qualified to manage a lifetime portfolio. If you are, my plan takes care of you.

[cashflyer]

A few years ago I was finally earning enough that I could make my house payments AND buy a used car without financing it. I felt like I had finally reached "middle class".

[onewhippedpuppy]

Shawn seems to be dodging my suggestion, instead operating on the assumption that every American would invest their SS money in Enron stock.

Shawn, right now my money is essentially an IOU. You're saying that I could somehow do worse? Furthermore, what qualifies YOU to tell ME what I do with my money?

[Burnin' oil]

The whole concept of "social security" showes how effed up this society is. The government is TAKING our money and we're debating whether Americans are smart enough to manage their own finances. Holy cow. It's like Thom says, it is a tax.

[bivenator]

I can't imagine a scenario in which the benefits of the current SS situation would outstrip a complete overhaul and allow the taxpayer a say in the matter. Unfathomable how you want to turn it over to a govt entity that has repeatedly screwed the pooch.

[Rick Lee]

Originally Posted by Shaun 84 Targa

If you are, my plan takes care of you.

Talk about a cure that's worse than the disease!

Why should my failure cost the taxpayers a dime? No one should be responsible for me but me.

[Shaun @ Tru6]

Originally Posted by onewhippedpuppy

Shawn seems to be dodging my suggestion, instead operating on the assumption that every American would invest their SS money in Enron stock.

Shawn, right now my money is essentially an IOU. You're saying that I could somehow do worse? Furthermore, what qualifies YOU to tell ME what I do with my money?

What suggestion is that Matt? You made a statement against my original and I proved you wrong. I can't go back and forth forever on this.

What qualifies me? Nothing other than I will have to pay more if you fail, for whatever reason. that is why you need to take a class which would cover everthing from types of investment vehicles all the way to due diligence techniques to avoid being taken.

You see Matt, when investment vehicles that are created that are so sophisticated that even top investment professionals don't understand them (mortgage backed securities) and the result is huge, long-time investment banks going under as well as institutions like Fannie Mae and Freddie Mac are close to insolvency, resulting in massive government bailouts paid for by you and me, that is my proof that the average American would fail in managing their lifetime portfolios. of course the massive credit card debt and living beyond their means of most Americans is the final nail in the coffin.

If deregulated and privatized, overnight you would see an entire industry of exotic investment vehicles that would result in ruining the country's economy.

But don't take my word for it, just look at reality.


When will you have the reconciliation ready? Rick will need it.

[Shaun @ Tru6]

Originally Posted by Burnin' oil

The whole concept of "social security" showes how effed up this society is. The government is TAKING our money and we're debating whether Americans are smart enough to manage their own finances. Holy cow. It's like Thom says, it is a tax.

There's no debate, the vast majority is not, and as you say, the proof is in Americans allowing it to happen. Clearly they are too stupid to manage their own finances.

The real debate is whether the government should take it in the first place. That's an honest discussion.

[onewhippedpuppy]

Originally Posted by Shaun 84 Targa

What suggestion is that Matt? You made a statement against my original and I proved you wrong. I can't go back and forth forever on this.

Point out to me your proof, please. Perhaps I fall in the 80% that you look down on?

What qualifies me? Nothing other than I will have to pay more if you fail, for whatever reason. that is why you need to take a class which would cover everthing from types of investment vehicles all the way to due diligence techniques to avoid being taken.

Why? I grew up poor, and up until recently have struggled to make ends meet. Did I send YOU a bill? Why do you assume that the taxpayers should have to take care of those that fall on their faces?

You see Matt, when investment vehicles that are created that are so sophisticated that even top investment professionals don't understand them (mortgage backed securities) and the result is huge, long-time investment banks going under as well as institutions like Fannie Mae and Freddie Mac are close to insolvency, resulting in massive government bailouts paid for by you and me, that is my proof that the average American would fail in managing their lifetime portfolios.

Did you even read my post? WTF are you talking about? I suggested a program consisting of mutal funds, CDs, and bonds.

If deregulated and privatized, overnight you would see an entire industry of exotic investment vehicles that would result in ruining the country's economy.

You mean like the "exotic" Waddel & Reed ROTH IRAs that my wife and I have. Gasp!

But don't take my word for it, just look at reality.

Either you just don't read, or are simply seeing what you want to see.

[Rearden]

Originally Posted by Rick Lee

Do I really need to explain? You're suggesting that soc. sec. is both justified and necessary because, left to their own devices, Americans are too stupid to handle retirement planning. Do you think the fed. gov't. has done a better job than the dumbest American could do? I don't.

Why doesn't the gov't. have to pass a competency test? It's my money to begin with! You think I should have to prove to you or someone else that I can manage it better in order for it to not be stolen? Unreal.

Unreal indeed.
Even a chipmunk is smart enough to store some nuts away for later. But I guess if the government did it for him long enough, he'd too be as dumb as Shaun's average American.

[Shaun @ Tru6]

Originally Posted by Rearden

Unreal indeed.
Even a chipmunk is smart enough to store some nuts away for later. But I guess if the government did it for him long enough, he'd too be as dumb as Shaun's average American.

Chipmunks are, but American's aren't.

Why don't you go and find the rate at which American's are saving $ over the last 50 years. That graph will give you the answer you don't want.

[The Gaijin]

Originally Posted by stevepaa

The brunt would be carried by the rich, and I catagorize >1M/yr as rich.

Oh, the rich. Yes, let's soak them. Take as much as we can. I mean - just because they take risks, employ people and already pay so much - they can afford to pay lots more. Lots.

And it is only democratic. We out number them, out vote them and they need to do what we say.

[Shaun @ Tru6]

Originally Posted by onewhippedpuppy

Either you just don't read, or are simply seeing what you want to see.

Read what Matt? What am I missing?

How are you coming along with the reconciliation of housing crisis, massive credit card debt, no savings against Americans are smart enough/have time enough to manage lifetime investment.

I believe you were in the forefront of chastising all those millions of Americans who took out ARMs and can't pay them back. Your intellectual dishonesty in chastising that group of average Americans and then saying average Americans do have the smarts, time, sophistication, desire to manage their own portfolios is staggering.

Just admit you were wrong and move on. I don't have time to keep telling you so.

[onewhippedpuppy]

That will work out well when "the rich" and "rich corporations" fire employees and move their operations (and their money) overseas. I've never gone to work for a poor man.

Shawn, I'm still waiting on your proof that the average American can't choose from a list of mutual funds, CDs, and bonds. Personally, it took me about 20 minutes to go through a book and choose several funds.

Yes, I think people the took out IO mortgages and ARMs are idiots. I also think they should pay for their mistakes. But offering a variety of approved options for investment of SS is nearly foolproof.

[Shaun @ Tru6]

personal savings rate

http://blog.mariah.com/2008/04/understanding-the-personal-savings-rate/

truly a nation of big brains.

[onewhippedpuppy]

Originally Posted by Shaun 84 Targa

Read what Matt? What am I missing?

How are you coming along with the reconciliation of housing crisis, massive credit card debt, no savings against Americans are smart enough/have time enough to manage lifetime investment.

I believe you were in the forefront of chastising all those millions of Americans who took out ARMs and can't pay them back. Your intellectual dishonesty in chastising that group of average Americans and then saying average Americans do have the smarts, time, sophistication, desire to manage their own portfolios is staggering.

Just admit you were wrong and move on. I don't have time to keep telling you so.

Originally Posted by Shaun 84 Targa

personal savings rate

http://blog.mariah.com/2008/04/understanding-the-personal-savings-rate/

truly a nation of big brains.

By the way, you're well over the line into self-rightous. I'm pretty sure your clothing companies (current/past) aren't sparring with Nike for market share, so perhaps you need to reassess your ability to look down on others. "Let he who is without sin cast the first stone...." There are many Americans that would fit into your 80% stereotype with savings accounts that easily rival you or I.

[Seahawk]

Shaun is right and wrong. The cure for our abysmal savings rate is not SS, which is clearly broken and managed at the whim of politicians, always a disaster.

Interesting in that the current state of financial malaise in this country can be traced to the development of the nanny-state, the great society. I'd also add a dash of Ad Men as well.

How to fix it?

First, simplify the tax code. I'm a flat tax guy but many here are not, but we still have got to simplify.

Second, privatize SS along sound financial planning tenants. It is clear to me that many Americans have no interest in their financial future. I would cut the mandatory withholds in half to make the folks like me (who understand the really simple and basic tenants of financial planning and who may never see a dime of their SS "investment")) somewhat pleased and put the other half in sound, basic, get me 3% compound interest for 50 years investments.

Third. All private investments would be off budget, meaning they are not counted anywhere in the federal budget. Period. Gone.

Fourth. The money in the private accounts can not be used for any investment other than simple interest. No risk, lots of gain as the miracle of compound interest takes hold.

Fifth. No lump sum buyout at 65 unless you have $2M in personal funds accrued. One should be rewarded for sound financial planning and should have access to their funds.

Sixth. On the sixth day, I rest

[tc-sacto]

Well the government already runs a plan similar to a 401k. The TSP(thrift savings plan) 5 individual index fund choices and 5 lifcycle choices. Why not expand this type of offering to include your social security? I don't see that this program is wrought with corruption. My father, not a genious investor, has done fine buy simply putting half his money into the S&P500 option and half into the goverment bond fund.

[Seahawk]

Originally Posted by tc-sacto

Well the government already runs a plan similar to a 401k. The TSP(thrift savings plan) 5 individual index fund choices and 5 lifcycle choices. Why not expand this type of offering to include your social security? I don't see that this program is wrought with corruption. My father, not a genious investor, has done fine buy simply putting half his money into the S&P500 option and half into the goverment bond fund.

My Wife is an engineer with the government and we invest in the TSP at the maximum rate...love it long time.

Excellent solution...I should have thunk it.