I understand the very simple concept of declining birth rates. Is that your response? You think it will fail because of declining birth rates? Or you want it to fail because it will show the insolence of the government or lack of foresight? Or you want people to pay into a private system (because those hedge fund managers have such a great track record of managing money, right)?Jay wrote:
Because the system was designed as a pyramid back when people were having four or five kids. We're entering a situation where there are a lot less people supporting each retiree. My grandparents had seven kids, they have 13 grand children and one great grand child. Just using my family as an example, they currently have 19 people paying into the social security system that they draw from. When my own parents retire, they'll have their four sons paying into the system. Assuming we have replacement size families, and my parents live long enough, there will be 12 people paying in rather than 19. 12 people for 3 instead of 19 for 2. This is but one example. If we're going to keep the system, our payments into it are going to have to double.KEN-JENNINGS wrote:
What makes you think the government won't inject more money into it like they have done in the past? Why assume it will just fail? You realize you're just conceptualizing a doom-and-gloom scenario, right?Jay wrote:
That's cool. I'm scheduled to start drawing payments from the system in 2048. Guess I'm shit out of luck eh? Fuck baby boomers.
We can also nominate to have a larger percentage of our pre-tax income to go into our super. I do, and it means I'll get back quite a bit more come retirement.Jay wrote:
Your system is far superior to our own. It's essentially a compulsory 401k plan. You pay in, it earns interest, you take out. We pay in, no interest accrues and it goes out.Jaekus wrote:
So glad we have a compulsory superannuation system in Australia.
So hope I have enough in there by the time I retire.
The Government is planning on increasing the minimum compulsory amount, when they do I'll adjust how much I pay once more.
The only threat the scheme ever faces, is having the age at which you can access the money rise to meet the aging population of baby boomers.
Out of interest how much extra do you put in, percentage wise? Also is that scheme still in place where if you contribute a minimum of $1,500 a year voluntarily the government adds in an extra $1,500?
Last edited by Jaekus (2012-11-27 18:21:09)
Because it's a terrible program. I'd rather keep the money I pay in every month and invest it myself. If I got to keep that extra $300/mo, invest it at 5% annual for the next 30 years I would have $250k. Will I get that back from Social Security? Doubtful. Today, retirees receive $1,186/mo. Divide that 250k by that payment and you get 17.5 years. So I'd have to live until 84.5 to break even.KEN-JENNINGS wrote:
It goes into a general fund - this is what I wanted you to say. I understand it is never saved, never invested, etc. What I'm trying to understand is why you think for some reason in 2048 you won't get the money you put in even though there's no evidence it will happen, in fact historical precedent for it NOT happening.Jay wrote:
A portion of your paycheck is taken out every pay cycle. It is taken by the government and they cut checks to current retirees. The rest gets tossed into the general fund and is spent. There is no SS bank account. There is no trust. If you cut out the middleman and cut the check directly to your retired grandparents there would be no difference. When you reached retirement age, if your working aged kids and grandkids set aside a portion of their pay and mailed it to you every month on the first, it would be equivalent. The money that we have drawn from us by the government every month is never saved, never invested, it is a pure transfer system. Taking from one and giving to another. In this case it is taking from workers and giving it to retirees.KEN-JENNINGS wrote:
How so?
Personally, I have no problem paying into a guaranteed government retirement program - I'm either going to pay for it on the front end or I'm going to pay for it on the back end (through welfare and other increased costs because people can't/won't/don't want to save for retirement). At least I know I will be getting money back for what I put in (and in a lot of cases, MORE than I put in). It's surely not the best way to go about it, and I would like to see proper accounting set up across the board for government spending. I wonder why people single out social security out of all government programs when there are accounting and spending issues in virtually every piece of that pie.
"Ah, you miserable creatures! You who think that you are so great! You who judge humanity to be so small! You who wish to reform everything! Why don't you reform yourselves? That task would be sufficient enough."
-Frederick Bastiat
-Frederick Bastiat
I want people to take responsibility for their own lives instead of depending on the government to take care of them. I don't care if they park their money in a bank account or if they deposit it with a hedge fund or bury it in their backyard. They should be responsible for their own retirement. As I said on the previous page after I posted that chart, we don't have a culture that would survive in the system I want. People are not thrifty. They do not save. They are told to spend, spend, spend at every turn. Social security would die on its own if our culture changed, as it would be redundant. I don't expect it to be repealed during my lifetime unless we go bankrupt. There are too many idiots that depend on it to bail them out of bad life decisions when they retire.KEN-JENNINGS wrote:
I understand the very simple concept of declining birth rates. Is that your response? You think it will fail because of declining birth rates? Or you want it to fail because it will show the insolence of the government or lack of foresight? Or you want people to pay into a private system (because those hedge fund managers have such a great track record of managing money, right)?Jay wrote:
Because the system was designed as a pyramid back when people were having four or five kids. We're entering a situation where there are a lot less people supporting each retiree. My grandparents had seven kids, they have 13 grand children and one great grand child. Just using my family as an example, they currently have 19 people paying into the social security system that they draw from. When my own parents retire, they'll have their four sons paying into the system. Assuming we have replacement size families, and my parents live long enough, there will be 12 people paying in rather than 19. 12 people for 3 instead of 19 for 2. This is but one example. If we're going to keep the system, our payments into it are going to have to double.KEN-JENNINGS wrote:
What makes you think the government won't inject more money into it like they have done in the past? Why assume it will just fail? You realize you're just conceptualizing a doom-and-gloom scenario, right?
"Ah, you miserable creatures! You who think that you are so great! You who judge humanity to be so small! You who wish to reform everything! Why don't you reform yourselves? That task would be sufficient enough."
-Frederick Bastiat
-Frederick Bastiat
Why would you pay more into the system instead of doing private investments?AussieReaper wrote:
We can also nominate to have a larger percentage of our pre-tax income to go into our super. I do, and it means I'll get back quite a bit more come retirement.Jay wrote:
Your system is far superior to our own. It's essentially a compulsory 401k plan. You pay in, it earns interest, you take out. We pay in, no interest accrues and it goes out.Jaekus wrote:
So glad we have a compulsory superannuation system in Australia.
So hope I have enough in there by the time I retire.
The Government is planning on increasing the minimum compulsory amount, when they do I'll adjust how much I pay once more.
The only threat the scheme ever faces, is having the age at which you can access the money rise to meet the aging population of baby boomers.
"Ah, you miserable creatures! You who think that you are so great! You who judge humanity to be so small! You who wish to reform everything! Why don't you reform yourselves? That task would be sufficient enough."
-Frederick Bastiat
-Frederick Bastiat
Because the government is more reliable than the stock market. Simple stuff.
poor extra medium cant even talk in his own thread
_______________________________________________________________________________________________ 
Macbeth wrote:
Because the government is more reliable than the stock market. Simple stuff.
Looks pretty good to me.
"Ah, you miserable creatures! You who think that you are so great! You who judge humanity to be so small! You who wish to reform everything! Why don't you reform yourselves? That task would be sufficient enough."
-Frederick Bastiat
-Frederick Bastiat
You can not access it until you retire so it's a forced saving for starters.Macbeth wrote:
Because the government is more reliable than the stock market. Simple stuff.
Personal contribution just gets taken out of your pay along with the compulsory 9% employer contribution (which is 9% in addition to your pay) and the % you choose of your pay is taken out before tax AFAIK (salary sacrifice for example). There are limits how much to can contribute though or you will be taxed AFAIK. Also, the government will add in extra if you contribute above a certain threshold. I'm no expert and my have the details slightly askew but that's the gist of it.
Your own investment into a non-super fund is a post tax contribution to start with and you are further taxed on the earnings made. You can choose whatever amount you want to invest of course.
Right, it's a 401k with a larger employer contribution.Jaekus wrote:
You can not access it until you retire so it's a forced saving for starters.Macbeth wrote:
Because the government is more reliable than the stock market. Simple stuff.
Personal contribution just gets taken out of your pay along with the compulsory 9% employer contribution (which is 9% in addition to your pay) and the % you choose of your pay is taken out before tax AFAIK (salary sacrifice for example). There are limits how much to can contribute though or you will be taxed AFAIK. Also, the government will add in extra if you contribute above a certain threshold. I'm no expert and my have the details slightly askew but that's the gist of it.
Your own investment into a non-super fund is a post tax contribution to start with and you are further taxed on the earnings made. You can choose whatever amount you want to invest of course.
"Ah, you miserable creatures! You who think that you are so great! You who judge humanity to be so small! You who wish to reform everything! Why don't you reform yourselves? That task would be sufficient enough."
-Frederick Bastiat
-Frederick Bastiat
Has anyone bothered to look into the possibility that the fiscal cliff may actually make us all better off?
It is universally agreed that it won't.
My question - "What I'm trying to understand is why you think for some reason in 2048 you won't get the money you put in even though there's no evidence it will happen, in fact historical precedent for it NOT happening."Jay wrote:
Because it's a terrible program. I'd rather keep the money I pay in every month and invest it myself. If I got to keep that extra $300/mo, invest it at 5% annual for the next 30 years I would have $250k. Will I get that back from Social Security? Doubtful. Today, retirees receive $1,186/mo. Divide that 250k by that payment and you get 17.5 years. So I'd have to live until 84.5 to break even.KEN-JENNINGS wrote:
It goes into a general fund - this is what I wanted you to say. I understand it is never saved, never invested, etc. What I'm trying to understand is why you think for some reason in 2048 you won't get the money you put in even though there's no evidence it will happen, in fact historical precedent for it NOT happening.Jay wrote:
A portion of your paycheck is taken out every pay cycle. It is taken by the government and they cut checks to current retirees. The rest gets tossed into the general fund and is spent. There is no SS bank account. There is no trust. If you cut out the middleman and cut the check directly to your retired grandparents there would be no difference. When you reached retirement age, if your working aged kids and grandkids set aside a portion of their pay and mailed it to you every month on the first, it would be equivalent. The money that we have drawn from us by the government every month is never saved, never invested, it is a pure transfer system. Taking from one and giving to another. In this case it is taking from workers and giving it to retirees.
Personally, I have no problem paying into a guaranteed government retirement program - I'm either going to pay for it on the front end or I'm going to pay for it on the back end (through welfare and other increased costs because people can't/won't/don't want to save for retirement). At least I know I will be getting money back for what I put in (and in a lot of cases, MORE than I put in). It's surely not the best way to go about it, and I would like to see proper accounting set up across the board for government spending. I wonder why people single out social security out of all government programs when there are accounting and spending issues in virtually every piece of that pie.
Your answer - "Because it's a terrible program."
I want people to take responsibility for their own lives too. I guess my idealism is that government will take care of the people, whereas your idealism is that people will take care of themselves. We can point to reasons while both are insanely idealistic. My solution (paying into social security) at least provides a safety net of sorts. Your solution is to let people fall flat on their face when they inevitably do not save (as you mention). Once they don't save, you'll be footing their bills through increased premiums on health insurance, expanded benefits from welfare/medicaid, etc. Either way you have to pay for them. Or the alternative is to let people who don't/can't/won't save to rot in the gutter. I'm not down with that.Jay wrote:
I want people to take responsibility for their own lives instead of depending on the government to take care of them. I don't care if they park their money in a bank account or if they deposit it with a hedge fund or bury it in their backyard. They should be responsible for their own retirement. As I said on the previous page after I posted that chart, we don't have a culture that would survive in the system I want. People are not thrifty. They do not save. They are told to spend, spend, spend at every turn. Social security would die on its own if our culture changed, as it would be redundant. I don't expect it to be repealed during my lifetime unless we go bankrupt. There are too many idiots that depend on it to bail them out of bad life decisions when they retire.KEN-JENNINGS wrote:
I understand the very simple concept of declining birth rates. Is that your response? You think it will fail because of declining birth rates? Or you want it to fail because it will show the insolence of the government or lack of foresight? Or you want people to pay into a private system (because those hedge fund managers have such a great track record of managing money, right)?Jay wrote:
Because the system was designed as a pyramid back when people were having four or five kids. We're entering a situation where there are a lot less people supporting each retiree. My grandparents had seven kids, they have 13 grand children and one great grand child. Just using my family as an example, they currently have 19 people paying into the social security system that they draw from. When my own parents retire, they'll have their four sons paying into the system. Assuming we have replacement size families, and my parents live long enough, there will be 12 people paying in rather than 19. 12 people for 3 instead of 19 for 2. This is but one example. If we're going to keep the system, our payments into it are going to have to double.
Yes, people need to realize they can't spend and spend and exist on credit. However, in my opinion that's an unfortunate, ugly byproduct of a high-standard of living, consumer-driven capitalist society. You can't have your cake (capitalism without a conscience) and eat it too (leave people rotting in the gutter because they can't/won't/don't save). As far as business is concerned, we exist to buy stuff.
I know some economists that would say there is a possibility that increased confidence that the deficit is under control will at least partially offset the negative effects on economic growth from decreasing government spending and higher taxes. No one wants to pay higher taxes and everyone wants the government to spend on their programs, but we can't have both low taxes and lots of government spending, in fact, we probably can't have either. Some of the things that would happen would probably do much more harm than good, but as a whole, I can't really see a much better option.Macbeth wrote:
It is universally agreed that it won't.
It would send us into a short term recession and make us better off in the long run fiscally.Narupug wrote:
I know some economists that would say there is a possibility that increased confidence that the deficit is under control will at least partially offset the negative effects on economic growth from decreasing government spending and higher taxes. No one wants to pay higher taxes and everyone wants the government to spend on their programs, but we can't have both low taxes and lots of government spending, in fact, we probably can't have either. Some of the things that would happen would probably do much more harm than good, but as a whole, I can't really see a much better option.Macbeth wrote:
It is universally agreed that it won't.
"Ah, you miserable creatures! You who think that you are so great! You who judge humanity to be so small! You who wish to reform everything! Why don't you reform yourselves? That task would be sufficient enough."
-Frederick Bastiat
-Frederick Bastiat
My prediction is that they'll pass Simpson-Bowles before it's too late.Narupug wrote:
Has anyone bothered to look into the possibility that the fiscal cliff may actually make us all better off?
Doubtful. There's a lot of tax cuts in there and (D)'s are in power.Spearhead wrote:
My prediction is that they'll pass Simpson-Bowles before it's too late.Narupug wrote:
Has anyone bothered to look into the possibility that the fiscal cliff may actually make us all better off?
"Ah, you miserable creatures! You who think that you are so great! You who judge humanity to be so small! You who wish to reform everything! Why don't you reform yourselves? That task would be sufficient enough."
-Frederick Bastiat
-Frederick Bastiat
Saw the CBO report on it yesterday. Fiscal cliff would drive two quarters of negative growth, one quarter of minimal growth, and upwards of 3% in the fourth quarter.Jay wrote:
It would send us into a short term recession and make us better off in the long run fiscally.Narupug wrote:
I know some economists that would say there is a possibility that increased confidence that the deficit is under control will at least partially offset the negative effects on economic growth from decreasing government spending and higher taxes. No one wants to pay higher taxes and everyone wants the government to spend on their programs, but we can't have both low taxes and lots of government spending, in fact, we probably can't have either. Some of the things that would happen would probably do much more harm than good, but as a whole, I can't really see a much better option.Macbeth wrote:
It is universally agreed that it won't.
"Grand bargain" would put us at pretty much zero growth first quarter, then ramp up to roughly 3% in the fourth.
No fiscal cliff and no "grand bargain" option shows roughly 3% growth each quarter...lower in the first couple, in line with the other options by the fourth.
So basically, regardless of what's done, our GDP should be at 3% growth by Q4CY13, if the CBO projections can be trusted.
What I would really like to see would be the longer-term impacts on deficit and debt under each scheme.
“Everybody is a genius. But if you judge a fish by its ability to climb a tree, it will live its whole life believing that it is stupid.”
― Albert Einstein
Doing the popular thing is not always right. Doing the right thing is not always popular
― Albert Einstein
Doing the popular thing is not always right. Doing the right thing is not always popular
Superannuation is awesome.Jaekus wrote:
You can not access it until you retire so it's a forced saving for starters.Macbeth wrote:
Because the government is more reliable than the stock market. Simple stuff.
Personal contribution just gets taken out of your pay along with the compulsory 9% employer contribution (which is 9% in addition to your pay) and the % you choose of your pay is taken out before tax AFAIK (salary sacrifice for example). There are limits how much to can contribute though or you will be taxed AFAIK. Also, the government will add in extra if you contribute above a certain threshold. I'm no expert and my have the details slightly askew but that's the gist of it.
Your own investment into a non-super fund is a post tax contribution to start with and you are further taxed on the earnings made. You can choose whatever amount you want to invest of course.
It depends on your income but gov will give you up to $500 if you personally contribute $500 for your super at the end of the financial year. Another thing with super it's just one giant savings account that banks can use to give out loans as well
Btw how does social security work? does everyone get the exact same monthly payment or do people get paid based on what they put in?
Lolmacbeth: gov is more stable than stock market. Tell that to the greeks.
Good luck getting 3 of those past the GOP, and good luck with the riots following the other one.Extra Medium wrote:
1. End the wars.
2. End the Bush tax cuts.
3. Completely cut Social Security but keep Medicare.
4. Reduce military spending by 15%.
What do you mean anyway?
Sack 15% of the military? Then you'd have to pay them dole, so really you'd have to sack 25% of them to see a 15% saving. Have fun with that.
Or are you going to tell everyone in the military they're getting a 15% pay cut tomorrow? Since they're presumably paying tax on their top 15% of income you'd have to cut their pay by, I dunno, 20% to see a 15% benefit. How would you react to a 20% pay cut?
Its easy to make glib statements if you're not concerned with the consequences. Its why CEOs and other business people make for bad politicians - they only ever see one side of their actions.
What choices does America really have?
Print (more) money?
Borrow (more) money? From the children of today's 'tax-payers' (net-receivers mostly)? The Chinese?
Raise taxes?
Cut spending?
America is accustomed to living well beyond its means, it should be facing Greek style austerity measures but has raised 'too big to fail' to a nation level.
Fuck Israel
Its a 401k with a compulsory minimum employer contribution and an optional employee contribution - which can be zero.Jay wrote:
Right, it's a 401k with a larger employer contribution.Jaekus wrote:
You can not access it until you retire so it's a forced saving for starters.Macbeth wrote:
Because the government is more reliable than the stock market. Simple stuff.
Personal contribution just gets taken out of your pay along with the compulsory 9% employer contribution (which is 9% in addition to your pay) and the % you choose of your pay is taken out before tax AFAIK (salary sacrifice for example). There are limits how much to can contribute though or you will be taxed AFAIK. Also, the government will add in extra if you contribute above a certain threshold. I'm no expert and my have the details slightly askew but that's the gist of it.
Your own investment into a non-super fund is a post tax contribution to start with and you are further taxed on the earnings made. You can choose whatever amount you want to invest of course.
Apart from that its identical....
There's the option of managing your fund yourself via a self-managed super fund - you can take your money with much a much lower tax take and put it all chocolate futures if you want.
The govt co-contribution is for low-earners and is being phased out.
I don't personally feel all that comfortable with most of my super fund going into the stock market.
Returns follow demographics and we're facing a demographic cliff in the western world - too many old people with huge entitlement expectations, not enough taxpayers, not enough capital to fund major works.
I'm not sure where you think your 5% annual return is coming from, the last 10 years of the stock market has returned nothing.
Last edited by Dilbert_X (2012-11-28 01:11:58)
Fuck Israel
somebody obviously doesn't know how the military works.Dilbert_X wrote:
Sack 15% of the military? Then you'd have to pay them dole, so really you'd have to sack 25% of them to see a 15% saving. Have fun with that.
.
The military doesn't work, thats the whole point.
Sack them, let the military reduce by natural attrition - unless the private sector makes up the gap its no win.
Sack them, let the military reduce by natural attrition - unless the private sector makes up the gap its no win.
Fuck Israel
Yes, because jobs are static. No one ever founds a small business and then hires others. The market tends to find a way to employ everyone that wants to work and isn't overly picky. I don't think people thrown out of the military would be picky.
"Ah, you miserable creatures! You who think that you are so great! You who judge humanity to be so small! You who wish to reform everything! Why don't you reform yourselves? That task would be sufficient enough."
-Frederick Bastiat
-Frederick Bastiat