On Mon, 24 Jan 2005 21:45:01 +0800, hamei wrote:

Ed Huntress wrote:

BTW, I here that your privatization of social security wound up sucking in a
major way. Is that right?


Now *there's* a good example of short memories. It couldn't
be but five years ago that the stock market tanked so bad
that every fool I knew lost about 2/3 of his/her "investment."
Now they're back to talk about 'privatizing' social security
again. These are people who'd put their dicks on the table
and hit them with rubber mallets every day of the week, just
to see if it hurt less on Friday than it did on Monday.

What's really funny is that they are using places where it
was tried, such as Chile, as shining examples of the
practice.
All covered workers had to place 10% (a tax hike from 7.5% ) of
all monthly earnings in the market. Then they had to pay a
"commission charge" on top of that.
Then there were "administrative costs" of about 3%
of **of average taxable earnings** (not investments).
"This is close to 30% of the 10% mandatory savings rate."

The brokers & swindlers got very rich indeed.

"The outcome of the same plan in Chile was devastating for the
working population" though.
AFAIK The government (and taxpayers) are still trying to
bail the mess out. It failed big time.

Meanwhile, back at the Texas ranch, this all seems to
be a plan to loot the social security *surplus* by the
neocons. Plus, they want two+ more TRILLION US dollars
in deficit spending to do it.
--
Cliff

"Cliff" wrote in message
news | On Mon, 24 Jan 2005 21:45:01 +0800, hamei wrote:

SNIP
| Meanwhile, back at the Texas ranch, this all seems to
| be a plan to loot the social security *surplus* by the
| neocons. Plus, they want two+ more TRILLION US dollars
| in deficit spending to do it.
| --
| Cliff

Kinda curious. What's the return on investment of your SSI? How much
have _you_ put in, and how much of it do you expect to get back?
On the other hand, what's the worst return on investment of a CD? Or
the average of a generic mutual fund over your lifetime?

It's the simple numbers that highlight the truths.

"carl mciver" wrote in message
ink.net...

"Cliff" wrote in message
news | On Mon, 24 Jan 2005 21:45:01 +0800, hamei wrote:

SNIP
| Meanwhile, back at the Texas ranch, this all seems to
| be a plan to loot the social security *surplus* by the
| neocons. Plus, they want two+ more TRILLION US dollars
| in deficit spending to do it.
| --
| Cliff

Kinda curious. What's the return on investment of your SSI?

It depends on how long he lives. It can range from a loss of "capital" to
one of the wildest rates of return you could get during the Internet bubble.
g

On the other hand, what's the worst return on investment of a CD? Or
the average of a generic mutual fund over your lifetime?

They suck. Furthermore, the extra level of "maintanence" fees that the
"approved" vendors are now salivating over are likely to make it one of the
worst returns in modern history.


It's the simple numbers that highlight the truths.

The simple numbers are for the simple-minded. If you want to see the likely
scenarios, you have to look at the more thorough analyses of the situation.
For example, here's one that's rarely talked about, which was explained in a
NYT editorial last week:

"There are several ways to explain why this particular lunch isn't free, but
the clearest comes from Michael Kinsley, editorial and opinion editor of The
Los Angeles Times. He points out that the math of Bush-style privatization
works only if you assume both that stocks are a much better investment than
government bonds and that somebody out there in the private sector will
nonetheless sell those private accounts lots of stocks while buying lots of
government bonds.

"So privatizers are in effect asserting that politicians are smart - they
know that stocks are a much better investment than bonds - while private inv
estors are stupid, and will swap their valuable stocks for much less
valuable government bonds. Isn't such an assertion very peculiar coming from
people who claim to trust markets?

"When I ask privatizers that question, I get two responses.

"One is that the diversion of revenue into private accounts doesn't have to
lead to government borrowing, that the money can come from, um, someplace
else. Of course, many schemes look good if you assume that they will be
subsidized with large sums shipped in from an undisclosed location.

"Alternatively, they point out that stocks on average were a very good
investment over the last several decades. But remember the disclaimer that
mutual funds are obliged to include in their ads: 'past performance is no
guarantee of future results.'"

[The facts are that you may do quite well on private investments under such
a scheme as long as, a) millions of other people aren't doing it at the same
time, for the same reasons; b) your timing is good, and you retire on a
stock uptick and cash out; and, c) as the editorial above says, that there
are a lot of stupid investors around to buy the bonds, and that they won't
wind up holding their stocks while the market is screaming for them, thus
driving up P/E ratios through the roof (and that they'll be dumb and happy,
and will soak up all the required bonds instead, while selling their stocks
in a seller's market. Of course, most such people probably went broke long
ago. g)]

[Swamping markets with big movements in investments immediately drives up
prices for the investment being bought. It will drive stock returns down
relative to what they were when they were purchased, which, as time goes on,
will put a damper on their value. Big returns on stocks, like the ones that
people sometimes get now when their timing is good, are very unlikely.]

"But a very high return on stocks over bonds is essential in privatization
schemes; otherwise private accounts created with borrowed money won't earn
enough to compensate for their risks. And if we take into account realistic
estimates of the fees that mutual funds will charge - remember, in Britain
those fees reduce workers' nest eggs by 20 to 30 percent - privatization
turns into a lose-lose proposition.

"Sometimes I do find myself puzzled: why don't privatizers understand that
their schemes rest on the peculiar belief that there is a giant free lunch
there for the taking? But then I remember what Upton Sinclair wrote: "It is
difficult to get a man to understand something when his salary depends on
his not understanding it.'"

The editorial was written by Paul Krugman.

--
Ed Huntress

On Tue, 25 Jan 2005 11:34:47 GMT, "carl mciver"
wrote:


"Cliff" wrote in message
news | On Mon, 24 Jan 2005 21:45:01 +0800, hamei wrote:

SNIP
| Meanwhile, back at the Texas ranch, this all seems to
| be a plan to loot the social security *surplus* by the
| neocons. Plus, they want two+ more TRILLION US dollars
| in deficit spending to do it.
| --
| Cliff

Kinda curious. What's the return on investment of your SSI?

IS it an "investment"? How high is the risk, excluding wingers &
neocons?

How much
have _you_ put in, and how much of it do you expect to get back?

How much profit do you expect on a term life policy with a mutual
firm?

On the other hand, what's the worst return on investment of a CD?

After inflation & taxes they are usually a loss.

Or the average of a generic mutual fund over your lifetime?

How about after Bush & the neocons?

It's the simple numbers that highlight the truths.

Don't be simple.

Assets behind stocks are bit fixed. Buying more stocks
means someone else is selling them but the price is
going up.
When you have to sell them the price will go down.
All this scheme does is inflate the price of stocks for
a bit (due to increased manditory demand) or provide
funds (new issues of stock) for the firms to invest in
moving your jobs abroad.

Also consider: resources consumed today have to be
there today. There is no free lunch.
This seems to be widely overlooked.
All you will have tomorrow for resources consumed
today is debt. The resources were consumed and the
debt is just a transfer of power to others, not the
consumed resources.

It's a zero sum game, day by day. Don't let them
fool you again.
This culture is not well known for rainy-day stockpiles
and about any real major disaster could topple it from
the bottom of the infrastructure up.

The neocons seem bent on using up any such
stockpiles (deficit financing & world opinion &
do forth) that remain.

HTH
--
Cliff