McCain guru linked to subprime crisis

[Xombie]

[quote name='Homer_Rice' post='647325' date='Mar 31 2008, 10:33 AM']Hey, a little gratitude here! Once again, the Dems are going to have to step in to save the capitalist system for the Republicans, who persistently keep fucking it up by bringing the US to the edge of economic destruction.[/quote]


I think that is a wee bit biased, as when the conservative led Congress wanted to utilize a more agressive investment tendency with the Social Security funds to help prolong that particular money pit, liberals crushed the premise with propaganda.

[|Bunghole|]

[b]“I have always been committed to the principle that it is not the duty of government to bail out and reward those who act irresponsibly, whether they are big banks or small borrowers,” McCain said. “Government assistance to the banking system should be based solely on preventing systemic risk that would endanger the entire financial system and the economy.” [/b]-John McCain

Don't gloss over this. I believe this as well. Government bailouts should only be used in EXTREME mitigating circumstances.

[|Bunghole|]

Lending institutions shouldn't lend money to people they KNOW cannot afford to pay it back when variable rates kick in on their loans, and borrowers should have known better than to borrow said money and read the fine print in their loan paperwork.
The housing boom from 1999-2005 fueled this shit, and now it's a buyers market for homes. I benefited from this, as the home I'm in now stayed on the market long enough AFTER the boom that birthed an aggressive seller. I won, he lost. But he made money, still. He paid about $96k for this home in 1996 when he built it, and I paid $150k for it now, which, if the bubble kept expanding, would have thrown this property with a half an acre and 3,000 sq feet of living space into the $190-200k range in my area.
Fuck it, people get what they deserve on both sides.
I suppose the real issue is if "people getting what they deserve" derails the economy into a full-blown depression or not.

[Jamie_B]

[quote name='Bunghole' post='647458' date='Mar 31 2008, 05:13 PM'][b]“I have always been committed to the principle that it is not the duty of government to bail out and reward those who act irresponsibly, whether they are big banks or small borrowers,” McCain said. “Government assistance to the banking system should be based solely on preventing systemic risk that would endanger the entire financial system and the economy.” [/b]-John McCain

Don't gloss over this. I believe this as well. Government bailouts should only be used in EXTREME mitigating circumstances.[/quote]

we aren't that far off...

[|Bunghole|]

one of the things that bothers me about government bailouts of large, once profitable corporations is this: If you teach a child to save money, he/she will likely learn to save some money and learn the value of a dollar.
When these lending institutions (and for that matter, airlines) were making money hand over fist, where were the savings into a company account that would help keep a company liquid for a rainy day?
if there's a trend that's most disheartening about how large corpporations operate, it's a view that short-term gains for CEO's and shareholders are more important than long-term viability. THAT is a problem.
If these banks that engaged in these shady practices (and to be fair, not all did) could use a little financial discretion, they wouldn't be where they are today, and foreclosed homeowners of $250k homes would be living in $150k homes, like they should have from the beginning.

[sois]

housing prices need a surgeon general warning.

[|Bunghole|]

[quote name='sois' post='647476' date='Mar 31 2008, 05:58 PM']housing prices need a surgeon general warning.[/quote]
People just need to pay attention to their terms. If you got into a home that was say, $250,000 and you put NO money down on it, and you payments are reasonable for awhile, chances are they won't be later.
I don't know a SINGLE financially secure person that has EVER bought a home without a down payment. That's lunacy.

[TheBZ]

I can understand the opinion that those who signed these bad mortgage deals deserve exactly what they get...But that righteous frame of mind means diddly when the economy is tanking when none of those people are able to purchase anything in your service economy any more, and banks are bailing right and left.

Everyone really seems to get stuck focusing on really small pieces of this puzzle, in my opinion...In many ways, this seems like it has been an inevitable outcome from the outset; and to me, that means that the people with the really big money wanted it to turn out this way. They knew it was coming, they made their money all along, and they are positioned to pick at the carcass before the next go-round.

I think you're right that you can compare it to the dot com boom, or you can compare it to the story of a company like Enron, etc...The point is that the economic system encourages companies to fleece the population for everything they can pull - even if the end result is that the company explodes, implodes, is carved into pieces, or swallowed by a bigger fish.

Obviously, it's not my forte to talk about this stuff...So I'll try to awkwardly sum it up:

If your system of valuation ($currency, property, tech, insurance) is intentionally designed to create mis-valued bubbles that blow up and die hard - to the detriment of citizen earning/spending power - how could that be good for anyone but the richest X% of people?

BZ

[CTBengalsFan]

[quote name='TheBZ' post='647492' date='Mar 31 2008, 08:00 PM']I can understand the opinion that those who signed these bad mortgage deals deserve exactly what they get...But that righteous frame of mind means diddly when the economy is tanking when none of those people are able to purchase anything in your service economy any more, and banks are bailing right and left.

[b]Everyone really seems to get stuck focusing on really small pieces of this puzzle, in my opinion...In many ways, this seems like it has been an inevitable outcome from the outset; and to me, that means that the people with the really big money wanted it to turn out this way. They knew it was coming, they made their money all along, and they are positioned to pick at the carcass before the next go-round.[/b]

I think you're right that you can compare it to the dot com boom, or you can compare it to the story of a company like Enron, etc...The point is that the economic system encourages companies to fleece the population for everything they can pull - even if the end result is that the company explodes, implodes, is carved into pieces, or swallowed by a bigger fish.

Obviously, it's not my forte to talk about this stuff...So I'll try to awkwardly sum it up:

If your system of valuation ($currency, property, tech, insurance) is intentionally designed to create mis-valued bubbles that blow up and die hard - to the detriment of citizen earning/spending power - how could that be good for anyone but the richest X% of people?

BZ[/quote]

I think you nailed it, BZ. Especially the bolded part.

[Homer_Rice]

[quote name='Xombie' post='647453' date='Mar 31 2008, 06:00 PM']I think that is a wee bit biased, as when the conservative led Congress wanted to utilize a more agressive investment tendency with the Social Security funds to help prolong that particular money pit, liberals crushed the premise with propaganda.[/quote]
Oh no, not wee bit, it's totally biased! It's also true. That's what happened in the 30s. And you should consider yourself lucky that the Dems (and some sensible Repubs) squashed that incredibly stupid idea about Social Security, though it keeps rearing it's ugly head.

Here's why.

Social Security is not a part of the financial structure, other than the fact that the money is supposed to be put into a trust fund. It's a [i]fiscal[/i] policy. The whole intent of the drive to privatize Social Security was to provide another base from which the vultures of the financial system could loot it. Well, use it to leverage their credit issues, which amounts to the same thing in this climate. Watch what is happening to private pension funds (and what will continue to happen at an accelerating rate) to get an idea of why this particular governmental fiscal solution to old age and retirement is essential for the health of a large segment of your fellow citizens. I know in this day and age of lifeboat ethics reality shows that it is okay to toss the "losers" off the island, but that's no way to run a country. Thank you, Garrett Hardin, you bloodthirsty piece of shite.

That is the intent of all the private-public plans going now, [b]especially[/b] the ones being floated by Obama. It's one of the key reasons I worry about his presidential caliber.

Be careful what you wish for. You just might get the dog-eat-dog world that results.

[Xombie]

[quote name='Homer_Rice' post='647538' date='Mar 31 2008, 09:57 PM']Oh no, not wee bit, it's totally biased! It's also true. That's what happened in the 30s. And you should consider yourself lucky that the Dems (and some sensible Repubs) squashed that incredibly stupid idea about Social Security, though it keeps rearing it's ugly head.

Here's why.

Social Security is not a part of the financial structure, other than the fact that the money is supposed to be put into a trust fund. It's a [i]fiscal[/i] policy. The whole intent of the drive to privatize Social Security was to provide another base from which the vultures of the financial system could loot it. Well, use it to leverage their credit issues, which amounts to the same thing in this climate. Watch what is happening to private pension funds (and what will continue to happen at an accelerating rate) to get an idea of why this particular governmental fiscal solution to old age and retirement is essential for the health of a large segment of your fellow citizens. I know in this day and age of lifeboat ethics reality shows that it is okay to toss the "losers" off the island, but that's no way to run a country. Thank you, Garrett Hardin, you bloodthirsty piece of shite.

That is the intent of all the private-public plans going now, [b]especially[/b] the ones being floated by Obama. It's one of the key reasons I worry about his presidential caliber.

Be careful what you wish for. You just might get the dog-eat-dog world that results.[/quote]


Point. But the 'Let's Not Do A Thing' approach isn't working, as well... The only way that Social Security would work, as it is being implemented now, is if people still barely lived past 65 and if 75% of the Baby Boomers died now. So, in this regard the devil you know is just as bad as the devil you don't... If you have no issue with government cloaking the poor lending practices that were evolved through cries of bigotry, then to refuse a plan to stabilize a system that many currently count on and countless more will, is just asking for another financial crisis.

[Vol_Bengal]

[quote name='Homer_Rice' post='647538' date='Mar 31 2008, 09:57 PM']Oh no, not wee bit, it's totally biased! It's also true. That's what happened in the 30s. And you should consider yourself lucky that the Dems (and some sensible Repubs) squashed that incredibly stupid idea about Social Security, though it keeps rearing it's ugly head.

Here's why.

Social Security is not a part of the financial structure, other than the fact that the money is supposed to be put into a trust fund. It's a [i]fiscal[/i] policy. The whole intent of the drive to privatize Social Security was to provide another base from which the vultures of the financial system could loot it. Well, use it to leverage their credit issues, which amounts to the same thing in this climate. Watch what is happening to private pension funds (and what will continue to happen at an accelerating rate) to get an idea of why this particular governmental fiscal solution to old age and retirement is essential for the health of a large segment of your fellow citizens. I know in this day and age of lifeboat ethics reality shows that it is okay to toss the "losers" off the island, but that's no way to run a country. Thank you, Garrett Hardin, you bloodthirsty piece of shite.

That is the intent of all the private-public plans going now, [b]especially[/b] the ones being floated by Obama. It's one of the key reasons I worry about his presidential caliber.

Be careful what you wish for. You just might get the dog-eat-dog world that results.[/quote]
Homer - I'm pretty sure we're going to disagree on the privatizing social security but I want to get your take on one small component of it first.

I've seen varying numbers but do you know what the SSA gets as a return on the money that is "invested" into the social security fund? Like I said, I've seen a couple different ones and didn't know if you knew of a certain rate to be accurate.

Seems to me that it was the actual was somewhere between 3.5 and 4...

[Homer_Rice]

[quote name='Vol_Bengal' post='647564' date='Apr 1 2008, 08:04 AM']Homer - I'm pretty sure we're going to disagree on the privatizing social security but I want to get your take on one small component of it first.

I've seen varying numbers but do you know what the SSA gets as a return on the money that is "invested" into the social security fund? Like I said, I've seen a couple different ones and didn't know if you knew of a certain rate to be accurate.

Seems to me that it was the actual was somewhere between 3.5 and 4...[/quote]
I don't know for certain if the promissory notes issued by the Treasury have a rate. I don't think so as the money is not invested. The SS surplus, which is spent by Treasury every year (or at least used as funds made available in the general budget) is the portion guaranteed by the Federal government, to be collected on at a time when SS no longer runs a surplus. Currently, that's about the year 2025. In a healthy economy, with [i]real[/i] growth rates approximately 3% or so, it would be even longer into the future.

If we were truly interested in fiscal sanity, we'd stop the huge increases in deficit spending, limiting such credit to initiatives which actually have some chance to provide a return on spending, either directly or indirectly.

[Vol_Bengal]

[quote name='Homer_Rice' post='647569' date='Apr 1 2008, 08:32 AM']I don't know for certain if the promissory notes issued by the Treasury have a rate. I don't think so as the money is not invested. The SS surplus, which is spent by Treasury every year (or at least used as funds made available in the general budget) is the portion guaranteed by the Federal government, to be collected on at a time when SS no longer runs a surplus. Currently, that's about the year 2025. In a healthy economy, with [i]real[/i] growth rates approximately 3% or so, it would be even longer into the future.

If we were truly interested in fiscal sanity, [b]we'd stop the huge increases in deficit spending[/b], limiting such credit to initiatives which actually have some chance to provide a return on spending, either directly or indirectly.[/quote]
Agreed 100%...

But, I know when the whole SS thing was the flavor of the day there were discussions about what the actual return on the monies was and it seems like it was 3 or 4% (I'm about 99% certain it was 3)...

The only reason I'm relatively certain of it is when I heard / read those numbers I remember making the comment to my wife that just allowing us to decide how those monies are invested I could easily (with no risk) get better than the 3%. Now, when you (in the general sense) start discussing stock market and seeing 9-12% then there is risk but a person could get 4-4.5 with their eyes closed...

What would that mean in real numbers as to extending the lifespan of SS? All I know is that at the current rate I'll be luckier than if there is any SS there when I retire. I'm 32. Let's put it this way - I'm putting into my 401k assuming there won't...

But, I guess we're digressing from the original topic!!!

[Homer_Rice]

[quote name='Vol_Bengal' post='647579' date='Apr 1 2008, 08:53 AM']Agreed 100%...

But, I know when the whole SS thing was the flavor of the day there were discussions about what the actual return on the monies was and it seems like it was 3 or 4% (I'm about 99% certain it was 3)...

The only reason I'm relatively certain of it is when I heard / read those numbers I remember making the comment to my wife that just allowing us to decide how those monies are invested I could easily (with no risk) get better than the 3%. Now, when you (in the general sense) start discussing stock market and seeing 9-12% then there is risk but a person could get 4-4.5 with their eyes closed...

What would that mean in real numbers as to extending the lifespan of SS? All I know is that at the current rate I'll be luckier than if there is any SS there when I retire. I'm 32. Let's put it this way - I'm putting into my 401k assuming there won't...

But, I guess we're digressing from the original topic!!![/quote]

Looks like we're both in the ballpark:

[url="http://en.wikipedia.org/wiki/Social_Security_Trust_Fund"]Via Wikipedia:[/url]
[quote]These [Trust Fund] balances are available to finance future benefit payments and other Trust Fund expenditures – but only in a bookkeeping sense.... They do not consist of real economic assets that can be drawn down in the future to fund benefits. Instead, they are claims on the Treasury that, when redeemed, will have to be financed by raising taxes, borrowing from the public, or reducing benefits or other expenditures. The existence of large Trust Fund balances, therefore, does not, by itself, have any impact on the Government’s ability to pay benefits. (from FY 2000 Budget, Analytical Perspectives, p. 337)[/quote]

[url="http://www.ssa.gov/OACT/ProgData/fundFAQ.html"]And, via SS site, see Q2.[/url]

The purpose of SS is not to maximize return for individuals, it wasn't conceived that way. It promotes the General Welfare, consistent with the Constitution. In other words, its function is to ensure that the older segment of our population is not left without some minimum means to meet basic needs, as was the case previous to the Great Depression.

[Vol_Bengal]

[quote name='Homer_Rice' post='647604' date='Apr 1 2008, 10:01 AM']Looks like we're both in the ballpark:

[url="http://en.wikipedia.org/wiki/Social_Security_Trust_Fund"]Via Wikipedia:[/url]


[url="http://www.ssa.gov/OACT/ProgData/fundFAQ.html"]And, via SS site, see Q2.[/url]

[b]The purpose of SS is not to maximize return for individuals[/b], it wasn't conceived that way. It promotes the General Welfare, consistent with the Constitution. In other words, [b]its function is to ensure that the older segment of our population is not left without [/b]some minimum means to meet basic needs, as was the case previous to the Great Depression.[/quote]
Not pointed at you Homer as I know you're just pulling text...


But I find that hysterical... I know it isn't intended to maximize returns but are they guaranteeing that it will be there when I or my great grandchildren reach the "older segment"???

If you could safely get another 1/2 or 1 percent on returns in the kinds of numbers we're talking that would be significant, I'm relatively safe in assuming... without "maximizing returns for individuals" while improving the probability that it will be able to serve it core function.

[Homer_Rice]

[url="http://www.huffingtonpost.com/kevin-phillips/the-destructive-rise-of-b_b_94351.html"]Nice short bit by Kevin Phillips related to my suggestions about the transition from agro-industrial to FIRE.[/url]

[Homer_Rice]

[quote name='Vol_Bengal' post='647612' date='Apr 1 2008, 10:07 AM']Not pointed at you Homer as I know you're just pulling text...


But I find that hysterical... I know it isn't intended to maximize returns but are they guaranteeing that it will be there when I or my great grandchildren reach the "older segment"???

If you could safely get another 1/2 or 1 percent on returns in the kinds of numbers we're talking that would be significant, I'm relatively safe in assuming... without "maximizing returns for individuals" while improving the probability that it will be able to serve it core function.[/quote]
No, actually that's my statement. And you raise a very good question. What would guarentee that SS will be there and viable when you hit retirement age? It goes to the core of the matter.

Where does wealth come from? It doesn't come from money. It comes from transforming raw materials into usable products that meet the needs, or improves the lives, of people. I cannot emphasize this idea enough, because it seems to me that it is inadequate attention on this very point which leads to tripping people up when it comes to thinking about economics.

This was a major element of discussion in the early days of the development of political economy as a discipline. I've read through a lot of this stuff and I tend to agree with the folks who emphasized the "transformation" part of the matter. After all, land is just land, and a rock is just a rock--until one tills the land for crops or mines the rock for ore. What good was that black ooze coming up out of the ground to farmers? None at all, until the innovation of the human mind learned to use that black ooze to propel engines.

Take a look at socialism as an historical phenomenon. At it's essence, the idea of socialism is not a bad one: a fair equitable way in which everyone gets their share. But look at the key flaw of the two kinds of socialism which developed over time: both inhibit innovation. The utopian variety of socialism tends to freeze a moment in time, somehow concluding that the given techniques of that frozen moment are more or less immutable. Ever wonder why the Amish chose to freeze their society and culture in the techniques of the 18th century? I have, and though I haven't researched it, it remains a curiosity to me. Why then as opposed to another period with other prevailing techniques of that period? The other variant of socialism, so-called scientific socialism most notably associated with the Marxian variants, also inhibits innovation, not by freezing time and technique, but by creating an environment in which individual innovation is less valued and rewarded, instead usually degenerating over time into a bureaucratic system.

Now, that doesnt mean that capitalism is a superior framework by default. It has its flaws, too. One of them is that it cannot shed itself of the feudal characteristics of inequality--the notion that the lord of the manor is somehow superior by either blood (family) or by entitlement (holding pieces of paper which somehow give it property rights.) That's not to say that property, in itself, or contract law, is a bad thing. It's not. But there is nothing "divine" about it.

One of the virtues of our form of society is that it is capable of rewarding innovation--that quality of mind which leads to transformations of nature which improve the lot of humanity in both small and large ways. However, when the structure of law emphasizes "paper entitlements" over real innovation, then an economy will tend to stagnate. And with that stagnation comes the law of diminishing returns--an inability to keep pace with change and an eventual crumbling of the structure.

So, why is it that people are worried about whether or not SS will be there when they retire. They may not understand it, but it is essentially because they somehow "sense" that there will be no innovations such that improvements in our economic behavior will keep pace with growing demographic demands as well as the naturally higher costs of extraction of raw materials.

I guess what I am saying is that the guarantee is tied to creating and maintaining a system which, to the best of our ability to do so, promotes innovation and new ideas being translated into economic practice.

And that is precisely what the last 40 years have militated against. For the "left" this generally tends to take the form of unscientific environmentalism, on the "right" it takes the form of a lot of confusion about what really creates wealth, somehow mistakenly thinking that shuffling around bits of paper with purported "values" will suffice.

Now, there's a lot of generalism in what I just said, but I think it helps frame the essential problem.

[bengalrick]

I understand the reasoning behind not wanting to totally privatize SS b/c of market instability, but why not only allow bonds to be purchased with them? The main beef I have is that I am forced to put away 7% (plus another 7% match from my employer) to a program that there is almost no chance I will not be a part of... I do not want to scrap the old plan without reguard for what that would do, but I do want to start moving towards a SS plan that makes logical sense...

[Homer_Rice]

[quote name='bengalrick' post='647635' date='Apr 1 2008, 10:54 AM']I understand the reasoning behind not wanting to totally privatize SS b/c of market instability, but why not only allow bonds to be purchased with them? The main beef I have is that I am forced to put away 7% (plus another 7% match from my employer) to a program that there is almost no chance I will not be a part of... I do not want to scrap the old plan without reguard for what that would do, but I do want to start moving towards a SS plan that makes logical sense...[/quote]
Part of my response to this, br, is in my previous post, which I was wriitng at the same time you were writing. But the best answer I can think of is this: don't consider your (or your company's) contribution to SS as an investment in your individual future. That wasn't it's intent. It's intent was more community oriented--it was designed to provide a fiscal basis from which an entire class of people are given some protection. That's a good thing, seen in that light.

Perhaps a quick look at economic demographics might be useful. How does one breakdown the "direct contributors/participants" in the production of wealth? Children are not, but we are training them (supposedly) to one day take their place in such production. Adults do (or at least they ought) perform some function in the production of wealth. Older people, who have already participated in the production of wealth for a society, are not.

Of course, it gets a lot more detailed than that (households, just what constitues productive vs non-productive, etc...) but for the purposes of my point--that we are dealing with a class and not an individual--this suffices.

[Vol_Bengal]

[quote name='Homer_Rice' post='647640' date='Apr 1 2008, 11:07 AM']Part of my response to this, br, is in my previous post, which I was wriitng at the same time you were writing. But the best answer I can think of is this: don't consider your (or your company's) contribution to SS as an investment in your individual future. That wasn't it's intent. It's intent was more community oriented--it was designed to provide a fiscal basis from which an entire class of people are given some protection. That's a good thing, seen in that light.

Perhaps a quick look at economic demographics might be useful. How does one breakdown the "direct contributors/participants" in the production of wealth? Children are not, but we are training them (supposedly) to one day take their place in such production. Adults do (or at least they ought) perform some function in the production of wealth. Older people, who have already participated in the production of wealth for a society, are not.

Of course, it gets a lot more detailed than that (households, just what constitues productive vs non-productive, etc...) but for the purposes of my point--that we are dealing with a class and not an individual--this suffices.[/quote]
I like your explanation of SS, it still doesn't address the negative to allowing individuals (even if they're not actually investing their own retirement) to have a say in how the money is "invested" even in the short term as those individuals would have a driven interest in keepin the program liquid. If the current SS system was so great why isn't government employees in the same system? I know you're not saying is it the be all end all but if Congress had to rely on this SS system it would definitely get some much needed attention.

And, I understand your premise that technical innovation should continue to grow the pool of funds by which SS is paid out but can technical innovation grow that pool, with fewer payers, while the pool continues to have more and more payees as baby boomers begin to retire? Essentially, the remaining payers will have to "pick up the slack" as the population of payers dwindles and the ratio (which right now is more payers than payees) changes to more payees than payers...

[|Bunghole|]

I've always thought that people that have a certain amount of assets when they hit retirement age (let's say 65) should not be allowed to receive SS payments. If you have more than enough loot to live the rest of your years comfortably, why do you need it?
I get the sense that people are like "Hey, I paid into it, it's MINE!" even if they don't really need it.

[Vol_Bengal]

[quote name='Bunghole' post='647691' date='Apr 1 2008, 12:19 PM']I've always thought that people that have a certain amount of assets when they hit retirement age (let's say 65) should not be allowed to receive SS payments. If you have more than enough loot to live the rest of your years comfortably, why do you need it?
I get the sense that people are like "Hey, I paid into it, it's MINE!" even if they don't really need it.[/quote]
I would agree with that...

If, during the course of your lifetime, you've amassed whatever set, prescribed asset level is deemed adequate then you shouldn't draw from social security as well. I'd whole-heartedly agree with that premise.

The issue there is what asset level is adequate? Because you're going to get all kinds of fighting as to region because different areas have different costs of living...

[bengalrick]

[quote name='Homer_Rice' post='647640' date='Apr 1 2008, 11:07 AM']Part of my response to this, br, is in my previous post, which I was wriitng at the same time you were writing. But the best answer I can think of is this: don't consider your (or your company's) contribution to SS as an investment in your individual future. That wasn't it's intent. It's intent was more community oriented--it was designed to provide a fiscal basis from which an entire class of people are given some protection. That's a good thing, seen in that light.[/quote]

I respect and agree w/ that... It was not designed to be a "401k" type of help, but instead more of a "pension" type of help... we all put in, so that we all can get back out... the problem with this, like many things that are "socialized", is that it is corrupted... It is not right, and i will never agree to a policy or program where i will pay in for 30 years (or until it officially flops) with literally no chance of seeing any of it back...

The system was designed when we had more young people than old people... When i turn 65, i can almost guarentee that the money that i've put into that account for the last 40 years will not be there for me... or if it will, it will b/c of major cuts in benefits, moving the retirement age back, or something else that will suck for me...

[quote]Perhaps a quick look at economic demographics might be useful. How does one breakdown the "direct contributors/participants" in the production of wealth? Children are not, but we are training them (supposedly) to one day take their place in such production. Adults do (or at least they ought) perform some function in the production of wealth. Older people, who have already participated in the production of wealth for a society, are not.[/quote]

That is how it should work... but in 40 years, i will be in the older group, and i will have zero protection... i think its time to figure out ways to make sure this isn't going to happen...

I do not understand economics enough to know what is the best thing to fix it, but i know damn well that the current system is unsustainable, and anyone that plans on just patching that up, will never get my support... you can't tell me on one hand to respect the elders, but then tell me that i'm screwed when i become elderly...

[Homer_Rice]

[quote name='Vol_Bengal' post='647648' date='Apr 1 2008, 11:24 AM']I like your explanation of SS, it still doesn't address the negative to allowing individuals (even if they're not actually investing their own retirement) to have a say in how the money is "invested" even in the short term as those individuals would have a driven interest in keepin the program liquid. If the current SS system was so great why isn't government employees in the same system? I know you're not saying is it the be all end all but if Congress had to rely on this SS system it would definitely get some much needed attention.

And, I understand your premise that technical innovation should continue to grow the pool of funds by which SS is paid out but can technical innovation grow that pool, with fewer payers, while the pool continues to have more and more payees as baby boomers begin to retire? Essentially, the remaining payers will have to "pick up the slack" as the population of payers dwindles and the ratio (which right now is more payers than payees) changes to more payees than payers...[/quote]
The program is liquid and will be for another 2 decades. And, if we had a healthy economy, it would be indefinitely sustainable, possibly with some minor tweaks, as long as the basis for economic activity remained healthy. The problem is and I've said it time and time again here for almost three years now, and for a whole lot longer elsewhere: [i]our economy has been in decline for 40 years now[/i]. The basis for this assertion has to do with the premises of a whole number of differents dogmas put forth over that period: post-industrial society, the services sector economy, sustainability, etc...

Innovation, and by that I mean new advances in science which are then deployed to technoogical advances in society, is not necessary merely for the sake of SS. [i]It is necessary because that is what human society must do if it intends to survive.[/i] That takes a while for people to get their mind around, but it's a principled and scientific statement.

Unfortunately nowadays, we spend a lot of time polishing turds instead of mucking out the stable. But a turd is still a turd, shiny or not it still can carry disease. The only remedy is to clean the place up.