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Old June 10th, 2013, 03:13 PM   #1
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Closing the Wealth Gap With Personal Retirement Accounts

Star Parker | Jun 10, 2013

⦁ The annual Trustees Report for Social Security has just been issued, and the news is that there is no news. Social Security is on its way over a fiscal cliff – what we hear every year when the report is issued.

⦁ According to this year’s report, Social Security will be insolvent in 2033 – 20 years from now - when those now 47 years old will be eligible for their full promised benefits.

But nothing gets done because the heroes representing us in Washington won’t act on anything politically tough until emergency sirens force them.
Social Security is a tax and spend program, not an investment program. Current retirees get their money from the payroll taxes paid by those currently working. As the number of workers per retiree drops, which has been the inexorable trend as Americans live longer and produce fewer babies, the only way to “save” Social Security is some combination of tax increases or benefit cuts.

Unfortunately, the only discussions that are now taking place involve trying to find clever ways to achieve these tax increases and/or benefits cuts.
I think this is a mistake. Social Security was passed in 1935, and its structure today is basically the same as it was then. Do you know any business that is operating the same way today that it was three-quarters of a century ago?

I believe that we should rebirth the idea of changing Social Security into a real retirement investment program. Let’s get off this thing about “saving the system” and start thinking about making the lives of individual Americans better.

Does anybody believe that if we were designing a national retirement program from scratch today we would come up with what we now have? No way. And if not, it is no excuse to avoid change because it is politically hard.

It was supposedly a given that after the big stock market decline during the recent recession the idea of personal retirement accounts was dead forever. But this is like deciding, after getting caught in a rainstorm, to never go outside again.

Anyone who thinks that investing in the American marketplace over a 45 year working life won’t pay off doesn’t believe in the future of the country. And if the country doesn’t have a future, where exactly will the government get money to pay Social Security benefits?

William Shipman and Peter Ferrara examined a theoretical case of a couple, earning average incomes, whose social security taxes went into a personal retirement account broadly diversified in stocks over their full working life, and who retired in 2009, the year after the stock market crashed in 2008.
The results, published in the Wall Street Journal in 2010, showed that, even though they would have lost 37 percent in 2008, they still would have retired with $855,175, which could provide retirement payments 75 percent higher than those they would have received under Social Security.

When the idea of changing Social Security to personal retirement accounts was looked at under President G. W. Bush, naysayers on the left pushed back, saying this was just for rich people.
But it’s actually just the opposite. Rich people already own stocks and build wealth this way.

It’s low income Americans that need the opportunity to build wealth.
According to the Pew Research Center, 55 percent of white Americans own stocks, but only 28 percent of blacks and 17 percent of Hispanics do.
Thus, as the stock market has recovered since 2009, the wealth gap has grown even greater. According to Pew, between 2009 and 2011, the mean net worth of the wealthiest 7 percent of households increased 28 percent and dropped 4 percent for the other 93 percent.

It’s time to close the door on a bankrupt, antiquated Social Security system and give every working American the opportunity to build wealth and share in the American dream.

Closing the Wealth Gap With Personal Retirement Accounts - Star Parker - Page full
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Old June 10th, 2013, 03:30 PM   #2
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A typical Ponzi scheme. Yet another instance of a situation where kicking the can down the road works for a while. But ..............
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Old June 10th, 2013, 04:45 PM   #3
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The Elephants took your pension and now want your SS and Medicare
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Old June 10th, 2013, 04:50 PM   #4
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Quote:
Originally Posted by Camelot View Post
The Elephants took your pension and now want your SS and Medicare
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Old June 10th, 2013, 11:03 PM   #5
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Originally Posted by Camelot View Post
The Elephants took your pension and now want your SS and Medicare
The elephants did not take the SS.. he Donkey (LBJ) did

it was the SS Act of 1964, that put SS in the General Operational budget..


They did this to fund the Vietnam war.


HINT.. not one republican voted for this Act...
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Old June 10th, 2013, 11:59 PM   #6
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Five acre retirement blocks are all the rage in Oz. Solar panels, wood stove, some stock and a garden...

Ya even get to live longer...
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Old June 11th, 2013, 05:21 AM   #7
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rich people already own stocks and build wealth that way, poor people need the same opportunity.

this was in the block of text above, i feel it should be highlighted.
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Old June 11th, 2013, 06:26 AM   #8
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A typical Ponzi scheme. Yet another instance of a situation where kicking the can down the road works for a while. But ..............
It's beyond a mere Ponzi scheme and if you or I tried to sell such a program, we would be arrested.

First the Government forces you and your employer to pay into this fund. Then the Government takes this cash and gives SS an IOU called a treasury note. The interest on this note is of course an obligation by you the retirement recipient.

Now when you actually retire you're not entitled to the entire amount, but rather a small monthly stipend that barely pays for groceries. It gets even better. When you die your estate will get a $250 death benefit. Try to not spend it all at once. Today, that $250 will pay about 1/16th of the cost of even the cheapest funeral.

But in addition to the tiny stipend, when you die, your heirs are not entitled to the balance because, surprise surprise, there is NO balance.

One last thing, try to die at the beginning of the month instead of the end because SS will come after any amounts paid as their benefits expire retro to the beginning of the month and your estate will be required to pay back any excess amounts paid before you died.
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Old June 11th, 2013, 06:27 AM   #9
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The Elephants took your pension and now want your SS and Medicare
Wrong, it's the jackass that is raiding your SS because jackasses have a tireless appetite for spending other people's money.
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Old June 11th, 2013, 06:30 AM   #10
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Social Security; the biggest Government fraud ever foisted on the gullible American sheeple.
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