Social Security R.I.B Should be Privatized

“Privatizing RIB ..collapse due to stock market options.” Not what I stated. I pointed to historical down turns where individuals took a loss; Individual Plans (IP) will have the same risks. The government would most likely (safe guard) .. create a war chest.. to withstand an economic downturn.” Most likely? The gov has control over the market? I have yet to see any safe guards in plans presented by you; fallacy. These “institutes” will ensure against losses? How would a war chest be funded,what’s the cost to the consumer? The FDIC was insolvent in the 80’s. "..bubbles..These recovery stages we can see that this isn't as bad as my opponent's wants us to believe.” Black Monday:Total -36.7%, S&L crisis: FSLIC (FDIC) insolvent, 124B in bailouts. Dot.com: Nasdaq composite -78%, 2008 crash: S&P 500 Index -37% for the yr. Seniors lost on ave. 20%. When losses are high 2.9%/1.4% growth does little to recoup losses. The money is gone. It takes yrs to get back to the pre-crash balance; no equity on losses are being built. Retirees or soon to retire were hard hit [32,33,34,35]. Example: I lost 22% of my 401K in 2008 (like others). Not until last yr did I return to the pre-2008 crash level; minus new contributions. That’s 7 yrs of recouping losses. Not a quick recovery or a small $s. At 19 you have not lived through all these ups and downs with repetitive recuperation periods. It’s a significant loss over a working lifetime; stop drinking the cool-aid, it isn’t a non-issue. SS RIB is a safety net for many; privatization will pull the rug out. For 35 yrs the financial ind. has repeatedly gut our economy. It started with Garn-St. Germain Depository Institutions Act, partly responsible of the S&L crisis[47], 1989 &1993 exemption of swaps and derivatives from all regulation, (hidden in 401ks) and the lifting of Glass-Steagall, allowing for sub-prime lending and bailouts. It appears that the tax payer loose on one end and pay from the other. Privatizing SS in light of past events is far too risky[36,37]. I fully understand the transition period. If IPs were started this year 2016, all new to the workforce, would fall into IPs. All those who began working in 2015 would fall under the old SS system along with others previously working, which accounts for the 75yr transition. But, “Under the system as now constituted, each generation largely pays for the benefits of the preceding generation. Under an individual account system, each generation pays for its own benefits. During the transition from defined benefit to individual account, there will inevitably be a transition generation that must pay for both the preceding generation’s benefits and its own.”….. individual accounts places the burden of the Social Security liabilities of two generations on one. Like many federal liabilities, this one can be passed down to future generations through borrowing, but the sheer magnitude of the additional government debt that must be issued (10T), on top of an already rapidly growing national debt, has further complicated consideration of such proposals [14 p29]. See R1 & 2 regarding the structuring of transition and cost to the individual upon IP implementation. Allocate funds from SS for transition costs? Your objection to the gov’s hand in the cookie jar? Increase national debt? If an IP plan is implimented, SS tax must be raised to support existing liabilities and to support IPs. The Bush plan stated only 2% of tax would be put into IPs. What senior citizen’s comfort could be had with a 2% contribution rate, along with economic swings, recoup lags, and increased tax. Don’t forget those IP admin fees; [14]; net loss. 1: SS Crash/Solvency Gradually increase the retirement age to 68 by 2050. Change the benefit formula which will slow future benefit growth, specifically for those with high incomes. Increase the taxable max from $168,000 to $190,000. Recoup the 10% not presently paying into SS; some state and municipal workers. Tax reform: reduce loop holes. Use CPI as a measure for COLA and tax SS benefits for high income retirees [38 p.29,49,50-52, 39]. If these reforms are instituted SS will be again self perpetuating into the future. “The gov continuously takes funds from SS and it would be easy to help use these funds instead of allocation for other projects, but to help in privatization.” If you raid SS to fund privatization where’s the money for liabilities? The government has to issue bonds to cover the debt, creating more debt. Using SS to pay off the national debt? More cool-aid economics. 2: Privatization solves/ Woes “Housing crisis again, .. not regulated.”Deregulation was the cause! (above par 4) Glass-Steagall re-instatement failed in 2010 & 2013-14[40, 41]; it’s just talking points in the Presidential campaign. "Trickle-down economics” A.K.A voodoo econ, has gotten the middle class where it is today, in decline. What happens when large amounts of capital is available? The Dot.com bubble: risky inv. were made and overvaluation of stocks resulted [4, 5]. It’s not likely significant assets will be purchased. Often when money is available stock buy backs result, that also inflates stock values and line the pockets of CEO’s; fall in markets are inevitable for correction[42,43]. Small businesses, the biggest employers [48], don’t issue stock, they are privately held. Big business does little in asset development in the US. It invests overseas where labor and building is cheaper. Our IP money will fly over the pond, not create jobs here [44]. “stock holders will hang on to the stocks all day long.”I haven’t assumed or alluded to such a thing. My contender has not addressed how the IPs will be structured. Who will have influence on options available? Will it be a centralized gov unit or a free for all for Financial Institutions to make profits in fees? "Profit andLoss limit in order to prevent huge losses and maintain maximum growth” Most Americans’ experience with the stock market is through their 401Ks, not actual trading. The general population is not educated on how the stock market works; a liability when planning retirement [14,46]. Also, would P&L limit be an option in an IP? 401ks don’t have it. ”.. ability to be able to inherit your RIB if you die.”As stated before, inherit what! 2% over 30yrs =$11,725, if you’re paying for both sides; your IP and liabilities, as well as exposure to market swings & fees? Inheritance taxes? $255 is a death benefit not supplemental income. Widows over 60 and minor kids get survivor’s benefits if they are income eligible [45]. The World Bank can’t determine the impact of the Chili’s AFP’s on the economy due to macro-economic policies put in place at the same time. 3% of AFPs goes to DI and survivor’s ins. Plus, the fund’s admin fee of 2.5% for ea. monthly contribution. Also, 3.5-4% fee for withdrawal of annuities. The fee burden is 25% of contributions. AFP consortia’s’ profits are 27%. The cost to the Chilean gov in outlays and maint. is 6%/GDP. Three of the AFPs “effectively make decisions over investment resources representing 50% of Chile’s GDP;” reducing the states’ ability to regulate its own economy. US Actuaries conclude a min of 4-5 % RoR is required over long term to meet retirement needs, but in actuality are 2-3%. 50% participating in AFP are not saving enough and will not be eligible for a min. pension; leaving them destitute. The so called booming Chilean economy is on who’s back [46,28]. 32. http://tinyurl.com... 33. http://tinyurl.com... 34. http://tinyurl.com... 35. http://tinyurl.com... 36. http://tinyurl.com... 37. http://tinyurl.com... 38. http://tinyurl.com... 39. http://tinyurl.com... 40. http://tinyurl.com... 41. http://tinyurl.com... 42. http://tinyurl.com... 43. http://tinyurl.com... 44. http://tinyurl.com... 45. http://tinyurl.com... 46. http://tinyurl.com... 47. http://tinyurl.com... 48. http://tinyurl.com...