Skip to main content

View Diary: Why do Republicans hate Social Security? (218 comments)

Comment Preferences

  •  you simply (1+ / 0-)
    Recommended by:

    were are talking about new monies, the money that is going in from here on OUT gets diverted toward privatization.  Privatization is all about getting the money into wall street., and yes I used to work there.  Its their ultimate dream.  

    Repubs want the current system to start failing, then they will set up a privatization "option" for all of us who pay into the system.  You can simple do nothing and get craptastic returns_ thanks to Uncle Ben, OR you can play the ponies, I mean market with a percentage ( probably varying by age).  That means an INCREDIBLE inflow of cash into the market.

    THAT is what this is about.  With treasuries assured to be paying NOTHING for years, all the ducks are now in a row.

    This is about feeding the beast.  the Wall street beast.

    Bad is never good until worse happens

    by dark daze on Fri Sep 23, 2011 at 02:28:49 PM PDT

    [ Parent ]

    •  You may know Wall Street (1+ / 0-)
      Recommended by:

      but you know Jack about Social Security.

      Social Security is invested predominetdy in Ten Year Treasuries. But they are called Special Issues for a reason. Being non-marketable always means they yield exactly their face value and yield, moreover they are callable at any time in any sequence thar the Managing Trustee, aka the Secretary of Treasury likes, which means older Specials issued at rates currently as high as 7% can be held to maturity even as newer ones issued at lower rates can be redeemed in advance so so protecting the overall yield until actual maturity. By this same token the principal value can NEVER decline do to price changes.

      Meaning the Specials are entirely sheltered from price and through rebalancing of the portfolio largely protected from lower rates on new issues. Meaning that lower returns going forward mostly don't mean jack it doesn't work like a regular bond bond.

      For younger workers the return has nearly nothing to do with short term performance in the bond market and everything to do with real assumed interest. And even then returns on the Trust Fund over the long run only are called on for about 2% of cost further discounting the effects you see.

      Social Security's long term health are best served by an increase in more employment at higher real wages which for any given public company would seem to reduced returns on equity. Which is the fundamental flaw in an equity based investment program, at least to some degree the labor cost increases needed to adequately fund almost universal 401k based retirement plans cut into equity returns that rely on returns on capital.

      There are win-win scenarios but all would dramatically improve solvency for traditional Social Security along the way.

      No it isn't easy. Which is why I am only on year 14 of studying this stuff and am still learning things. But one thing I learned already is that you can't apply logic from normal market operations and/or federal budget, deficit and debt calculations to Social Security. Nothing quite works the way you think it would it is in some ways a world of it's own.

      Please visit, follow or join our Group: Social Security Defenders

      by Bruce Webb on Fri Sep 23, 2011 at 04:23:10 PM PDT

      [ Parent ]

      •  Sorry for typos. iPads have limits (0+ / 0-)

        editing longer comments due to scrolling issues.

        Please visit, follow or join our Group: Social Security Defenders

        by Bruce Webb on Fri Sep 23, 2011 at 04:25:09 PM PDT

        [ Parent ]

      •  And your entire post has nothing (2+ / 0-)
        Recommended by:
        pot, dark daze

        to do with how private administrators would act.

        "What could BPossibly go wrong??" -RLMiller "God is just pretend." - eru

        by nosleep4u on Fri Sep 23, 2011 at 11:12:13 PM PDT

        [ Parent ]

      •  you totally ignore (0+ / 0-)

        what I just spoke about.  I guess you simply dont understand what the market wants.

        You may know what SS is now, you dont understand what the market wants to change it into.  They want to basically turn SS into a 401 k in which people get a say as to what their SS portion is placed in.

        an equities is the ONLY game in town if you are chasing a return, QE makes sure of that.

        Or dont you understand what QE is all about either.  They are getting very brazen, you want a return, the powers to be are making it, the only way to do so is to play the casino of wall street.

        Bad is never good until worse happens

        by dark daze on Sat Sep 24, 2011 at 11:38:10 PM PDT

        [ Parent ]

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site