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On January 1, Congress approved a tax and spending bill to avert the so-called "fiscal cliff" combination of tax hikes and spending cuts that would have created deflationary pressure on the United States (though Yglesias questioned the conventional wisdom of whether it would necessarily cause a recession). Let's take a look at the deal in some detail, then proceed to the gruesome details of what will happen around the Ides of March.

From Think Progress, here are some of the more critical parts of the deal.

1) The Bush tax cuts expire on only about 0.7% of households, those earning more than $400,000 per year as an individual or $450,000 for a couple. This brings in $600 billion over 10 years. Since rich people don't spend as much of their income as the poor and middle class do, this is less deflationary than a tax increase on the middle class, as I discussed in November.

2) With the expiration of the temporary 2% payroll tax cut, 77% of households will see their taxes go up. Indeed, every single income group will, on average, see their taxes increase, as shown below (via Matt Yglesias):

See here for chart.

Since this hits the middle class more directly, the deflationary consequences are larger than they would be for an increase in taxes on the rich. On the other hand, this strengthens the long-run funding of Social Security, an issue I will return to shortly.

3) Unemployment insurance is extended for two million workers. This will get spent and have a definitive stimulative effect on the economy.

However, the second shoe of the fiscal cliff, the automatic cutbacks known as the "sequester" was simply postponed for two months, which is the same time that the Treasury Department will run out of creative ways to keep the country from exceeding the debt ceiling, which it hit on December 31.

Combining these two negotiations, the debt ceiling and the sequester, will be an extremely high-stakes battle where the middle class has a lot to lose. The big problem here is that some Tea Party Republicans really do want to use the debt ceiling to take the economy hostage and force cutbacks in Social Security, Medicare, and Medicaid. Despite the fact that Republicans lost the Presidency as well as both Senate and House seats (with a majority of the votes cast for the House going to Democrats), they see their gerrymandered House majority as giving them license to wreak havoc.

The consensus among most commentators (Krugman, Klein, and Yglesias, for example) is that the fiscal cliff deal will work out okay as long as the President does not cave in to the Republicans' threats over the debt ceiling.  I agree as far as that goes. But, as Yglesias points out, there is nothing great about what Klein says is the most likely scenario, where the President gets $1 trillion in new tax revenue for $1 trillion in cuts over 10 years. That is still $2 trillion in austerity measures at a time when unemployment is barely below 8%!

The looming problem rarely mentioned, even in the context of the Republican campaign against Social Security, is that my children's generation (Generation X, if you will) faces a retirement crisis that many of my generation will avoid, based on the end of pension plans. According to one Social Security Administration report, the percentage of private-sector workers with a traditional defined-benefit pension plan fell from 38% in 1980 to 20% in 2008. Over the same period, private-sector workers who only received defined contribution plans rose from 8% to 31%. Note that this means that 49% of private-sector workers are not covered by any pension plan at all. Moreover, while governments have more commonly provided defined-benefit plans than private employers have, they are under attack in many states.

Let's do the math. With 49% of private workers having no pension, and another 31% having an on-average less generous defined contribution pension, how will seniors support themselves if Social Security is cut? Hint: It won't be pretty.

Get ready for a bumpy March.

Originally posted to Kenneth Thomas on Thu Jan 03, 2013 at 01:13 PM PST.

Also republished by Social Security Defenders and Community Spotlight.


Are you, or do you expect to be, able to retire at age

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Comment Preferences

  •  I'd Like to See Numbers on Retirement Hits Taken (41+ / 0-)

    by boomers. We began getting tossed out of late stage careers 10-15 years ago, and pensions have been cut for some going back farther.

    A former computer tech supporter I know worked on machinery till she was 70. I'm a boomer expecting to work till 80 or disability.

    We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

    by Gooserock on Thu Jan 03, 2013 at 01:19:08 PM PST

  •  I have no retirement plan. (20+ / 0-)

    I picture myself at work as a 96-year-old walking skeleton.

    Every time I even see the word "retirement" on a magazine it looks increasingly alien to me.

    Preparing for the Mayan doomsday prophecy by hastily trying to get in the good graces of snake-bird god Q’uq’umatz

    by dov12348 on Thu Jan 03, 2013 at 01:22:06 PM PST

    •  I don't see that at all, (6+ / 0-)

      My prediction is that "retirement" will become mandatory at a certain age(?) at some time in the near future. How you survive is up to you. ( I will be 59 next week by the way.)

      "Remember, Republican economic policies quadrupled the debt before I took office and doubled it after I left. We simply can't afford to double-down on trickle-down." Bill Clinton

      by irate on Thu Jan 03, 2013 at 02:36:21 PM PST

      [ Parent ]

      •  That would open an entire new and interesting (2+ / 0-)
        Recommended by:
        Ian H, BlueDragon

        field of civil rights litigation.

        •  You assume "the law" will provide any remedy. (5+ / 0-)

          How much recent history does it take to make it plain that upward wealth concentration = (among other things) making "not illegal" all the shit that fosters that upward stripping of wealth? Either by re-writing "the law" that we are generally stupid enough to believe is some honest-broker hand that fairly treats all that come before "it," or via the "management" of all the mechanisms of enforcement and adjudication.

          Look at your various debt contracts (mortgages, credit cards, auto loans, "payday loans," etc.), and how debts can be collected and what can ever be discharged in bankruptcy. Look at what the "Justice Department" BWAA-HAAAW-HAAAW is or mostly is not doing about the wholesale flood of COUNTERFEITING that is the derivative/securitization "financial industrial complex" racket, all that Too-big-To-Fuck With simple and complex theft in that "sector." Them fokkin' Bankstas sure seem to be, ahem, "above the law." You got to love the "consent decrees" that the PTB are using to stick it further up our backsides behind a miasma of "enforcement."

          This is the day of the Henry Potters: It's all about using the power to indebt to steal everything that's rent-able and then bleeding us out with ever-increasing rents.

          How's it feel to be becoming a nation of mostly debt serfs?

          "Is that all there is?" Peggy Lee.

          by jm214 on Fri Jan 04, 2013 at 11:39:16 AM PST

          [ Parent ]

  •  Levels Of Poverty Not Seen Since The Depression (24+ / 0-)

    However, the bright side is that in 15 years the whole demographic bulge of the Baby Boom will either be above the age of 65 or dead, and that there may actually be a labor shortage that will benefit people who are currently 50 or younger.  Which is good, because grand-dad will probably be living on a day bed in the tv room.

    Oh and the stock market? Gonna suck, because all those seniors will be dumping their portfolios.  

    There’s always free cheddar in a mousetrap, baby

    by bernardpliers on Thu Jan 03, 2013 at 01:23:45 PM PST

  •  And when the rich people have all the money.... (14+ / 0-)

    it won't matter much, will it?

    All kidding aside, I agree that the future is pretty bleak, especiall for our children - I'm 57 and have 4 in their 20s.

    We, collectively, have pretty well destroyed this country - and the world, for that matter - and the only question is how long we can limp along pretending that things are OK while we slide down the slope towards destruction.

    Ah, well, at least the rich will keep getting richer.... gotta make sure of that!


    Against stupidity the gods themselves contend in vain. Friedrich Schiller

    by databob on Thu Jan 03, 2013 at 01:26:50 PM PST

  •  my son: "your generation pretty much F*cked mine" (5+ / 0-)

    probably true, I answered.  So what are you going to do about it?

    It's not a fake orgasm; it's a real yawn.

    by sayitaintso on Thu Jan 03, 2013 at 01:31:40 PM PST

    •  Depends (14+ / 0-)

      on who in my generation you're talking about. I totally agree if you're talking about. I'd agree if you're gnashing your teeth at Reagan's flunkies, Bush I and Bush II's, but the government economy was doing fairly well along about 2000. We've had two wars and a bunch of military hardware purchased since and somebody's got to pay for it. Bush II advised people to go shopping after 9/11 and he wasn't kidding. The interest on all those credit card purchases kept our creditors happy until the whole country sailed off the cliff like Wiley Coyote.
      Remember Gore wanted to put the then solvent Social Security in a lockbox? Remember George Bush II pulling SS vouchers out of a file and saying they weren't worth the paper they were written on? Purportedly over 50% of the US population voted for the latter. If you want to blame them it's AOK by me, but in the meantime some of the rest of us lost our future as well and are now in the same boat you will be. We all need to fix what we can with understanding and sympathy because, as the diarist says it could get even uglier.

      "We are monkeys with money and guns". Tom Waits

      by northsylvania on Thu Jan 03, 2013 at 01:55:48 PM PST

      [ Parent ]

    •  that's what I tell my old man (2+ / 0-)
      Recommended by:
      Ian H, Joe Bob

      He's seventy, I'm 42. He agrees.

      •  well, i'm closer to your age than his (0+ / 0-)

        technically, I'm the biggest and last year of the baby boom.

        So lay off the altekakkers... your day of being Abe Simpson is coming sooner than you think.

        It's not a fake orgasm; it's a real yawn.

        by sayitaintso on Sun Jan 06, 2013 at 05:00:06 PM PST

        [ Parent ]

  •  few people under 40 believe (12+ / 0-)

    that Social Security will be there when they are of an age to collect.

    The Boomers are pissed that they won't collect the full amount after having paid in for so long, but they won't feel the pinch the way their kids and grandkids will. After all, those kids and grandkids will have to pay in too (no reason for the 1% to get rid of a perfectly good regressive tax such as the payroll tax, just because they got rid of SS!), but 100% of it will be diverted to Wall Street.

    The younger generation understands that pensions, whether public or private, are a thing of the past, and that their lives will probably have to be lived without them.

    Perhaps that will change in the future, but I am not terribly hopeful.

    "In America, the law is king." --Thomas Paine

    by limpidglass on Thu Jan 03, 2013 at 01:42:50 PM PST

  •  this thread should have a poll... (8+ / 0-)

    ...How many are/will be financially ready for retirement at 65?  75?  85?  Probably never?

    As a 62 yo person who has always worked with back, hands and head in that order, retirement is a bad joke.

    Like many, it'll be SS, whatever I've got in the house at the time, a few thousand here and there and a retirement gig.  I'm hoping my small business can keep me going one way or the other.  WalMart greeters don't get paid enough.
    Of course, maybe by then, selling weed will be legal...

  •  Since the federal government is the issuer of (10+ / 0-)

    currency, it can pay for all goods and services it deems needful with the currency it prints. The only reason to tax is to keep the currency circulating and counter the urge to hoard.
    However, what the Congress, tasked with managing the currency, has been doing is rationing its availability for the purpose of exercising selective control over segments of the economy. Why would the Congress want to do that? Because alternating deprivation with benefits is how they have grown accustomed to retaining their positions.
    We have elected a bunch of extortionists to Congress.

    We organize governments to deliver services and prevent abuse.

    by hannah on Thu Jan 03, 2013 at 01:55:13 PM PST

  •  Regarding this statement (2+ / 0-)
    Recommended by:
    NoMoreLies, Sparhawk
    2) With the expiration of the temporary 2% payroll tax cut, 77% of households will see their taxes go up. Indeed, every single income group will, on average, see their taxes increase
    This is the chart you are referring to.

    The very tiny taxes affecting almost all income groups are based on not continuing the Payroll Tax HOLIDAY -- where SS contributions were suspended temporarily during the most dangerous period of our recent recession.

    It is absolutely unrelated to the Bush Tax Cuts, which only affect the highest earners, on this chart.

    The original data comes not from Matt Yglesias, but from the Atlantic, which puts forth an agenda-free analysis.

    Denial is a drug.

    by Pluto on Thu Jan 03, 2013 at 02:03:22 PM PST

    •  I'm not sure where we disagree (0+ / 0-)

      I said the payroll tax cut (you say HOLIDAY, but I'm not sure what the difference is supposed to be) is "temporary" in the very quote from my post you highlight.

      I did not say the data was "from" Yglesias, but "via" Yglesias, which acknowledges that I saw the chart there first. You should note that the chart does not come from the Atlantic; the article you link cites the Tax Policy Center...just like my chart does.

      Finally, the temporary payroll tax cut/holiday obviously post-dates Bush, but its expiration is part of the "fiscal cliff."

  •  I know that this is oversimplified. (2+ / 0-)
    Recommended by:
    the autonomist, FG

    But it seems to me that one big problem with social security that I haven't really heard discussed very much in the media is that the SS tax is not really progressive.  Unlike medicare there is a cap on the amount of income that is taxed as FICA.  I can't remember the exact amount, but I think it's somewhere just above $110,000.  One study I read by the CBO indicated that about 50 to 60% of the projected deficit in SS would be gone if the cap taxable FICA salary was removed.  That would also have to entail that you didn't get proportionally more in pay out when you started to collect - some greater amount than those who contributed less in their working years, but not a directly proportionaly increase.  Yes, this is a political hot potato and it would especially impact the self-employed since they pay 100% of FICA and FICAMed, but it should be in the mix.

    As far as defined benefit pensions - except for about 20 years from around 1955 to 1975 these were, in my opinion, a scam and I would never rely on one.  I'd rather take my chances with a 401k-type retirement fund, as uncertain as that may be.  And in fact did, and it worked out fine, but I had a very long time horizon.  Anyway, here's why I think that defined benefit pension plans ended up being a scam, not that I recognized that at the time.

    Defined benefit pensions were in favor by both industry (at least "big" industry) and workers as compensation in lieu of direct compensation in the form of wage increases.  Many "blue collar" workers who were union members during that period had grand parents who were born in the last decade of the 19th century and the first decade of the 20th (and I was one in the late 1960s for a few years) and we saw how hard it was for them to make ends meet and pay for sick care as they reached their 60s (remember that there was mandatory retirement of 65 back in the day) and the promise of a decent pension and health insurance in our old age was appealling.  Additionally we were doing pretty darn well in terms of wages.  So, workers and unions were happy with deferred presumably guaranteed benefits and employers were happy since they didn't have to pay out immediately in the form of wages.  Herein lies the problem and it affect both the private sector and public sector for different, if related reasons.  By the 1980s the profits (and tax collections) were way down and the number of retirees was starting to increase at an alarming ratea.  The fact that pension plans had been allowed to be underfunded because, from an actuarial point of view, they had had enough to meet pay out obligations caught up to both private companies and state and municipal governments.  This is clearer for state and municipal governments who had to balance their budgets and for political reasons couldn't raise taxes very much.  Many had gone to a non-contributory retirement plan (state of city paid 100%) for a 50/50 match plan in the '70s or '80s with the up front reason that it was in lieu of raises, but in backgound was the fact that most employees were on the government defined benefit (pay out plan) and as long the retirement fund was actuarial solvent for a defined period of years they didn't have to put money in.  However, revenues remained low and retirements increased an some pension systems were in trouble or would be in a few years.  This is the rational that Rick "The Dark Lord" Scott used when he changed the rules last year and required state employees to pay 3% of their retirement.

    Personally I'd like to see regulations that ensured honest management with reasonable fees of investment vehicles similar to 401ks instead of defined benefit plans.  And, this being heresy of the first order, these should apply to everyone including federal employees, fire and police officers, and the military.  Yes, these are risky, but the traditinal pension has also proved to be risky as it depended more on the wims of the economy, boards of directors and legislators than was supposed to be the case.  Just some thoughts and if they aren't worth much I can live with that.  I taught school for 35 years.  I'm used to people thinking I'm full of it.

    Any Jackass can kick down a barn. It takes a carpenter to build one. - Sam Rayburn

    by Old Gray Dog on Thu Jan 03, 2013 at 02:27:40 PM PST

    •  I will soon retire with a defined benefit plan (11+ / 0-)

      and I am thrilled.  My state actually paid most of their obligations, so the plan is in good shape.  I have been paying 2-3% into it all my working life, and they didn't promise the moon--a little subsidy of post-retirement insurance and up to 60% of earnings.  Fifteen years or so ago, they offered a mixed plan with 30% defined benefit and a 401k sort of thing.  The people who went for that are all going to have to work longer than they planned because they lost so much money.

      I would like to see strong regulation of state plans, so that the states are required to pay as they go for promised benefits.  Getting rid of defined benefits throws us all at the mercy of the markets and manipulators.  

      We should not be fighting about equal pay for equal work and access to birth control in 2012. Elizabeth Warren

      by Leftleaner on Thu Jan 03, 2013 at 03:08:43 PM PST

      [ Parent ]

    •  My defined benefit plan is a real godsend. I think (10+ / 0-)

      everyone should have a retirement like mine. Working forty years in the same school district helped, of course.

      •  You hit the nail on the head--a defined (3+ / 0-)
        Recommended by:
        jfdunphy, NapaJulie, divineorder

        benefit plan is wonderful.

        But there are next to nonexistent today.  With the exception of the Boomer and older generations who did get and stay in a job (mainly public service as in a school district, etc.) for forty years now, almost no one (including Boomers) have them, anymore.

        That has to be one of the biggest misconceptions out there--that MOST Boomers have a defined benefit retirement plan.  Not so, folks.

        And, it's not likely to happen any time soon.

        Senator Tom Harkin has a plan to make it mandatory to have be private retirement savings account.  Here's the link to his USA Retirement Fund.

        Initially, it is claimed that one can "opt out." But I don't buy for a minute, that this plan is not intended to become mandatory (meaning no opt-out) in time.

        I believe this, because with mandatory health insurance coming online in 2014, does anyone actually believe the folks who won't qualify for a health premium (exchange) subsidy (couple making more than $46,000) but are more or less working poor, are going to turn around and voluntarily signup to further impoverish themselves in order to save for their retirement?

        So, while I'm open to looking into this savings vehicle further, I'm not sold on it.  I would need to see the details, first.

        Here's an excerpt from Harkins's plan:

        Employers’ only obligation with regard to the USA Retirement Funds would be to automatically enroll employees, ensure that employee contributions are processed, and make modest contributions.  importantly, employers would not “guarantee” the USA Retirement Funds or have any residual responsibility to provide additional funding or make up shortfalls.
        But I'm glad to see that at least you will have a decent retirement, Lorikeet.  


        “If a dog won’t come to you after having looked you in the face, you should go home and examine your conscience.” -- Woodrow Wilson

        by musiccitymollie on Thu Jan 03, 2013 at 03:51:29 PM PST

        [ Parent ]

    •  I'd like to see insurable options for 401k money (4+ / 0-)

      Right now we are forced to put our retirement money into completely unbacked accounts.  Even conservative incestors have taken big hits and the big fiancial firms siphon off any profits as fast as they can as fees, regardless of how well your account does or doesn't do.

      Democrats give you the Bill of Rights; Republicans sell you a bill of goods!

      by barbwires on Fri Jan 04, 2013 at 12:56:31 PM PST

      [ Parent ]

    •  Federal Employees... (1+ / 0-)
      Recommended by:

      ...hired after 1987 do have the Federal equivalent of a 401(k).

      It's called the Thrift Savings Plan -- and they can contribute up to 10% of their earnings to this with the government adding a matching 5%.

      As a retired Federal employee, I am living on my pension and money from my TSP account. I will be filing for Social Security when I reach age 70, unless my financial situation becomes so dire that I have to apply for it before then.

    •  SS was designed to be taxed regressively so the (3+ / 0-)
      Recommended by:
      Kenneth Thomas, Noor B, worldlotus

      conservatives couldn't call it welfare. And 401Ks have failed the majority of boomers just  like the critics warned.

      Defined benefits pensions worked far better for working and middle class people than this Wall St invention. And Wall St is not in the "How are the citizens doing business", and are not to be trusted with the nations retirement, survivor benefits, and support for the disabled.

      Weaken SS first. Drive home the false narrative that it is insolvent and then get recipients agree to have it handed over to Wall St.

      When FDR heard this idea he laughed it out of sunshine. And handing SS to Wall St is an idea as old as SS. And guess who's idea it is? Wait for it....Wall Sts.


  •  Unemployment is much higher than 8%. (12+ / 0-)

    That's the pretty "official" number, but it's also a bullshit number. It's more likely between 12-20% depending on the area of the country, and the demographic of person involved.

    This is a catastrophe waiting to happen.

    We must impinge on this President and Dem Congress that they absolutely cannot raise the eligibility age for Medicare, nor benefits for Medicare, nor Chain CPI SS, etc, etc.... These programs should simply be left alone and kept as is unless they want to add more benefits and increase the monthly payouts, or lower the eligibility age for the programs.


    Corporations before people.... it's the American way!

    by Lucy2009 on Thu Jan 03, 2013 at 06:30:04 PM PST

    •  Social Security needs to be increased (5+ / 0-)

      Precisely because of the end of private pensions. Although it's still the socialization of private costs, what is the real alternative?

      I agree that unemployment is worse than what U-3 says and that jobs should be job 1 for the administration. But as it  happens, U-3 is highly correlated with U-6, so it doesn't make much difference in terms of trends which one you look at.

      •  Correct. And there needs to be some bonus for (3+ / 0-)
        Recommended by:
        ladybug53, Lucy2009, Kenneth Thomas

        short term military service too. Pension plans are gone. Period. When SocSec came into being it was standard for most legitimate companies to provide them. Now there are very few and most likely the folks who get them are the uber wealthy.

        If... the machine of government... is of such a nature that it requires you to be the agent of injustice to another, then, I say, break the law. ~Henry David Thoreau, On the Duty of Civil Disobediance, 1849

        by shigeru on Thu Jan 03, 2013 at 07:41:54 PM PST

        [ Parent ]

      •  "Socialization of private costs" (5+ / 0-)

        Is something we've borne quite enough of lately, to the benefit of for example the Wal-Marts of the nation, whose employees can't even function economically without food stamps and Medicare.

        We have simply allowed our money to be stolen by the very wealthy.  It is time we clawed it back hard.

    •  U3 versus U6 unemployment (3+ / 0-)
      Recommended by:
      Lucy2009, Mr Robert, Noor B

      Each month, when the media duly report the official unemployment number, what they are reporting is actually U3 unemployment.  That is currently at 7.7%.

      But there's another number, which is U6, that reports unemployment (including "discouraged workers") plus underemployment (people working part time who want to work full time).  That number is around 14%.

      In my opinion, looking at both of these numbers together provides the best overview of the unemployment situation.  And while it's rather unscientific, if I were looking for a single number to provide a sense of the pain of unemployment in our country, I might just take the average of these two, which would give a rate of around 11%.

      Political Compass: -6.75, -3.08

      by TexasTom on Thu Jan 03, 2013 at 07:04:24 PM PST

      [ Parent ]

      •  Makes sense. The other thing is there are (7+ / 0-)

        a tremendous amount of people who are working low wage and/or minimum wage jobs, and/or 2-3 of these jobs just to try and make ends meet. Yet those same jobs don't provide retirement pensions, medical benefits, etc.  So I don't know the number, but I suspect the percentage is quite high of folks who are "employed" but not doing anything that will ever bring them any real financial security/stability much less any sort of retirement or savings possibilities. So that needs to be taken into consideration as well when we talk about tinkering with Medicare and SS.  

        It hurts out there for A LOT of people. My hubby has a very small business selling art work. His public are middle class for the most part, with some working and upper classes thrown in. He is doing the same shows with the same products now as 6 years ago but making about 50% less money. The body count at these Home and Garden shows has simply dropped enormously, and the folks who do still attend don't have the discretionary income they used to have. We feel it first hand what is going on with the middle class and it's real, and it's very deleterious for individuals and small business owners like ourselves.

        Ugghhh..... so much that could be done that could be so beneficial to the many, but the 1% and their puppets in D.C. won't let that sort of legislation thru. Very frustrating.  

        Corporations before people.... it's the American way!

        by Lucy2009 on Thu Jan 03, 2013 at 11:03:03 PM PST

        [ Parent ]

  •  Retire at 55 (0+ / 0-)

    The easy answer is that the government should increase Social Security benefits by 15% and lower the eligibility age to 55. The payoff would be immediate and very positive. I believe that Obama will propose this to Congress in the next few weeks.

    "I'll believe that corporations are people when I see Rick Perry execute one."

    by bink on Thu Jan 03, 2013 at 06:57:03 PM PST

    •  No chance of Obama making this proposal... (4+ / 0-)
      Recommended by:
      Sunspots, Alumbrados, Joe Bob, Mr Robert

      ...I just can't see him making such an unexpected move and going against the Beltway conventional wisdom.

      Aside from that, where would the money come from to pay for such a change?  Simply eliminating the cap on the payroll tax would keep the Social Security at the current benefits level solvent, but wouldn't pay for such an expansion of benefits.

      A more useful alternative would be to drop the eligibility age for Medicare to 55.  Unfortunately, money issues again come up, and I can't see the president going against the Beltway CW on this anymore than on your idea.

      Political Compass: -6.75, -3.08

      by TexasTom on Thu Jan 03, 2013 at 07:08:03 PM PST

      [ Parent ]

    •  Why do you believe that, bink? (4+ / 0-)

      I am genuinely curious...

      I believe that Obama will propose this to Congress in the next few weeks.

      It is time to #Occupy Media.

      by lunachickie on Thu Jan 03, 2013 at 09:31:43 PM PST

      [ Parent ]

  •  Recall that the whole idea behind (6+ / 0-)

    tax breaks for private sector pension plans was that the public policy benefit was that private plans would be a strong part of retirement, taking the burden off of pensioners having to rely on social security alone, and thus easing the burden on social security. Yet when corporations decided to cut back on paying into pension plans, cut medical benefits, and shift the burden onto the individual, corporations still got tax breaks. For years, experts predicted that this would undermine the retirement plans for many americans, and thanks to the excesses of the Bush administrations, they were undermined quicker and harder than most experts predicted. Under Judge Roberts, corporations are people, and probably the only "people" who can survive the current retirement plan scenarios facing most living breathing Americans.

  •  People Must Be Taught (6+ / 0-)

    how to turn retirement savings into cash flow that doesn't disappear.  My father knew how to do it.  My grandfathers did not and their families suffered for it.  My father had a decent though not extravagant life (My parents had 5 kids so extravagance was impossible).  He did NOT base his retirement plan on Wall Street and taught us to avoid it.  I have Wall Street funds but I do not depend on them for yearly cash flow.  I have more conservative tools for that.  We were blessed with one small inheritance from one member of my husband's family.  My father never gave us money.  On  rare occasions, after all the sibs were on their own, he loaned us money and charged us interest  for the privilege.  We were, and are, grateful for his lessons.  

    Thankfully, after years of living very frugally, we will be able to loan money to our children and grandchildren.  Why loan?  So money will be available to loan to our great grandchildren for the things they want to accomplish and opportunities that come their way.  We won't however, loan them money to put on the stock market. That's  something they should be able to afford on their own before they do it.

    Getting to this point cost us a lot of turkey legs and more than cool  winters but we always had good music, good books, and good friends so the cost wasn't all that high.

    Newt 2012. Sociopath, adulterer, hypocrite, Republican.

    by tikkun on Thu Jan 03, 2013 at 07:18:09 PM PST

    •  I would like to hear more about how you did this, (4+ / 0-)

      tikkun.  How about a diary?

      I have Wall Street funds but I do not depend on them for yearly cash flow.  I have more conservative tools for that...Thankfully, after years of living very frugally, we will be able to loan money to our children and grandchildren.

      "Religion is what keeps the poor from murdering the rich."--Napoleon

      by Diana in NoVa on Thu Jan 03, 2013 at 07:34:51 PM PST

      [ Parent ]

      •  I might...It's a huge topic (7+ / 0-)

        and people need to understand that capital is at the base of it.  Personal capital.  I never save money.  "Save" doesn't mean anything and it distracts people from understanding how capital works.  I have money for short term spending, money for long term spending, reserves, and capital which I place where it can produce cash flow.  When cash flow dries up, the capital gets moved to another cash flow source.  Capital is never spent, it is moved.  When your capital earns money, you put 10 percent of the profit back into capital and divide the rest for your short term spending, long term spending...etc

        Most people here don't understand the economic meaning of the term, "mutual".  Some of them are involved in mutual systems through mutual banks ie banks that are 1. not owned by stock holders and 2. are mutually owned by the people who use them.  . Because there are no stockholders to please, mutual savings banks are often very conservative with how they invest deposits. As a result, they tend to survive periods of financial distress relatively well. This was especially true during the Great Depression. In the United States, most mutual savings banks are in the Northeast.

        There are also mutual life insurance companies.  The same thing is true, They have no stock holders and all profits are returned to the POLICY HOLDERS.  It's hard to find them because stock companies got their hands around their necks but they still do exist.  They don't make a lot of money for their policy holders but they are stable. and that's the first task for retirement money.  STABILITY.  When the winds of financial disaster blow, the person with a stable base does not get knocked over.

        Real Estate.  This is still a very important part of the mix and always will be.  The first house someone buys should 1. be easy to rent and 2. easy to sell....That means NO BIG HOUSES...unless they are multifamily.  The perfect first house is the smallest house in the best neighborhood you can afford.  A big, single family house is an indulgence and a monkey on your back.  I always had a house to live in and a house to pay for it.  Especially when I was dirt poor.  A poor person cannot afford one house  A duplex or triplex accomplishes the same thing for less money...usually.  Even if the value of a house is upside down, if you have tenants to pay for it, eventually everything rights itself.  Most of the my current cash flow comes from my properties.  I use leverage as often as I can to purchase property so my cash flow doesn't get out of whack.  

        Stock: This is the last thing people should be buying.  They have NO CONTROL over it.   Stock is ok as long as you don't try to use it for regular economic maintenance and as long as you are covered if the stock or the market tanks.  I buy a lot of  dividend stocks because they pay rent for their space in my portfolio,  I always have a target for when I'm going to dump a stock fund or stock and when I'm going to buy a stock.  I learned the hard way with stock, never to get greedy.  Just pick a profit percentage and stick with it.  Sell the stock when you get to the point where you've met your goal for that stock. OF course tax considerations are also part of the mix.  When you liquidate a stock, there are tax consequences.  (another reason stock is my least favorite form of investment)  If you hold it for a certain period of time, you have less tax consequence.  My stock money is reserve money because it doesn't provide adequate regular cash flow.  I really don't like the stock market.

        Anyway, that's my crash course in stable personal finance.  

        Newt 2012. Sociopath, adulterer, hypocrite, Republican.

        by tikkun on Thu Jan 03, 2013 at 08:30:44 PM PST

        [ Parent ]

        •  Ah, but my retirement fund (0+ / 0-)

          Was employer contribution and parked in stocks.  Over which I had no say.  Same with my 401k.

          •  The Whole "Official" System Is Rigged (0+ / 0-)

            to the market.  It's hard for us civilians to find ways to circumvent the market.  I have a small, standard issue teacher's pension but my main income is from my rental properties.  I didn't get into the rental business because I love it.  I got into it because it gave me some control of the affects of inflation in my life and because it gave me control over cash flow...i.e. I don't have to spend it down to get the most benefit from it.  Make no mistake, it is a business and like all businesses much of the education i received was learned on my butt.   But, even then, I knew that every dime I "spent" on my property was actually money placed in illiquid capital investment that was paying me a hefty dividend, about 10% ROI.  My husband never had a atraight gig so he has no retirement except Social Security.  Besides that, he's always had to pay both ends of Social Security so the whole notion that Social Security is some kind of damned entitlement is a double insult to him.

            Newt 2012. Sociopath, adulterer, hypocrite, Republican.

            by tikkun on Sat Jan 05, 2013 at 09:57:56 AM PST

            [ Parent ]

        •  This is so interesting, tikkun! (3+ / 0-)
          Recommended by:
          Mr Robert, Odysseus, worldlotus

          You appear to be managing your assets in a very sophisticated way.  Wish I had your financial smarts.  My IRA is parked in the stock market because I don't know where else to put it. (Almost a third is in cash, however, in case there's a crash.)

          Other than putting part of all my mutual funds in cash and having a money market savings with Navy Federal Credit Union, I don't know how to make any money.

          We have a little apartment downstairs in our house that we sometimes rent to flight attendants, but we can't rent it again until summer.  And even when we do rent it, we charge half of what the market will bear.  That's so the flight attendants can afford it.  We like to rent to them because they're gone about 60 percent of the time.

          "Religion is what keeps the poor from murdering the rich."--Napoleon

          by Diana in NoVa on Fri Jan 04, 2013 at 04:50:42 AM PST

          [ Parent ]

  •  this word you use (0+ / 0-)


    What is this word? I'm 42 years old and have had a pension once, when I worked for a Lutheran social mission.

    Other than that, this "retirement" thing you speak, of, I don't know what it is.  It sounds old fashioned.

    Please explain.  I'm going to be dependent on Social Security and a variety of other programs when I am old.

  •  Want to bet that almost all the folks who think (1+ / 0-)
    Recommended by:
    Mr Robert

    they will retire at 55 are either under 30 (good luck) or are brokers?

    If... the machine of government... is of such a nature that it requires you to be the agent of injustice to another, then, I say, break the law. ~Henry David Thoreau, On the Duty of Civil Disobediance, 1849

    by shigeru on Thu Jan 03, 2013 at 07:43:30 PM PST

  •  Fix The Debt Scam. (9+ / 0-)

    "A Pension Deficit Disorder: The Massive CEO Retirement Funds and Underfunded Worker Pensions at Firms Pushing Social Security Cuts"
    This report analyzes the retirement policies of the U.S. corporations leading the “Fix the Debt” campaign, which is calling for reduced spending on senior citizens’ benefits as part of a deal on the national debt.
    A major player in the national debt debate, the “Fix the Debt” campaign, is arguing that cuts to Social Security and Medicare are necessary to avoid economic disaster. Meanwhile, the corporations leading this campaign are contributing to Americans’ retirement insecurity by funneling enormous sums into their CEO retirement accounts while underfunding their employee pension funds.

    Key findings:

        The 71 Fix the Debt CEOs who lead publicly held companies have amassed an average of $9 million in their company retirement funds. A dozen have more than $20 million in their accounts. If each of them converted their assets to an annuity when they turned 65, they would receive a monthly check for at least $110,000 for life.
        The Fix the Debt CEO with the largest pension fund is Honeywell’s David Cote, a long-time advocate of Social Security cuts. His $78 million nest egg is enough to provide a $428,000 check every month after he turns 65.
        Forty-one of the 71 companies offer employee pension funds. Of these, only two have sufficient assets in their funds to meet expected obligations. The rest have combined deficits of $103 billion, or about $2.5 billion on average. General Electric has the largest deficit in its worker pension fund, with $22 billion.

    American Heart Association: Diet Soda can cause type 2 Diabetes. "Circulation" July 23, 2007. Read it for yourself.

    by jeffrey789 on Thu Jan 03, 2013 at 09:07:38 PM PST

  •  Thanks for this post! (2+ / 0-)
    Recommended by:
    Kenneth Thomas, worldlotus

    A critical player politically is the rapidly increasing age of our pop.,,, and their concerns- which are growing more progressive in orientation-
    frankly cause they are scared shitless.

    demography is so often overlooked.

    in singapore, i did a photo series entitled 'the recyclers,' capturing the many aged carting around on their corrugated/can routes everyday- hoping to get enough for fish w/ their rice.

    i don't call it safety net for our elderly anymore.
    i call it 'hide the old' entitlements/


  •  With The Paltry Amount I've Managed To Save In (3+ / 0-)
    Recommended by:
    Mr Robert, Odysseus, worldlotus

    my 401k plan (which hasn't gone anywhere since Bush II took office in 2000), plus the equity my husband and I have in our home (luckily we didn't buy our house at the height of the housing bubble, and didn't let the banksters talk us into stripping the equity out of the home by refinancing over and over), plus Social Security, I should be able to scrape by. I know I am one of the lucky ones.

    One of the unlucky ones is my unmarried friend from high school - she has always worked at minimum wage jobs, hasn't saved a nickel, and doesn't own a house. She also is not in the best of health, and probably won't be able to work much past age 65 (she is age 59 now). Since she has no husband or children who could help support her in her retirement, she is going to be completely dependent on SS. She MIGHT get a small inheritance when her mother passes away (her father is deceased and she has no siblings), but she can't count on it - her elderly mother is in a nursing home, and the nursing home has put a lien on her mother's house, to make sure the nursing home bills get paid before Medicaid will kick in to pay the cost.

    •  The President needs to start talking about (3+ / 0-)

      stories like your friends and yours. Retirement really needs to be put on the public agenda in a big, progressive way.

    •  The singles and childless couples (2+ / 0-)
      Recommended by:
      Mr Robert, worldlotus

      are a growing demographic.  They won't be able to depend on their kids for help as they age and become infirm and/or demented.  (Not that all aged folk do, but a lot do.)  I think we will end up with tent city or under the bridge boomers that are as disposable as their diapers if current political trends hold.

      Democrats give you the Bill of Rights; Republicans sell you a bill of goods!

      by barbwires on Fri Jan 04, 2013 at 01:11:29 PM PST

      [ Parent ]

      •  The flip side of this situation (1+ / 0-)
        Recommended by:

        is couples with children who are unable to "launch" successfully because of the cost of education/lack of job opportunities. The children continue to depend on their parents for financial support through their 20s (and sometimes longer), making it even more difficult for the parents to save for retirement.

  •  Many Complaints (0+ / 0-)

    However no suggestions on how to fix SS

    One thing's for certain, the 113th Congress is as prepared as the 112th Congress to fix this issue.  The 114th Congress will need to deal with this problem.

    And the game of kicking the can down the road continues ....

  •  The number of homeless and poverty-stricken (0+ / 0-)

    boomers is going to skyrocket to currently unimaginable levels before 2020 gets here.

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