The OT thread V1

[cockerpunk]

The structure is exactly the same though. While you make a point of one being open about it, and the other not, the "a rose is a rose is a rose" logic still applies.

A Ponzi Scheme involves one group, the initial investors getting payments from the next level of investors, and then those investors getting paid by the next group. The ratio of 1:2 for old:new investors meant a larger return on 'investment' but there was no investment - just a transfer of wealth directly. At a point you run out of people willing to invest. It is a Virtual Investment. There is no real money there.

The SS system, a Pay-as-you-go system, initial contributors (once young people) get paid by the new contributors directly, with a 1:14 ratio, and a low return on...well, not investment. It is a direct transfer of wealth. Backed up by the treasuries and some bonds were taken out extra to account for baby boomers, but in the end, since it isn't an investment program when your investors run low in numbers, I mean, Gen X, you run out of money. The ratio is 1:4 now also. It will be getting worse soon. Also a Virtual Investment.

It is a different label, but the structure works in SS because it is both up-front and mandatory. Except is isn't working, since Baby Boomers didn't have enough kids. So it is top heavy. Too many investors needing payment, not enough tax sheep. I mean sheeple. I mean....us. You and I.



80% less then paid in. Depleted by the time you or I or Steve retires.



YES. Come on. This is bad.

The direct investment structure, as Chile, Denmark or others used resulted in a return that was higher per input.

This isn't a maybe. The market return for investing in a private pension system the same amount that comes out in payroll taxes would exceed what SS pays. Even for those who are on the bottom of the income curve, choosing the safest option:

https://www.cato.org/publications/po...ocial-security





Potentially twice as much. Even at the lowest rate, they still would result in more income. But lets look at this some more.

If you look at Table 4 the average worker, using SS vs private investment, would result in $450k in retirement benefits in the private account vs about $100k for the payout from SS.



Chile allowed people to choose to do direct investment, to a private pension fund. The capital in their fund is about 53% of the GDP total, which for the US would be $8T in size. All workers and employees must pay into the system. Mandatory contributions amount to 10% of the monthly income up to $2800. Similar to our 12.4% Payroll tax. They invested in the market so the return was far higher than the average 2% 'return' that we pretended to have here.

Now, there are some problems with that - something most conservatives haven't been to quick to say up front. Due to the structure people are not paying as much in as they should have - nearly 50% are not paying in, and due to that the Chile program is failing. So they are putting in closer to 5%, and that is causing some problems. So, yes, personal responsibility is a factor, and if it is not mandatory, there are problems.

________________________________________

In that though, we are already mandated the 12.6% - forcing us to take it out is already done. HOW we use that money is the proper discussion. The Pay-As-You-Go system, which sounds great, is both: 1) structurally is a virtual investment, there is only a promise of future payouts, no actual items, like stocks. 2) pays out far less than private investment.

Using the Singapore Model you can stack up the medical payments, allowing you the 16% out already to both do private investment (which gives you a higher return) and cover catastrophic health care.

Even if you skipped that, the 12.4% taken out, or even as suggested 50% taken out, would give you far higher returns, especially for our generation who will be getting a 80% return on our 'investment.'

I just looked up a retirement calculator. Forbes has 8% on average return right now, down a bit.

At $50k average for your life, you are looking at 12.4%, or 6,200 a year in payroll tax. That is $279k into the retirement pot. The return on that will be about $1,650,000. So, that is about a 6 times return. 600%.

vs. about $223,000 in the virtual SS payout system.

One results in a hard return of about 600% for your money invested, and one results in a virtual return of about 80% -

Your money. Which one would you prefer?

Trick question!

Doesn't matter. For that money we are paying it, we, you and I, are most likely getting nothing.

if you remove the cap from SS, it becomes solvent forever.

/thread

[pbjosh]

Not really - you would have to increase payouts for high income earners. Same problem.

But then, if we had invested in private funds instead, there would be no 'running out' either. Because it wouldn't be budget based.

Oh, and we would get 6 times as much payout. That is still there.

Australia is all private vs the US. Just saying:

https://danieljmitchell.wordpress.co...curity-reform/

There are two serious problems with America?s Social Security system. Almost everyone knows about the first problem, which is that the system is bankrupt, with huge unfunded liabilities of about $30 trillion.

The other crisis is that the system gives workers a lousy level of retirement income compared to the amount of taxes they pay during their working years. Younger workers are particularly disadvantaged, as are African-Americans because of lower life expectancy.

These are critical issues, but perhaps looking at a couple of charts is the best way to illustrate why the Social Security system is inadequate.

Let?s start by looking at some numbers from Australia, where workers set aside 9 percent of their income in personal retirement accounts.

This system, which was made universal by the Labor Party beginning in the 1980s, has turned every Australian worker into a capitalist and generated private wealth of nearly 100 percent of GDP. Here?s a chart, based on data from the Australian Prudential Regulation Authority.

Have to come back and edit: That is based on the assumption that the high end earners some some inexhaustible income. They don't. That there is some unlimited pool in taxes and wealth and related seems to be a firm argument from your side of the pool, but we are looking at a $30 Trillion shortfall in US SS alone - the total WORLD GDP is $77T.

There isn't that much money out there.

http://iowahawk.typepad.com/iowahawk...ion-a-day.html

[pbjosh]

Feed Your Family on $10 Billion a Day

Seems like these days I hear a lot of whiney whiners whining about "out of control government spending" and "insane deficits" and such, trying to make hay out of a bunch of pointy-head boring finance hooey. Sure, $3.7 trillion of spending sounds like a big number. "Oh, boo-hoo, how are we going to get $3.7 trillion dollars? We're broke, boo-hoo-hoo," whine the whiners. What these skinflint crybabies fail to realize is that $3.7 trillion is for an entire year - which translates into only a measly $10 billion per day!

Mister, I call that a bargain. Especially since it pays for all of us - you and me, the whole American family. Like all families, we Americas have to pay for things - health, food, safety, uncle Dave America with his drinking problem. And when little Billy America wants that new quad runner they promised, do Mom and Dad America deny him? No, they get a second job at Circle K, because they know little Billy might have one of his episodes and burn down the house.

So let's all sit down together as an American family with a calendar and make a yearly budget. First, let's lock in the $3.7 trillion of critical family spending priorities; now let's get to work on collecting the pay-as-we-go $10 billion daily cash flow we need.

12:01 AM, January 1
Let's start the year out right by going after some evil corporations and their obscene profits. And who is more evil than those twin spawns of Lucifer himself, Exxon Mobil and Walmart? Together these two largest American industrial behemoths raked in, between them, $34 billion in 2010 global profits. Let's teach 'em both a lesson and confiscate it for the public good. This will get us through...

9:52 AM January 4
Okay, maybe I underestimated our take. But we shouldn't let Exxon and Walmart distract us from all those other corporate profiteers out there worth shaking down. In fact, why don't we grab every cent of 2010 profit made by the other 498 members of the Fortune 500? That will net us another, let's see, $357 billion! Enough to get us to...

2:00 AM February 9
So we're running out of corporate cash, but look - it's Super Bowl time! As we all know, the game has become a crass disgusting festival of commercialism. So let's take all the TV ad money spent on stupid Super Bowl ads, and apply that to government needs. That would be $250 million, enough to fund us for, let's see... 36 minutes. The half time show, at least. But why stop there? Let's take every cent of ad money spent on all 45 Super Bowls, a cool $5 billion, which would cover us until...

2:00 PM February 9
Speaking of sports, why should the players be immune to our pressing public needs? Lord knows professional athletes make obscene salaries for playing a dumb game. So let's take the combined salaries of all players in the NFL, Major League Baseball, the NBA, and the NHL. Hey, they've got endorsement deals, they'll hardly miss it. Throw in the total winnings of everybody on the PGA tour and NASCAR, and we get $9.4 billion, enough to get us through until...

1:00 PM February 10
Okay, it's time to stop messing around. Athletes aren't the only ones greedily raking it in. What about America's rich - those fancy pants fat cats living the high life in the above-$250,000 income bracket? According to IRS statistics, these 1.93% of US households are hogging 25% of US income. And why do they need it? For crying out loud, they probably stole it anyway. I say let's take 100% of every penny they make above $250,000. They can use the rest to pay their state and local taxes. Now we're talking big bucks, brother. How much? Let's see...



A: Number of US households: 116,000,000
B: Average US household income: $68,000 (median = $52,000)
C: Total US household income (A * B): $7.89 trillion
D: Percent of households above $250k income: 1.93%
E: Number of households above $250k income (A*D): 2,238,800
F: Percent of national income earned by households making $250k or more = 25%
G: Total income of households making $250k or more (C*F): $1.97 trillion
H: Total income of households in excess of $250k (G - E*$250,000) = $1.412 trillion



Alright! Take that, fat cats! Our $1.412 trillion windfall has us covered for the next 141 days, or until...

6:00 PM July 2
Well, I guess maybe there are a few items we can cut from the budget. Those quagmires in Iraq and Afghanistan, for example. Why don't we end all funding for those wars, and bring our troops home to march in the Fourth of July parade? That would save us $105 billion Afghanistan and $159 billion in Iraq, a total of $264 billion - enough savings to cover us until...

4:00 AM July 29
Summer blockbuster season! And of course the biggest blockbuster of all time was Star Wars. To punish George Lucas for those stupid sequels, let's confiscate every penny of revenue generated by the Star Wars franchise since 1977 - movies, TV rights, books, toys, action figures, everything - which nets us $25 billion. Enough to keep the lights on until...

4:00 PM August 1
Well, there's plenty more money in Hollywood to go after. So, for the national good, let's evict everyone in Beverly Hills and sell their homes at current market value. 15,000 homes at $2 million per gets us another $30 billion, paying the bills through...

4:00 PM August 4
The kids will be going back to school soon, so we're gonna have to bring out the big guns and really go after those moneybag plutocrats like Warren Buffett and Bill Gates. Between 'em, those two bastards have amassed a combined fortune of $100 billion. What kind of jerk needs that kind of money? The worst thing is they're shielding it from the public treasury using the oldest trick in the billionaire playbook - by continuing to live. Once they kick the bucket, and after we close the estate tax loopholes, the American public will get the 50% of their ill-gotten loot we so richly deserve. So let's say we arrange a couple of unfortunate "accidents" for Mssrs. Gates and Buffett. Now we've got another $50 billion for the US coffers, enough to get us to...

4:00 PM August 9
Aw, screw it. There are plenty more American billionaires to go after - 398 more to be precise, according to the latest Forbes 400, with a combined total net worth of $1.29 trillion. 398 more "accidents," 398 more estates taxed at 50%, and we've got another $650 billion to tide us through...

4:00 PM October 13
Crap. Okay, let's just kill all the billionaires and take all their money. Add in another 100 or so of the almost-billionaires, and that buys us an additional 73 days until...

4:00 PM December 25
Merry Christmas! Just one more week to go. In the spirit of the season, let's give the surviving conservative wingnuts a few of the budget cuts they've been bitching for, like getting rid of foreign aid. This saves $50 billion - getting us to...

4:00 PM December 30
Only 32 hours to go! To cover the remaining $12.5 billion vital federal program tab, let's pass the cash bucket and demand every surviving American man, woman and child to kick in another another $40 bucks. I'm pretty sure they will, after all those previous "accidents."

12:00 AM January 1
Happy New Year!

See? Easy peasy lemon squeezy. Time to do it all again, except this time we'll need to come up with $11 billion per day. I'm sure we'll figure it out somehow.

Do you know where we can get some more plutocrats?

Just for fun.

[pbjosh]

The original mags had a spring, and then a spacer kit also to tune powertube o-ring compression.

[PBSteve]

i believe it was the tolerance on the orings themselves, not the glands that is the problem. much easier to control the dimension of a metal spacer, than a rubber oring.

i believe the level 10, and then ULT were the first two things that took mags from bullet proof, to finicky. although the AO apologists hate me when i say that.

Yeah. Just interesting to use axial squeeze to gain radial compression. Sounds like he shrunk the bolt pin to reduce the forward bias, then used the oring shims to adjust friction.

So he never shimmed out the bolt spring, huh. Seems like an easy handle for tuning.

I did have a mag (briefly), just wasn't a fan. I don't think it had a lvl 10 iirc.

[Lurker27]

I'm fine with the concept of investing some of SST in higher performing securities, as long as it remains guaranteed to the principal (i.e. investment not at risk).

Even a reasonable "auto-invest target date" 401k historically under performs market return (perhaps 6% compounded rather than 8-10%, with significantly less risk.) I believe this was a major GWB point during the 2000 election - allow citizens to invest a portion of their SS, at risk.

This is another way to potentially address the solvency issue.

[ironyusa]

There are a ton of resources out there that point to passively managed index funds with low management fees. They mirror the market. There are some passive index funds that can perform above their respective index by being value weighted, particularly in the small cap arena. However, the idea behind index funds is they perform at market. I am also a fan of REIT funds and some global index funds as well. Easy to diversify by selecting minimally correlated indeces.

[Lurker27]

My point is that there's a risk associated with every return.

Beating the market almost always requires the assumption of risk greater than associated with the market index.

In fact, the draw of passive funds is that their low fees, compounded over time, dwarf the prospective benefits of higher performing funds - there is a 100% chance you're paying management fees on active funds, and both tend towards (efficient) market returns.

In fact, there is a lot of good science in terms of portfolio development, much of it based on Shannon information theory:

https://www.ece.uic.edu/~devroye/cou...e_Vercimak.pdf

The point is that a government backed safety net program should be among the most risk averse portfolios. Americans have access to some of the best private retirement options in the world - our 401ks are incredibly liquid, as are Roth IRAs.

It's nearly always good advice to contribute the maximum (18k/year) to your 401k as the base of your investing strategy.

[cockerpunk]

Not really - you would have to increase payouts for high income earners. Same problem.

actually no, the math has been done.

if you lift the cap on SS, it is solvent forever.

[Nobody]

i believe it was the tolerance on the orings themselves, not the glands that is the problem. much easier to control the dimension of a metal spacer, than a rubber oring.

i believe the level 10, and then ULT were the first two things that took mags from bullet proof, to finicky. although the AO apologists hate me when i say that.

Lol, fix apparent problems (the chopping of paint) and then it makes it worse? you are never happy are you? The ULT i will give, but since i never owned or used one, i can not comment. My L10 in my classic (bought 97), had the L10 kit installed when they came out (2001-ish) and i have maybe changed the power tube oring in 20 years. Oh yeah, not reliable in the least. And i am sure I'm not the only one with that.