Wednesday - March 02, 2005

Social Security

omehow this beast keeps rearing its ugly head with rhetoric flying on both sides. 

In the interests of trying to present both sides of the issue I have some stuff for you to look at.

First off, we start with Vox Day’s piece on WND. Having read it I come away shaking my head wondering at his agenda with his view.  He spends a lot of time going into the machinations of balancing the different averages but I saw little that would lend it self to the argument that a person should not invest in the stock market (yet somehow I feel that’s the point he is trying to make.)

Could be I read too much into it since Vox is WAY more intelligent than I am so maybe I missed it?

I do know he posted to his blog about market re-balancings and the advantages (albeit yet proven) of investing in the stocks kicked out of the major averages (DOW, S&P, NASDAQ, etc.) Yet this seems like a tie in to that which really has no bearing on the SS argument.

Ahhhhh, maybe he’s advocating a “stock only” portfolio for SS rather than an index portfolio.

Someone more well versed than me will have to break the code on this one.

Not to be left out is a new contest sponsored by MoveOn.Org

What’s it about?  They are:

joining forces with actor John Cusack, cartoonist Aaron McGruder, and liberal activists Al Franken and Arianna Huffington to promote the contest, called “Bush in 30 Years: A Flash Contest to Stop the Republican Social Security Scam.”

Damn!  Even Pat Boone is chining in on this except now he’s channeling Will Rogers.

For a humorous approach to the SS mess, read Pat’s article.

OK, maybe this one does not advocate one position or the other but it is an excellent example of the media hypocrisy evident in this debate.  Particularly startling is how the NY Times takes issue with the USA Next group tenuously tied to the Republican party on this debate but absolutely disregards those leftist groups are tightly tied to the Democratic party.

In addition you have Air America going after them, too.  Yet they conveniently forget a few things which Michael Tremoglie writes about in this article.

Stuff like:

Democracy for America was founded by current DNC Chairman Howard Dean.

Whereas Dean is no longer there, his brother Jim, is.  (No relation to Jimmy Dean, I am sure!!)

Funny how Air America does not seem to think there might be collusion going on here, eh?

Democracy for America actively opposes Social Security reform. Democracy for America’s lists a “Blog for America.”

or

Democracy for America received $250,000 from George Soros

or

Democracy for America received $100,000 from the leftist Service Employees International Union (SEIU)

or

that Air America was financed by Democratic National Committee advisor Mark Walsh.

Ooops, missed all those one, too, eh, AA?

But tenous at best ties by USA Next top the Republican party is the RAGE, the NEWS!! the SCANDAL!!!!

Then again, if we look at the federal government’s Thrift Savings Plan we’d see that it beats the pants off Social Security.  And it is simple because it offers five investment portfolios:

G Fund: This is, in effect, an intermediate-term government bond fund. It invests in specially issued Treasury securities. “The G Fund rate formula is the same as that used to calculate the interest rate for investments of the Social Security Trust Fund,” notes Tom Trabucco, the thrift plan’s spokesman. The fund is managed by the plan itself.

F Fund: This is an intermediate-term high-quality bond fund that tracks the Lehman Aggregate Bond Index. Like all of the portfolios except G Fund, it is an index fund that is managed by Barclays Global Investors, the world’s largest indexing firm.

C Fund: This fund is indexed to the Standard & Poor’s 500-stock index ($INX) of large-capitalization stocks.

S Fund: This portfolio is indexed to the Wilshire 4500 Index of small and mid-cap companies.

I Fund: This fund is indexed to Morgan Stanley’s Europe, Australasia, Far East, or EAFE, Index of large-company foreign stocks.

Sounds amazingly like what I’ve been advocating, right?  Plus it has extraordinarily low overhead by employing less than 100 people.

For numbers, etc.  go here.

Lastly, I got this from Allan a few days ago adn even went to the site mentioned.  It is an effort by Democraps to PROVE how bad privatization would be.  Yet they give no assumptions, premises, or amounts used (total privatization?; 4 percentage points? individual half of contribution?)

The info comes from The Political Junkie Handbook

Pundits have written much about President Bush’s Social Security Privatization Proposal.  The Democrats’ social security calculator gives the user a general idea of how they would fare under Bush’s plan.  Unfortunately, there is little information about the calculator.  What factors did they consider?  Benefits under the Bush plan are a function of time, return on investment and age of retirement.  None of their assumptions are listed.  I believe that they chose a very low ROI, probably around 2%, to arrive at their conclusion that retirees will find that their benefits will be cut under privatization.

I tested two rates of return on investment: 4.23% (average annual return over last 10 yrs. in an international stock index fund) and 6.95% ( average annual return over last 10 yrs in money market index funds) .  I compared returns from the perspective of current age (50, 40, 30 and 20 years of
age) and income ( $30,000, $60,000 and $90,000).

The results indicated that some people gain and others lose at a 4.23% return and everyone enjoys substantial gains with a 6.95% return.  I estimated that everyone will break even or enjoy small and moderate gains from the existing Social Security benefits schedule with approximately a 5% return.  This should not be too difficult to achieve since the S&P 500 annually returned over 10% in each decade during the last 70 years.

Naturally not every group experienced the same returns.  Generally, the young and affluent experienced comparatively greater returns.

(Here) is a chart summarizing my findings.

Cordially,

Michael Crane

Flail away, folks!  Let’s hear it!

Posted by Ranting Right Wing Howler     on 03/02/2005 at 06:49 AM   
Filed Under: • Social-Security •  
• Comments (7) • Trackbacks(1)  Permalink •  

DISCLAIMER

THE SERVICES AND MATERIALS ON THIS WEBSITE ARE PROVIDED "AS IS" AND THE HOSTS OF THIS SITE EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES, EXPRESS OR IMPLIED, TO THE EXTENT PERMITTED BY LAW INCLUDING BUT NOT LIMITED TO WARRANTIES OF SATISFACTORY QUALITY, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, WITH RESPECT TO THE SERVICE OR ANY MATERIALS.

Not that very many people ever read this far down, but this blog was the creation of Allan Kelly and his friend Vilmar. Vilmar moved on to his own blog some time ago, and Allan ran this place alone until his sudden and unexpected death partway through 2006. We all miss him. A lot. Even though he is gone this site will always still be more than a little bit his. We who are left to carry on the BMEWS tradition owe him a great debt of gratitude, and we hope to be able to pay that back by following his last advice to us all:

1. Keep a firm grasp of Right and Wrong
2. Stay involved with government on every level and don't let those bastards get away with a thing
3. Use every legal means to defend yourself in the event of real internal trouble, and, most importantly:
4. Keep talking to each other, whether here or elsewhere

It's been a long strange trip without you Skipper, but thanks for pointing us in the right direction and giving us a swift kick in the behind to get us going. Keep lookin' down on us, will ya? Thanks.

THE INFORMATION AND OTHER CONTENTS OF THIS WEBSITE ARE DESIGNED TO COMPLY WITH THE LAWS OF THE UNITED STATES OF AMERICA. THIS WEBSITE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE UNITED STATES OF AMERICA AND ALL PARTIES IRREVOCABLY SUBMIT TO THE JURISDICTION OF THE AMERICAN COURTS. IF ANYTHING ON THIS WEBSITE IS CONSTRUED AS BEING CONTRARY TO THE LAWS APPLICABLE IN ANY OTHER COUNTRY, THEN THIS WEBSITE IS NOT INTENDED TO BE ACCESSED BY PERSONS FROM THAT COUNTRY AND ANY PERSONS WHO ARE SUBJECT TO SUCH LAWS SHALL NOT BE ENTITLED TO USE OUR SERVICES UNLESS THEY CAN SATISFY US THAT SUCH USE WOULD BE LAWFUL.

Copyright © 2004-2015 Domain Owner