Well done I hope, but this is not about you. It's about a sizeable portion of the population that has not been as fortunate.
Economics
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kennyp2339
Minister of Fire
We can argue all day long about SS and 401k's both in my opinion were invented as supplemental for an older person.
The big elephant in the room, one of which burns me up to no end is the drift away from true pensions from large corporations, states, counties, and public service employers.
For the large corporations, they have successfully lobbied, and changed the common workers culture to accepted long hours, mediocre benefits and smaller workforces; they offer a 401k plan as the only planning substance which burns me up to no end, the fact that someone is hired to a company and offered a 401k as the only retirement benefit with a 1:1 match capped normally at the first 6% is absolute bull crap imo.
Essentially these large corporations that would normally offer a traditional pension system (not enough to live off by itself, but when combined with SS, a persons life savings, and possibly a persons 401k that person and there next of kin could live a wonderful golden years life)
Instead these large corporations have taken a savings plan that was designed as supplemental (401k) and some how fenagled it to make it seem like this is a persons only retirement solution, basically they sent a person that has skill set to make there company profitable and also turned a blind eye and just hope that same person has finical training to manage there own affairs.
3 months ago I had this argument with my boss, my boss's stance was that he's good to go and many workers want to have control over there retirement planning / money, that big corporations have lifted the net to allow there workforce expand outward and away from a lower paying traditional pension plans.
Well rather then have a hypothetical argument, (I like using real examples) for the second time in my career, I am witnessing people that saved money through a 401k, have there rug ripped out from beneath them, men and women that had plans to retire in the next 2 years, are now saddled with stretching there careers an additional 2 years to recover the losses of 2 months. How is this right?
What this does is clog the pipeline of workers and causes stagnation in jobs, how can a company reasonably let a guy that works on power lines, that has so many other things going on through there heads like safety, fatigue and little family life expect them to make finically sound moves within the stock market which ultimately impacts there long term lives?
The fix here is to bring back pension benefits, let the company pay for 1 fund, have them invest into that fund and manage it, offer the finical stability to the worker, this will attract good workers and retain them, offer a 401k as supplemental, this allows the common person to have a nest egg to enhance there retirement, not be dependent on it for there retirement. BTW the same boss that was "good to go" is now one of the people that is looking to extend there career another 4 years.
The big elephant in the room, one of which burns me up to no end is the drift away from true pensions from large corporations, states, counties, and public service employers.
For the large corporations, they have successfully lobbied, and changed the common workers culture to accepted long hours, mediocre benefits and smaller workforces; they offer a 401k plan as the only planning substance which burns me up to no end, the fact that someone is hired to a company and offered a 401k as the only retirement benefit with a 1:1 match capped normally at the first 6% is absolute bull crap imo.
Essentially these large corporations that would normally offer a traditional pension system (not enough to live off by itself, but when combined with SS, a persons life savings, and possibly a persons 401k that person and there next of kin could live a wonderful golden years life)
Instead these large corporations have taken a savings plan that was designed as supplemental (401k) and some how fenagled it to make it seem like this is a persons only retirement solution, basically they sent a person that has skill set to make there company profitable and also turned a blind eye and just hope that same person has finical training to manage there own affairs.
3 months ago I had this argument with my boss, my boss's stance was that he's good to go and many workers want to have control over there retirement planning / money, that big corporations have lifted the net to allow there workforce expand outward and away from a lower paying traditional pension plans.
Well rather then have a hypothetical argument, (I like using real examples) for the second time in my career, I am witnessing people that saved money through a 401k, have there rug ripped out from beneath them, men and women that had plans to retire in the next 2 years, are now saddled with stretching there careers an additional 2 years to recover the losses of 2 months. How is this right?
What this does is clog the pipeline of workers and causes stagnation in jobs, how can a company reasonably let a guy that works on power lines, that has so many other things going on through there heads like safety, fatigue and little family life expect them to make finically sound moves within the stock market which ultimately impacts there long term lives?
The fix here is to bring back pension benefits, let the company pay for 1 fund, have them invest into that fund and manage it, offer the finical stability to the worker, this will attract good workers and retain them, offer a 401k as supplemental, this allows the common person to have a nest egg to enhance there retirement, not be dependent on it for there retirement. BTW the same boss that was "good to go" is now one of the people that is looking to extend there career another 4 years.
SpaceBus
Minister of Fire
The power vacuum was already created when our military stepped in. There are loads and loads of "fat" that can be trimmed from the military budget without reducing readiness. Getting the military industrial complex out of the government pockets is a good first step.
IMHO I disagree with you on pensions. Its easy to blame the demise of pensions on evil corporations and governments but the prior system was unsustainable. Up until 1974 when ERISA was passed there was very little legal protection for pensions. Companies did not have to prefund the plans, they paid the annual benefits from profits. Companies were in the post WW2 boom and there was minimal major foreign competition. Large companies were growing and their workforces were young so the ratio of retirees to workers was low. The large companies wanted to encourage loyalty so they took care of retirees and maybe even threw the retirees a cost of living allowance on occasion. Unionized companies handed the checks to the unions to administer their own plans.
Folks didn’t live s long back then. I am 60 the youngest son of an older father who was the youngest in his family so most of my uncles and aunts were older working folks. Many smoked, with unhealthy diets and were blue collar so they didn’t exercise and the links between smoking and eating wrong didn’t come into acceptance well until the mid seventies. That meant that most of the aunts and uncles and my parents contemporaries would retire at 62 or on occasion 65 and rarely did they make it to seventy healthy either being in the ground or in some sort of long term care. Usually they had a couple of good years and then health issues waylaid them. Therefore they might work for the same company for 40 years contributing to profits and then the company had to pay out for less than five years.
My mother was somewhat ahead of the curve on health and my dad’s doctor got on his case about getting healthy in his mid 50s, my mom made sure he listened and he went from being sedentary bookkeeper to walking to and back from work 2 miles each way as long as it was over 40 degrees out and the sidewalks were clear. He also quit smoking the cigars he did on occasion. He had a mild heart attack in his 60s and a bypass in his eighties and passed at 97 running out of steam but still pretty active. Therefore his final company he worked for and the federal government had to pay for 30 plus years of retirement for 20 years of working. He was 20 year air force reservist and as he said many a time, best part time job he ever had. Many folks these days are routinely making it to their mid eighties and even my financial planning is based on 100.
In the late seventies and mid eighties came the growth of foreign competition. Automotive, steel and paper companies from the 3rd world countries had young healthy workers that they could replace at any time and there was no such thing as pensions. If the parents made it to the point they could not work, the family was expected to take care of them until they died. This by the way was the system in the US prior to Roosevelt’s New Deal when social security was put in place to get older worker out of the working population. The result of this major foreign competition is the big companies started to shrink while their pension costs increased. Since they were financing payments off of cash flow it started to impact the bottom line. ERISA was not passed out of nothing, it passed because big pension plans were starting to go bust. Up until ERISA unless someone was working for a unionized company the pension agreement was between the company and the employee If the company was having a tough time they could unilaterally change the plan. Even after ERISA was passed, the companies were given many years to build up actual reserves to cover pensions and in many cases they filled with company stock. If the company went bust the people on pension were not at the top of the line. Canada had this system until recently. One of my employers had operations in the US and Canada, the company went bankrupt. The US workers had their 401k contributions plus vested company match while the Canadians got pennies on a dollar when their corporate parent got paid their senior debt notes as they had priority.
The US unionized plans did not work out so well as many of the union pension plans were under the control of elected officers that didn’t have a lot of oversight, some traded their members future for short term gains in their pockets by hooking up with organized crime to pillage the plans. Across the board, these union plan are suffering from more workers taking out then putting in and inadequate reserves to cover them. They are begging for government help and making benefit cuts. Realistically the only real pensions left tend to be defense companies that can charge pension cost to the government and government entities who also ultimately have access to tax dollars, most corporations firms have frozen their plans.
On top of that ,only folks who worked for big businesses or government got pensions, most employees of small firms did not get them. They worked their entire career until they could not work any longer and lived off SS. Another big failing with pensions is they were not portable. Most plans were back loaded so the most benefits were obtained in the last few years of working. If a person was laid off or discharged in their later years they missed out on a lot, in many cases they did not get anything as they didn’t meet vesting. The whole deck was stacked to force loyalty to the company as long as they needed someone. I know my dad was threatened that way by mid level managers at one point and knew many other who were also. That was a standard fear of anyone working for company with a pension plan, that they would get fired or laid off before they had a good enough pension plan to retire and had no way to making it up. Governments generally could not pay private wages so the way of hiring and keeping workers was to give them short retirement (frequently 20 years of service) and generous pension benefits that would not have to be paid until long until the future. Those public plans are now coming to roost and most states and the fed are woefully underfunded, as bad or worse than SS. No matter what the plan, it comes down to demographics, fewer people paying into the system and more taking out of it based on unsustainable promises made years ago by people who knew it but figured they would be long gone before the promises came due.
After the impact to the big companies from foreign competition when they started shrinking, the next part of US growth was the high tech and services industry and most high tech folks were young and highly mobile. I know many tech folks who routinely switched jobs every 2 or 2 years for 20 or 30 years. Far more than half of the companies only lasted over 5 years. They were well paid but a pension did not make sense so 401s were developed as means of giving them control of a portable pension plan that they controlled. Some controlled them well and some used them as a private piggybank to fund a lifestyle they could not afford.
My first real job with a big company had a frozen pension plan so I only could put money in 401k plan and they did a match. I was there for about a year and when I left my 401 transferred to an IRA. I put it in a very conservative mixed mutual fund and left it ever since. That 1 year of contributions is worth $560 a month until I pass at my full retirement age based on buying a deferred annuity today. I then worked for a big company that had a “good” pension plan. Both they and I paid into the plan once I vested for 2 years. The big company got in financial trouble as they were a growth company that stopped growing due to foreign competition. Our division was sold off and the company who bought it didn’t have a pension plan so they dumped the underfunded plan on the PBGC. I had about 5 years in that plan. I got a check for my contributions which I invested while the company share for 5 years means I get $300 a month for the rest of my life at full retirement age. I have subsequently worked for three companies with 401K plans and could be retired now as I converted them to IRAs and kept them invested. Of course my lifestyle is intentionally below what I earn, I am a long term conservative investor and as I have gotten older I have gotten more conservative. I keep a reserve fund and ultraconservative funds to cover my living expenses for the duration of a cyclical market so I don’t need to raid the investments. Folks do not seem to understand that they only lose money when they have to sell, otherwise it is better to buy low and sell high then the reverse.
So from my point of view pensions were doomed and 401ks were a sustainable change for world that is changing, not perfect but better than the alternative. In my circle of friends I know very few folks (one worked for a defense contractor) who would have made out any better with pensions, most would not have qualified for them as they didn’t have a choice to move around as the companies they worked for failed. They most likely would be worse off Folks used to talk about the gold watch given on retirement but very few folks I run into would ever have qualified for one based on longevity with the same company. My dad had a college paper he wrote on the unsustainability of SS back in the 1950s and his advice to me when I went to work was plan as though it is not there when I retire and be happy if it of some semblance of it is. The only way out of this is to change the demographics, if you listen to Bill O’Reilly and other conservative commentators we should contaminate blankets with CV-19 and give it to the old folks to get the sick folks out of the nursing homes like the hyped smallpox in blankets to the Indians. Unfortunately we would need to get to the definition of Decimate (1 in 10 killed) to even make a dent in the demographics. I am already penalized for demographics, my full retirement age is 67 and 10 months. Unfortunately when the change was made they capped it at 1960, had they kept it going it would have taken some pressure off of SS and add in substantially raising the contribution cap will make it sustainable for many more years. SS was never supposed to be comfortable retirement if was the equivalent of welfare with the family and savings kicking in.
vinny11950
Minister of Fire
These are the rules of the game. Capitalism has winners and losers. Over time it evens out. Except when the investors are bailed out by the government. Privatize the profits, socialize the losses. If you are of the mind to avoid the upheaval of the market, and you want the government to normalize business so the economy doesn't go to hell, then hand out money but get equity or collateral from the businesses that are being bailed out. Then put that equity in a national fund that pays out that equity, over time, to the public. This $500 BN slush fund for the treasury has very few rules and oversight. It is hard to believe this will not go to politically connected people with influence.
This also inflates prices on assets like housing and stocks, making them more unaffordable to the low and middle classes.
It is going to be obscene to have an unemployment rate of 15%-25% and have the stock markets soaring to all time highs courtesy of the Federal Reserve pumping trillions into the banks, backstopping all the risks from them.
kennyp2339
Minister of Fire
Take a hard look at the death of the pension, and the beginning of the 401K, and the explosion of people living off credit to keep up with the Jones; doesn't matter what the cost is, what's my monthly payment. Live within your means, and that may mean well below your neighbors. Pensions have run their course and are dead or underfunded, deal with it Kenny.
If anyone has not heard of the book "The Millionaire Next Door" I can highly recommend it. It really reinforces how some people get in trouble keeping up appearances or being sold a lifestyle while the guy a few blocks over driving a used car in a modest house may have far more assets. Its a bit dated but the stories and principles are still right on.
SpaceBus
Minister of Fire
With all of this taxpayer money bailing out these industries you would think our tax refund would include some of these profits. I have no issue with socialized business if the taxpayers are seeing the benefits. Unfortunately Vinny is right and we won't ever see any benit ourselves for bailing these jerks out without our permission.
kennyp2339
Minister of Fire
There are benifits for many of us. But if they continue to be able to operate with little to no risk it will lead to more and more risk taking. And more bailouts.
SpaceBus
Minister of Fire
There are some benefits in the way of jobs and consumer goods, but is that really a benefit?
If you are unemployed you MIGHT see the availability of a job as a benefit... 
If you are employed you will probably just complain about it. It's the American way
, as is the expectation of a vast array of consumer goods...
We all have the right to complain, and most of us take full advantage of it - including me.
Happy Easter!
If you are employed you will probably just complain about it. It's the American way, as is the expectation of a vast array of consumer goods...We all have the right to complain, and most of us take full advantage of it - including me.
Happy Easter!
Is anyone posting here a bonified economist? I would like a truthful, educated explanation of where the trillions being showered of Wall Street and industry are coming from. 3 months ago it was all about cuts and not enough money for the budget. Now it's like Uncle Sugar at Christmastime.
This is the best article I have been able to find and it is not comforting. If this is true it looks like if the coronavirus doesn't wipe out seniors, the govt. will.
www.thebalance.com
This is the best article I have been able to find and it is not comforting. If this is true it looks like if the coronavirus doesn't wipe out seniors, the govt. will.
Who Owns the US National Debt?
The majority of the U.S. national debt is owned by Social Security, the Federal Reserve, and foreign investors. Learn how that impacts the economy and you.
Seasoned Oak
Minister of Fire
Its a wonder anyone is still buying this debt. Spending money we dont have is one area that is truly bi- partisan. Both parties seem to be in a competition of who can spend the most as each administration seems to outdo the one before it. Only way out of this is to inflate their way out which seems to be the long term plan. IMO. More than wiping out seniors we could be wiping out our grandchildrens future or at least making it very hard for them to succeed.
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Begreen, I am not an economist, but I can tell you where the trillions come from. My wife and I were watching 60 minutes the other night, and they interviewed one of the members of the Federal Reserve Board. He said that they were given the authority to print as much money as was needed to make it through this crisis. This is called Fiat money, and it's only worth is that the United States says it is worth that much, and the world uses the US dollar as a standard of which to base other currencies on. Almost all other currencies are also Fiat currencies such as the Euro; the US went off the gold standard, I believe in the 30's. At some point this house of cards will come crashing down, and I hope that it is not in my or yours lifetime, because it won't be pretty. Then there is the subject of derivatives which goes way over my head, but the value of the derivatives is over 100 Trillion dollars.
Highbeam
Minister of Fire
Inflate the debt away. If inflation lowers the value of money just right then the debt will be reduced while everything else goes up. Incomes, gdp, real estate prices, etc.
Obviously not an economist but I know what my father paid for his house 45 years ago and what his income was. His 1100$ mustang note would be pretty easy to pay off today.
Sorry for rambling. I have no idea if this debt will ever be a problem.
Obviously not an economist but I know what my father paid for his house 45 years ago and what his income was. His 1100$ mustang note would be pretty easy to pay off today.
Sorry for rambling. I have no idea if this debt will ever be a problem.
vinny11950
Minister of Fire
It's mostly digital money. It is hard to believe, but it is digital numbers on a ledger. Basically, the financial institutions come to the Fed for money. They give the Fed their stressed Loans/Debt, and the Fed transfers the amount to their accounts. A digital number.
vinny11950
Minister of Fire
Below is a good article on it. I should also add that last week the Fed also announced a program of about $2 trillion for local governments to tap into these digital Fed funds. By doing this the Fed is keeping interest rates down. If financial institutions, companies, and now municipalities had to go on the open market to issue debt, they would all be paying higher interest rates because the risk of not getting paid right now is very high. But eventually the Fed should just work its way down to households and start sending out checks 
Of course this all leads to Modern Monetary Theory (MMT) - basically it says that countries with their own currencies just print money. The Fed does not endorse it, but everything they have done in the last few weeks is validate the position of people arguing for MMT.
www.investopedia.com
Of course this all leads to Modern Monetary Theory (MMT) - basically it says that countries with their own currencies just print money. The Fed does not endorse it, but everything they have done in the last few weeks is validate the position of people arguing for MMT.
Understanding the Federal Reserve Balance Sheet
The essence of the Fed's balance sheet is quite simple: Anything for which the Fed must pay money becomes the Fed's asset.
Highbeam
Minister of Fire
I just imagine a big printing machine in the White House basement. Here’s a pallet of cash for you Boeing. How is anybody going to know, much less expect to be paid back? If everybody got a pallet of cash, there would be inflation.
Seems the magic is not printing out too many pallets of cash.
Is there really any such thing as national debt? Why borrow money when you just print it?
Seems the magic is not printing out too many pallets of cash.
Is there really any such thing as national debt? Why borrow money when you just print it?
Seasoned Oak
Minister of Fire
SpaceBus
Minister of Fire
Bitcoin is simply compensation for use of a secure server. It makes more sense than the US dollar at this point.
A question to ponder. The past few decades have been building up corporate shareholder value and with it, the coupled huge executive bonuses. Decades of maximizing shareholder value instead of building resilience have made them quite fragile. When the economy collapses they are the first in line for taxpayer bailouts. Do we want this to continue? It wasn't always this way. Socializing their debt does not sit right with many, myself included.
Local example: Boeing, with its 737 Max grounded over the past year, was borrowing cheap money to buy back stock and now it's getting a $17 billion bailout from taxpayers. How is that right without some major executive penalties and laws changed to break this cycle? It's not the virus that is bringing down these companies, it's almost 40 yrs. of greed.
Local example: Boeing, with its 737 Max grounded over the past year, was borrowing cheap money to buy back stock and now it's getting a $17 billion bailout from taxpayers. How is that right without some major executive penalties and laws changed to break this cycle? It's not the virus that is bringing down these companies, it's almost 40 yrs. of greed.
Again I will point out that they are theoretically loans...
Begreen and the other liberal minded here are correct in saying that the system is rigged to benefit the wealthy, but the liberal agenda always seems to want to punish success resulting in shipping more jobs outside of our borders. Alternately, the conservative agenda is to continue to rig the system more.
Unfortunately I doubt we will ever see a truly fair system. Both sides go too far one way or the other. Moderates are shunned by both sides. Add into the complexity of our own nations economy and social state the complexities of the new world economy and there is no easy or simple answer.
Before this country was established, the European feudal system gave NO opportunity for the lower class to better themselves. Here and now that opportunity IS there. Unfortunately the idea is also there that a better life should be given, not earned. The opportunities available here now are better than they were 50 years ago, which were better than 100 or 150 years ago. Before that putting an outfit together, having a pair, and a bunch of luck in not losing your hair opened the West.
There will always be a division. It is inevitable. Political system does not matter. What matters is opportunity, which we all have. Nobody is at fault if people don't recognize or make the most of their opportunities. It is more of a social mindset and poor personal choices than an economic statement.
The sad part is the perpetuation. How can the cycle be broken? How can the mindset be changed? How do we ever make the system fair AND keep the jobs within our borders? Will anybody be satisfied with a fair system? Those on top will think it goes too far, those at the bottom will think it doesn't go far enough...
Begreen and the other liberal minded here are correct in saying that the system is rigged to benefit the wealthy, but the liberal agenda always seems to want to punish success resulting in shipping more jobs outside of our borders. Alternately, the conservative agenda is to continue to rig the system more.
Unfortunately I doubt we will ever see a truly fair system. Both sides go too far one way or the other. Moderates are shunned by both sides. Add into the complexity of our own nations economy and social state the complexities of the new world economy and there is no easy or simple answer.
Before this country was established, the European feudal system gave NO opportunity for the lower class to better themselves. Here and now that opportunity IS there. Unfortunately the idea is also there that a better life should be given, not earned. The opportunities available here now are better than they were 50 years ago, which were better than 100 or 150 years ago. Before that putting an outfit together, having a pair, and a bunch of luck in not losing your hair opened the West.
There will always be a division. It is inevitable. Political system does not matter. What matters is opportunity, which we all have. Nobody is at fault if people don't recognize or make the most of their opportunities. It is more of a social mindset and poor personal choices than an economic statement.
The sad part is the perpetuation. How can the cycle be broken? How can the mindset be changed? How do we ever make the system fair AND keep the jobs within our borders? Will anybody be satisfied with a fair system? Those on top will think it goes too far, those at the bottom will think it doesn't go far enough...
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