Detroit Defaults

[Peter1469]

Detroit won't pay $2.5B it owes (http://www.breitbart.com/system/wire/DA6TMNC00)


A team led by a state-appointed emergency manager said Friday that Detroit is defaulting on about $2.5 billion in unsecured debt and is asking creditors to take about 10 cents on the dollar of what the city owes them.

Kevyn Orr spent two hours with about 180 bond insurers, pension trustees, union representatives and other creditors in a move to avoid what bankruptcy experts have said would be the largest municipal bankruptcy in U.S. history.

Underfunded pension claims likely would get less than the 10 cents on the dollar.

This will likely become a trend as cities run out of money.

[Germanicus]

I hope not.

Europe is going to notice this at some stage.

The IMF will not allow them to default. America is being allowed to part default itself bit by bit.

America should be forced to take an IMF loans with stricy austerity enforced on the US Federal Government.

Thats not gonna happen though because USA=IMF.

[Germanicus]

http://thepoliticalforums.com/threads/13411-Reeducation-for-Alien-Nation-IMF

IMF=USA.

Soon you will hear calls from the global community for the fat and lazy Americans to live within their means. America will be sorry for the way they have treated the Greeks and pretty much all of Europe.

[zelmo1234]

I hope not.

Europe is going to notice this at some stage.

The IMF will not allow them to default. America is being allowed to part default itself bit by bit.

America should be forced to take an IMF loans with stricy austerity enforced on the US Federal Government.

Thats not gonna happen though because USA=IMF.

It is a city! Not a country, the IMF? would be if the USA defaults.

You would be happy to know that the policies that put Detroit in this position, are the same policies that you and other socialists have been advocating!

Unions, high wages, Great Social safty nets, and not requiring the people that work for the city to actually work or in some cases show up for work? have all Killed the American city that once helf the highest standard of living.

As the Unions drove jobs out of Detroit, the city itself, kept the same size workforce, so the size of the government that once took care of about 4 million people, remained the same, even though it is now a city of less than 1 million people


Socialism and Liberal policies are what killed Detroit!

[zelmo1234]

http://thepoliticalforums.com/threads/13411-Reeducation-for-Alien-Nation-IMF

IMF=USA.

Soon you will hear calls from the global community for the fat and lazy Americans to live within their means. America will be sorry for the way they have treated the Greeks and pretty much all of Europe.

Soon you will hear calls from the Global connunity for the USA to cial out another European Country! That is what you will hear.

You see The peoole of the USA are not even close to default, Even if the USA went to living within thier means and did not spend One deficite dollar, We have the money to pay the interest on the bonds. And that is something the wonderful greeks could not do, Spain is next!

Imagine what it would do to the countries of Europe if the actually had to invest in their own military! they rely on the USA for national security, They have ever since WWII.

You Really need to stop with the Chinese Propaganda. Your country is in the Honeymoom phase of it's relationship with China. And China has political unrest coming as it's people are starting to get a taste of freedom! Your countyu has high unemployment comeing as the people start to purchase more and more chinese imports.

but you will never see it coming because you have a mental block call socialism. The policy that has a 100% failure rate! and the only policy that you wuld advocate becasue you want someone to take from those that make money and give it to your sorry ass!

[jillian]

Detroit won't pay $2.5B it owes (http://www.breitbart.com/system/wire/DA6TMNC00)



This will likely become a trend as cities run out of money.

didn't detroit get it's voting rights abridged by the state putting in one of those 'managers'? throwing cities into default seems to be a pattern among those appointees.

and you can't keep cutting federal funding.

you cut federal funding, states have to cut funding.

and jobs

and then unemployment goes up.

and there are less taxes being paid.

and less money for the state to spend.

so the state cuts funding to municipalities

which cut jobs

and improvements

and less tax money is going into the system

and there is less money to spend.

THIS is austerity.

And that is why economies don't grow under austerity/austrian economics.

[zelmo1234]

didn't detroit get it's voting rights abridged by the state putting in one of those 'managers'? throwing cities into default seems to be a pattern among those appointees.

and you can't keep cutting federal funding.

you cut federal funding, states have to cut funding.

and jobs

and then unemployment goes up.

and there are less taxes being paid.

and less money for the state to spend.

so the state cuts funding to municipalities

which cut jobs

and improvements

and less tax money is going into the system

and there is less money to spend.

THIS is austerity.

And that is why economies don't grow under austerity/austrian economics.

Detroit was once the city in the USA with the highest standard of living!

If you want to see what killed Detroit? look no further than UNIONS!

The drove jobs from detroit and the city is in trouble becasue it tried to remain that same size even though it lost more than half of it's population!

[jillian]

Detroit was once the city in the USA with the highest standard of living!

If you want to see what killed Detroit? look no further than UNIONS!

The drove jobs from detroit and the city is in trouble becasue it tried to remain that same size even though it lost more than half of it's population!

i don't recall detroit ever having the highest standard of living in the country.

unions didn't kill jobs. i know that's your thing... that workers here should work for a substandard wage.

detroit went bad when american cars weren't as good as foreign cars.

car companies are doing well now BECAUSE WE BAILED THEM OUT.

they've now paid back the loans we gave them.

this one is directly at the feet of the rightwing governor and legislature of the state of michigan who are intentionally starving workers and business and government.

and you failed to address the intentional obstruction of voters in michigan by appointing "managers" over their local governments who then have a history of bankrupting their local governments. (the fact that most of the places being intentionally interfered with are black is a whole other issue).

thanks.

[Agravan]

@Zelmo, you will never get a liberal like jillian to ever admit that the dem policies are bad for the economy or the people. They will always point to the most obscure repub and place the blame squarely on him. Remember, it is never their fault. Greece was likely some conservative's fault, they'll tell you, just because they keep spending money they don't have it couldn't possibly be their fault.

[Chris]

didn't detroit get it's voting rights abridged by the state putting in one of those 'managers'? throwing cities into default seems to be a pattern among those appointees.

and you can't keep cutting federal funding.

you cut federal funding, states have to cut funding.

and jobs

and then unemployment goes up.

and there are less taxes being paid.

and less money for the state to spend.

so the state cuts funding to municipalities

which cut jobs

and improvements

and less tax money is going into the system

and there is less money to spend.

THIS is austerity.

And that is why economies don't grow under austerity/austrian economics.

Sorry, that is not austerity.

And that has absolutely nothing to do with "austerity/austrian economics" whatever the heck that even is.

Nice poem tho'.

[Dr. Who]

It is a city! Not a country, the IMF? would be if the USA defaults.

You would be happy to know that the policies that put Detroit in this position, are the same policies that you and other socialists have been advocating!

Unions, high wages, Great Social safty nets, and not requiring the people that work for the city to actually work or in some cases show up for work? have all Killed the American city that once helf the highest standard of living.

As the Unions drove jobs out of Detroit, the city itself, kept the same size workforce, so the size of the government that once took care of about 4 million people, remained the same, even though it is now a city of less than 1 million people


Socialism and Liberal policies are what killed Detroit!
A Stationary Economy, Not Liberal Politics, Is What Killed Detroit:

Indeed, San Francisco (http://en.wikipedia.org/wiki/San_Francisco) has similarly suffered decades of what conservatives would consider overbearing “liberal politics”, but it has ultimately thrived, and will presumably continue to attract many of the world’s best and brightest. If liberal-leaning San Francisco and neighboring Silicon Valley (http://en.wikipedia.org/wiki/Silicon_Valley) now represent the heart of economic innovation in the U.S., the question becomes why Detroit (arguably the Silicon Valley of the first half of the 20th century) surrendered its economic status. It seems the better, more compelling answer lies in the teachings of Adam Smith, along with poor dollar policy embraced by many conservatives in modern times.
Unions? No doubt their rise didn’t help, and as Smith observed, “if all persons in the same kind of work were to receive equal wages, there would be no emulation, and no room left for industry and ingenuity.” At the same time, it should be said that union demands were to some degree a symptom of the greater dollar problem; specifically the dollar’s decline after President Nixon (prodded by conservative heroes including Milton Friedman) severed its link to gold.
The debased dollar not only made large American cars unattractive for the spike in oil which occurred amid the greenback’s decline, but it also created a desire among autoworkers for higher wages in order to keep up with inflation authored by self-described conservatives. This is not meant to defend unions as much as it’s to say that absent Nixon’s horrific decision, union demands for the very wage increases that made the American manufacturing model even more unworkable would have been less urgent.
So while logic and historical evidence make plain that American-style liberalism wreaks enormous economic and personal hardship, for so many conservatives to reduce Detroit’s decline to a function of those failed policy ideas is a gross oversimplification of what actually occurred. And it ensures that little will be learned from Detroit’s collapse.
The sad truth in today’s world is that irrespective of political party affiliation, there’s a peculiar worship of manufacturing and the backbreaking jobs it allegedly creates. That worship has perpetuated a commercial concept that would have long ago disappeared whatever the quality of local governance. If so, as in if Detroit and Michigan had evolved with the economic times on the way to a reduced emphasis on the Big Three and the low-value, easily exportable jobs they create, the city and the state would likely be thriving today.
http://www.forbes.com/sites/johntamny/2011/04/02/a-stationary-economy-not-liberal-politics-is-what-killed-detroit/

[Chris]

The sad truth in today’s world is that irrespective of political party affiliation, there’s a peculiar worship of manufacturing and the backbreaking jobs it allegedly creates. That worship has perpetuated a commercial concept that would have long ago disappeared whatever the quality of local governance. If so, as in if Detroit and Michigan had evolved with the economic times on the way to a reduced emphasis on the Big Three and the low-value, easily exportable jobs they create, the city and the state would likely be thriving today.

Exactly! Manufacturing is down as a percentage of GDP worldwide and the service sector has been on the rise for decades. Move on.

[Polt]

car companies are doing well now BECAUSE WE BAILED THEM OUT.

they've now paid back the loans we gave them.


The loans to the car companies was just the tip of the iceberg of what the US government did for the car companies. GM was relieved of all their debts, including pension obligations. GM was able to make changes, such as reducing salaries and unneeded workers, which they couldn't do previously because of those damn unions. And, the American car companies still get protectionism from imports.

[Chris]

The loans to the car companies was just the tip of the iceberg of what the US government did for the car companies. GM was relieved of all their debts, including pension obligations. GM was able to make changes, such as reducing salaries and unneeded workers, which they couldn't do previously because of those damn unions. And, the American car companies still get protectionism from imports.

GM should have been told to declare bankruptcy.

Ford took no bail out.

[TheInternet]

A Stationary Economy, Not Liberal Politics, Is What Killed Detroit:
http://www.forbes.com/sites/johntamny/2011/04/02/a-stationary-economy-not-liberal-politics-is-what-killed-detroit/

I agree with most of what the articles you posted say. Worthy of note that while San Fran may be doing ok, the left wing state it sits in is not. Moving on, most of this article seems to be a case for returning to a gold standard, which, to my knowledge, only the Austrians argue for. So, do you agree with them that we should return to the gold standard?

[TheInternet]

The loans to the car companies was just the tip of the iceberg of what the US government did for the car companies. GM was relieved of all their debts, including pension obligations. GM was able to make changes, such as reducing salaries and unneeded workers, which they couldn't do previously because of those damn unions. And, the American car companies still get protectionism from imports.

And the Chrysler investors got screwed over hard and the union got a lot of benefits.

The UAW has hurt American manufacturing jobs more than any other organization I can think of.

[KC]

A Stationary Economy, Not Liberal Politics, Is What Killed Detroit:
http://www.forbes.com/sites/johntamny/2011/04/02/a-stationary-economy-not-liberal-politics-is-what-killed-detroit/

Detroit did other things that where wholly unnecessary as a matter of public policy. The city undertook a series of extremely ambitious infrastructure projects which looked cool but were not really al that useful to the city's economy, rather than spending money on the sort of things that Detroit really needs, like decent education.

[Chris]

Detroit did other things that where wholly unnecessary as a matter of public policy. The city undertook a series of extremely ambitious infrastructure projects which looked cool but were not really al that useful to the city's economy, rather than spending money on the sort of things that Detroit really needs, like decent education.

Yabbut that created stimulus and jobs and so much more! ;-)


http://i.snag.gy/8qaAR.jpg

[KC]

Yabbut that created stimulus and jobs and so much more! ;-)


http://i.snag.gy/8qaAR.jpg


:grin:

I'm skeptical about the multiplier too, but I still think infrastructure spending can be useful. Not so much because it creates work for people in hard times, but because a city with good infrastructure may be better suited for attracting different kinds of investment than one that is falling apart.

[Peter1469]

Infrastructure that is needed is smart spending.

[Chris]

Infrastructure that is needed is smart spending.

The problem comes in defining "needed". That's where crony capitalism sets in.

[KC]

The problem comes in defining "needed". That's where crony capitalism sets in.

Sometimes yes. Other times need is actually being earnestly addressed. I think it's the way the world has always been, with powerful members of a community holding disproportionate influence over public policy and using it to enhance their own personal ambitions. The world is never going to change.

[Peter1469]

The problem comes in defining "needed". That's where crony capitalism sets in.

Crony capitalism is certainly a problem. But there are still needed infrastructure projects.

For example a couple of weeks ago part of 14th Street, N.W. (near the White House) collapsed. Fixing is was a needed infrastructure project.

[Chris]

The world won't change because the need for justice is not first and foremost.

You mean the street/bridge/infrastructure built by government is failing?

[Polt]

And the Chrysler investors got screwed over hard and the union got a lot of benefits.

The UAW has hurt American manufacturing jobs more than any other organization I can think of.

All investors and stockholders in GM and Chrysler lost everything. The GM employees got bailed out 100%, including keeping all of their lavish retirement income, of which is now completely independent of GM.

[Peter1469]

The world won't change because the need for justice is not first and foremost.

You mean the street/bridge/infrastructure built by government is failing?

If infrastructure is not maintained it will eventually fail.

[zelmo1234]

i don't recall detroit ever having the highest standard of living in the country.

unions didn't kill jobs. i know that's your thing... that workers here should work for a substandard wage.

detroit went bad when american cars weren't as good as foreign cars.

car companies are doing well now BECAUSE WE BAILED THEM OUT.

they've now paid back the loans we gave them.

this one is directly at the feet of the rightwing governor and legislature of the state of michigan who are intentionally starving workers and business and government.

and you failed to address the intentional obstruction of voters in michigan by appointing "managers" over their local governments who then have a history of bankrupting their local governments. (the fact that most of the places being intentionally interfered with are black is a whole other issue).

thanks.

Interesting take! Totally false but interesting.

Here is a little article that will help you understand.

http://james-a-watkins.hubpages.com/hub/Detroit-Michigan

As for Unions and your auto workers?

http://answers.yahoo.com/question/index?qid=20070924073107AAuGk8O

With wages and benifits the cost of a UAW worker before the recent collapse was nearl 75 dollars an hour.

As for you comment on wages my employee's all make 50K plus with all management and sales staff in 6 figures.
But they are skilled workers? You can't pay someone 75 dollars and hour to put a screw in!

Now So the Car companies paid back there loans???????

http://freebeacon.com/gm-still-42b-in-the-hole/

So they still owe the government money and we are selling off stock at prices that make it likely that the people will loose tens of billing on the bailout of the UAW!

Gm also has billions in un funded pensions.

IN the 70 the terrible energy policy of One Jimmy Carter, and the deep recession made it impossible for the american car makers to sell at a profit with thier labor costs. So the Asian imports got better gas milage and we a lot cheeper, and this hurt the auto companies that were being held hostage by the Unions!

So while your post was touching???? It was also Bullshit!

[patrickt]

didn't detroit get it's voting rights abridged by the state putting in one of those 'managers'? throwing cities into default seems to be a pattern among those appointees.

and you can't keep cutting federal funding.

you cut federal funding, states have to cut funding.

and jobs

and then unemployment goes up.

and there are less taxes being paid.

and less money for the state to spend.

so the state cuts funding to municipalities

which cut jobs

and improvements

and less tax money is going into the system

and there is less money to spend.

THIS is austerity.

And that is why economies don't grow under austerity/austrian economics.

Detroit is what the liberals can do for you.

Jillian does have a great strategy. If you string enough nonsense together, throw in a few outright lies and people won't go to the trouble of refuting each and every one of them.
Nonsense--I don't remember that.....
Lies--the taxpayers have been paid back

[patrickt]

Jillian, read this:
http://www.fool.com/investing/general/2013/03/23/why-government-motors-still-owes-you.aspx
An article from The Motley Fool.

You really should lie, Jillian. I realize blaming others is what liberals do but there are limits.

[zelmo1234]

Jillian, read this:
http://www.fool.com/investing/general/2013/03/23/why-government-motors-still-owes-you.aspx
An article from The Motley Fool.

You really should lie, Jillian. I realize blaming others is what liberals do but there are limits.

I think you have liberals pegged a bit wrong.

a Conservative will judge a program or policy a the success of that program, If something is to create jobs and does nto they will call it a failure. If ti does it is successful!

That is not how the liberal mind works? They judege everything on Compassion! I a program is desigened to be conpasionate and help people, IT IS A GREAT PROGRAM! take SS for example. It was designed to be compassionate to the elderly and protect them in the aging years. GREAT PROGRAM! And they will defend it to the death!

Today this program dooms the elderly in to dire poverty and dispare, it takes 6.5% of every working persons income, enough money to make even a minimum wage worker rich in there ageing years. and dooms them to living well below the poverty level.

YET TO A LIBERAL THIS PROGRAM IS A HUGE SUCCESS, BECAUSE IT WAS DESIGNED TO BE COMPASIONATE! and that is all that matters to a liberal. Just because it is not working does not make a difference in their mind!

[Chris]

I think you have liberals pegged a bit wrong.

a Conservative will judge a program or policy a the success of that program, If something is to create jobs and does nto they will call it a failure. If ti does it is successful!

That is not how the liberal mind works? They judege everything on Compassion! I a program is desigened to be conpasionate and help people, IT IS A GREAT PROGRAM! take SS for example. It was designed to be compassionate to the elderly and protect them in the aging years. GREAT PROGRAM! And they will defend it to the death!

Today this program dooms the elderly in to dire poverty and dispare, it takes 6.5% of every working persons income, enough money to make even a minimum wage worker rich in there ageing years. and dooms them to living well below the poverty level.

YET TO A LIBERAL THIS PROGRAM IS A HUGE SUCCESS, BECAUSE IT WAS DESIGNED TO BE COMPASIONATE! and that is all that matters to a liberal. Just because it is not working does not make a difference in their mind!

Exactly. That's what's called emotionalism.

And if you dare argue against it rationally you're a heartless, selfish, greedy __<fill in blank>___!!

[Polt]

Today this program dooms the elderly in to dire poverty and dispare, it takes 6.5% of every working persons income, enough money to make even a minimum wage worker rich in there ageing years. and dooms them to living well below the poverty level.

It's 12.4%, not 6.5%. As is, it provides enough money for food and rent. If they weren't paying SS taxes, millions would be spending the money and wouldn't have anything at retirement.

Sure, SS can be improved. I'd love to see it be a lot harder to get SS disability.

I

[Dr. Who]

I think you have liberals pegged a bit wrong.

a Conservative will judge a program or policy a the success of that program, If something is to create jobs and does nto they will call it a failure. If ti does it is successful!

That is not how the liberal mind works? They judege everything on Compassion! I a program is desigened to be conpasionate and help people, IT IS A GREAT PROGRAM! take SS for example. It was designed to be compassionate to the elderly and protect them in the aging years. GREAT PROGRAM! And they will defend it to the death!

Today this program dooms the elderly in to dire poverty and dispare, it takes 6.5% of every working persons income, enough money to make even a minimum wage worker rich in there ageing years. and dooms them to living well below the poverty level.

YET TO A LIBERAL THIS PROGRAM IS A HUGE SUCCESS, BECAUSE IT WAS DESIGNED TO BE COMPASIONATE! and that is all that matters to a liberal. Just because it is not working does not make a difference in their mind!
Easy to criticize. How would you suggest we help the elderly?

[zelmo1234]

It's 12.4%, not 6.5%. As is, it provides enough money for food and rent. If they weren't paying SS taxes, millions would be spending the money and wouldn't have anything at retirement.

Sure, SS can be improved. I'd love to see it be a lot harder to get SS disability.

I

I was talking about the employee/s share, the employers share would still be needed for all the pother crap they now put under SS

If workers were allowed to invest in managed funds. they woudl retirme inluxury instead of poverty and they would leave a balance to there family when they passed on!

Libs risist this change because it never was about helping, only preceived compassion!

[zelmo1234]

Easy to criticize. How would you suggest we help the elderly?

I would suggest that we let the employers choose to invest theire own portion of SS in moderate risk funds with security gaps that move fund into secure investments as the workers ages

This would allow a minimum wage earner to retire in luxury and upon death they would leave the balance to their family!

The current system is a promis of proverty and they take anything that would be left upon death!

It is not hard! But it takes liberals admiting that what we have does not work!

[Dr. Who]

I would suggest that we let the employers choose to invest theire own portion of SS in moderate risk funds with security gaps that move fund into secure investments as the workers ages

This would allow a minimum wage earner to retire in luxury and upon death they would leave the balance to their family!

The current system is a promis of proverty and they take anything that would be left upon death!

It is not hard! But it takes liberals admiting that what we have does not work!

Not a bad proposal, but what happens when, as there has been in the past, there is a stock market collapse that devalues every investment portfolio. If the collapse is bad enough, all of those pre-retirement people end up with at best a pittance.

[TheInternet]

Easy to criticize. How would you suggest we help the elderly?

You don't. They had 65 years to plan for it.

[BB-35]

Sad,you look at detroit in google earth,and you see vacant lots all over the city that once held homes and businesses....You can tell by the remains of what used to be driveways...

[patrickt]

I was talking about the employee/s share, the employers share would still be needed for all the pother crap they now put under SS

If workers were allowed to invest in managed funds. they woudl retirme inluxury instead of poverty and they would leave a balance to there family when they passed on!

Libs risist this change because it never was about helping, only preceived compassion!

Employer share/Employee share is irrelevant. Millions are self-employed and have to pay the whole thing. Liberals like to pretend that 6.4% of your gross is the FICA tax. That is another liberal lie.

Polt, if the state doesn't take your money and piss it away then you might piss away your money. How bizarre. I know old people who are getting less than $500 a month from Social Security and you want to know how they would survive without SS. The same way they do now. With welfare. Old age on the dole. Food stamps. Housing subsidies. Medicaid.

FWIW, I don't draw Social Security because I didn't pay into it for the required 40 quarters but I get by because I did prepare for retirement. I don't get by as well as retired federal employees but then that's another thread, isn't it?

[zelmo1234]

Not a bad proposal, but what happens when, as there has been in the past, there is a stock market collapse that devalues every investment portfolio. If the collapse is bad enough, all of those pre-retirement people end up with at best a pittance.

I take it you are at best a nervous stock investor.

First if you would ahve had all of your money in managed stock accounts during the last crash, which was in 09 would you be ahead today or behind???

In a managed account that was selling and buying more shares on the way down you would be way ahead.

So we can take from that that it is possible that losses can accure.

So at age 45 if the market is not in a chrash situation you move 30% into secure investments. Munies are a great place.

At age 50 you move 10% more if not in a crash position

At age 55 you move10% more if not in a crash position

At age 6o you move 15% more if not in a crash position

And at retirement you move the final 10% leaving 25% still in growth positions with the rest giving about a 4% in todays markets, and 6 to 7% in normal interest.

The groth portion will average about 10%

Taking into accounts all of the crashes, including the great depression, you money doubles every 7 years.

meaning with this formula a worker that worked from 18 to 65 and made minimum wage, never a dime more

Would retire with an income of about 43K per year! under the current system the would retire will an income of about 13K

Yes the market goes up and down, but the poor loose in the market because they sell when it is down and buy when it is high. This system would not allow for personel control of the funds, so they wold still be investing at the bottom.

It they reach an age when they should be moving money, and the market is down, they managers rides the market back up and move the money when in a recovery status.

And you would never have all eggs in one basket! for example if you were a GM bond holder and had all of your money in secure bonds with GM, you wold expect to be paid first, The Obama administration usurped that las and you would have lost everything!

Mamaged funds would never have more that 5% of your money in any one item

The stock market going down is a fear tactic of the left to keep the poor dependednt and voting for democrats.

[zelmo1234]

Employer share/Employee share is irrelevant. Millions are self-employed and have to pay the whole thing. Liberals like to pretend that 6.4% of your gross is the FICA tax. That is another liberal lie.

Polt, if the state doesn't take your money and piss it away then you might piss away your money. How bizarre. I know old people who are getting less than $500 a month from Social Security and you want to know how they would survive without SS. The same way they do now. With welfare. Old age on the dole. Food stamps. Housing subsidies. Medicaid.

FWIW, I don't draw Social Security because I didn't pay into it for the required 40 quarters but I get by because I did prepare for retirement. I don't get by as well as retired federal employees but then that's another thread, isn't it?

It is totally relevant. because you still ahve to fund medicare and disability, not to mention the welfare programs. This would require the funds that is the empolyers share to be held for these items!

You could not invest the intire 12.4% If you could even a minimum wage worker would be a multi millionair when they retired!

But you are totally correct, the current system is a guarentee of poverty.

Imagin those that worked and paid into the sytem, at minimum wage, instead of gett 500 a month after medicare insurance. would be making about 40K per year, you tell me what is better.

And when they die know if they had any savings they used it, under my system you cold do one of 2 things.

Either it would be passed on to family in one lump sum, or if you really wanted the market to be stable you would only allow for the interest to be paid out to the family!

Under this plan welfare itself would be gone in 4 generations. because you wold make enoung from the labors of your parents and grand parents to support yourself.

then the employer share could be used to pay off the national debt. In 75 years the country could be debt free and have a population with no poverty in 100 years.

Not to mention that all of this money would be taxable, so even if they lowered tax rates to historical lows, they would have at least a trillion more to spend, and not ahve welfare, medicare or ss or the interest on the debt!

Imagine the quality of the roads, education, nedical research and even green energy reaserch! The military could be state of the art, and one of the better paying jobs !

The posibilitie are endless if they let free market principles work for the peiople !

[zelmo1234]

For those interested in the math. a minimum wage worker pay about 1033. per year into FICA

using the historical average of that money doubling every 7 years. the investment of his ifrst year working would be?

About 37K because you start putting money into seure funds as the person ages.

This is from one year say age 19 to 20 years of age.

If we take the average rate of return from the secure investment you would have 2100 dollars in income from that one year. And of course you make this for about yoru first 7 years, then the money per year starts to drop, because you dont have as much time.

But what are the odds that a person would never make more than minimum wage?

Or you could look at it this way if a person worked minimum wage for 10 years and then never worked again?

They would have a retirement income of over 11K per year. and they which is much more than many receive on SS

[zelmo1234]

And last here is just an example of the what the first year collar graduate could expect.

figuring they enter collage at age 19 and say the take their time and do not work any job until they are out at age 24!

They make the fist year average of 37.5K with a fica deductions of about 2340.00 retiement savings from first year. about 98K with yearly income of about 7K

You tell me why we love SS so much!

[Peter1469]

Not a bad proposal, but what happens when, as there has been in the past, there is a stock market collapse that devalues every investment portfolio. If the collapse is bad enough, all of those pre-retirement people end up with at best a pittance.

Such collapses are rare. Also if you think about it, the average loss in 2008 was 40%. The remaining investment would still be far far greater than social security benefits.

And the government could have some sort of program to cover some of these losses, the way it does for bank deposits. It would be a lot cheaper than bailing out the failing financial institutions.

What would have happened in 2008, if instead of bailing out the banks and big corporations, the government let them fail and instead bailed out the people? Then the market would correct the market place and the people could ride it out. We would be in a much better position today, with new bank and corporate leadership that understood they had to act responsibly because there are no bailouts coming.

[Peter1469]

I think that it is worth pointing out that social security was enacted at a time where the majority of people didn't earn enough to save. Social security was not meant to be an investment, it was meant to be a safety net. We can reform social security to become both a safety net and an investment. The safety net doesn't need to be large. And the investment part of it could create a large nest egg.

[Dr. Who]

I think that it is worth pointing out that social security was enacted at a time where the majority of people didn't earn enough to save. Social security was not meant to be an investment, it was meant to be a safety net. We can reform social security to become both a safety net and an investment. The safety net doesn't need to be large. And the investment part of it could create a large nest egg.It should be administered like any other pension fund. Most properly administered pension funds weather the ups and downs of the stock market by the type of investments they make. Of course that would require that SS contributions be directed specifically to the fund, rather than ending up in a government slush fund to be pilfered at will.

[Peter1469]

It should be administered like any other pension fund. Most properly administered pension funds weather the ups and downs of the stock market by the type of investments they make. Of course that would require that SS contributions be directed specifically to the fund, rather than ending up in a government slush fund to be pilfered at will.

Right. Currently social security is not invested to grow. It is a slush fund.

[Chris]

SS's also not voluntary.

Dick Armey has been battling that for years.

[Polt]

I was talking about the employee/s share, the employers share would still be needed for all the pother crap they now put under SS

It all comes out of the employees' pocket. What you're talking about is just bookkeeping semantics.


If workers were allowed to invest in managed funds. they woudl retirme inluxury instead of poverty and they would leave a balance to there family when they passed on!

If ALLOWED they wouldn't. They'd live in luxury now and retire in absolute poverty.

You should be paying me for the education, not arguing with me.

[Peter1469]

It all comes out of the employees' pocket. What you're talking about is just bookkeeping semantics.



If ALLOWED they wouldn't. They'd live in luxury now and retire in absolute poverty.

You should be paying me for the education, not arguing with me.

If that is what they want, why step in and stop it?

[Polt]

using the historical average of that money doubling every 7 years. the investment of his ifrst year working would be?

Your logic is like a guy who spends one hour to pick all the apples off of his apple tree. He picks 100 apples in one hour and then figures that if he spent two hours picking apples, he'd have 200 apples.

Your logic is like a guy who picks 100 apples off of his apple tree, year after year, all his life. And, figures that he'll always be able to get 100 apples off of that same tree for the rest of his life, and his children's lives.

Your logic is like a guy who observes that healthy apple trees produce 100 apples on average so if everyone has their own apple tree, everyone will have 100 apples. Including the guy whose apple tree died.

Your logic is like a guy who owes a 100 apples to pay pre-existing government apple distribution obligations figuring that with his one 100-apple apple tree he can pay those obligations and keep 100 apples to himself.

[zelmo1234]

Such collapses are rare. Also if you think about it, the average loss in 2008 was 40%. The remaining investment would still be far far greater than social security benefits.

And the government could have some sort of program to cover some of these losses, the way it does for bank deposits. It would be a lot cheaper than bailing out the failing financial institutions.

What would have happened in 2008, if instead of bailing out the banks and big corporations, the government let them fail and instead bailed out the people? Then the market would correct the market place and the people could ride it out. We would be in a much better position today, with new bank and corporate leadership that understood they had to act responsibly because there are no bailouts coming.

anyone that left there money alone in 08 - 09 has far more money today than they did in 08!

But if you manage the money so that the majority of the money is in securities rather than stocks, you oney need to worry about the people that are retiring in 5 years if the market doe snot recover, they would loose a little toward there retirment it would noly be about 3 times that of SS for them.

The truth is the only reason that we have the promise of poverty called SS is that Democrats need people dependent on the govenrment or they will loose there voting base and power!

If we really cared about the people this theft of their wealth would stop!

[zelmo1234]

Your logic is like a guy who spends one hour to pick all the apples off of his apple tree. He picks 100 apples in one hour and then figures that if he spent two hours picking apples, he'd have 200 apples.

Your logic is like a guy who picks 100 apples off of his apple tree, year after year, all his life. And, figures that he'll always be able to get 100 apples off of that same tree for the rest of his life, and his children's lives.

Your logic is like a guy who observes that healthy apple trees produce 100 apples on average so if everyone has their own apple tree, everyone will have 100 apples. Including the guy whose apple tree died.

Your logic is like a guy who owes a 100 apples to pay pre-existing government apple distribution obligations figuring that with his one 100-apple apple tree he can pay those obligations and keep 100 apples to himself.

Yes I beleive that we all should learn to grow app,e trees instead of some saying well the apple tree the governemnt gave me dies. so now you have to give me some of your apples. I know that you took care of the seedlings and now you have an orchard, but vecause I chose to just pick apples and you put in the estra effort to have an orchard, You need to give me your excess.

So to answer you question I DO NOT BELEIVE IN REDISTRIBUTION OF WEALTH. I believe in giveing everyone the oppertunity to own an orchard.

If you are happy with the promise of poverty that SS is, then Great! stay with it.

The truth is we have a system that needs to be starved to death, and to do that it need to be replaced with a program that will eventually kill it! Investment is that program,

Why do you think Dems are so against it! They know that very quickly people will see that thier compassion was a lie! And the system one takes what they could have had and destroys it!

And if you are one of the majority of the peoplation that does not understand how investing works. That would be OK under this system because ti would be totally managed. So no worries to the person that would make the mistake of selling low and buying high!

[zelmo1234]

It all comes out of the employees' pocket. What you're talking about is just bookkeeping semantics.



If ALLOWED they wouldn't. They'd live in luxury now and retire in absolute poverty.

You should be paying me for the education, not arguing with me.

Tell you what I will pay you for the education if you can tell me how I can avoid paying my part of FiCA taxes for my employees.

This wouls save myu company hundreds of thousands of dollars. I will split it with you if you can show me how to do it without violation of the law????

Next this investment would not me volentary either, thus that billions that are going into the market because the Fed is printing money. )qunative easing) would be going in every month because of workers investing! Thus making large dips in the market less likely?

Also I tend not to take financial advice from poor people, there is a reason that they are poor!

[Polt]

Tell you what I will pay you for the education if you can tell me how I can avoid paying my part of FiCA taxes for my employees.

I don't think your employees would appreciate a 6.2% compensation cut.

[Mainecoons]

I'm not sure how you would equate that to a compensation cut since it has already been determined that FICA is nothing but another tax, the mythical surpluses having long since been pissed away on a whole load of useless crap having nothing to do with retirement, in addition for which it has already been determined the current payees unless they are about to retire, won't collect squatola from all those FICA taxes they and their employers had stolen from them.

Try a little reading on the size of the unfunded liability of Social Security and Medicare. I'm nearly 70 and I'll be surprised if the rug isn't pulled out from under me before I can hurry up and die.

[Polt]

So to answer you question I DO NOT BELEIVE IN REDISTRIBUTION OF WEALTH.

The purpose of SS is not redistribution. The purpose is retirement insurance. And, it redistributes less than any other kind of insurance.


If you are happy with the promise of poverty that SS is, then Great! stay with it.

You're free to save for retirement above and beyond SS. And, I'm not against crackdowns on abusers of SS (millions of people who fake or exaggerate disability), leaving more money to those paying in.


The truth is we have a system that needs to be starved to death, and to do that it need to be replaced with a program that will eventually kill it! Investment is that program

Do you mean federally mandated stock market contributions? If you're a businessman, I sure hope your business is publically traded. That way, at least there would be some incentive for you to support such a bad idea.

If you're really a businessman, why don't you understand that all FICA comes out of your employees' pockets? If you're really a businessman, why don't you understand that national ROI doesn't scale with contributions? If you're really a businessman, why don't you understand that that all current SS contributions are already committed and unless you want to raise taxes, there's no money for mandatory stock market investment.

[Polt]

I'm not sure how you would equate that to a compensation cut since it has already been determined that FICA is nothing but another tax, the mythical surpluses having long since been pissed away on a whole load of useless crap having nothing to do with retirement, in addition for which it has already been determined the current payees unless they are about to retire, won't collect squatola from all those FICA taxes they and their employers had stolen from them.


Let's make this real simple: There is 12.4% tax of employee's pay for SS.

Scenario 1: worker pays half of SS
Employee gets $9.38 takehome.
The IRS gets $1.24 in taxes.
Employer pays $10.62 for the employee.

Scenario 2: worker pays all of SS
Employee gets $9.38 takehome.
The IRS gets $1.24 in taxes.
Employer pays $10.62 for the employee.

Everything else is just bookkeeping.

All other things being equal, if the employer doesn't pay that 6.2%, the employee's net takehome drops by 6.2%, because the IRS is still going to collect $1.24 from someone. So, the employee is going to quit (in a dynamic free market). And, if the IRS didn't have a SS tax in the first place, the employer would still be paying that $10.62 because that's what the market demands.

[Chris]

The purpose of SS is not redistribution. The purpose is retirement insurance. And, it redistributes less than any other kind of insurance.

It's nothing but a redistributive Ponzi scheme. The current workforce pays in and what they pay in is paid out to retirees. That is why it's in trouble, there's not enough youth to pay in to cover the expansion of old farts going into retirement. And it's not just baby boomers, but unemployed taking early retirement, and an ever increasing amount of income over the minimum cap not being paid in--see The Impact of the Upward Redistribution of Wage Income on Social Security Solvency (http://www.cepr.net/index.php/blogs/cepr-blog/the-impact-of-the-upward-redistribution-of-wage-income-on-social-security-solvency).

It's going to fail like any other Ponzi scheme:


Social Security is a "pay-as-you-go" system. This means that when you work, the government takes your money and gives it to Social Security recipients. In order to get workers to accept this system, the government promises to take other people's money and give it to you when you retire. Think of it as an exponentially larger version of Bernie Madoff's Ponzi scheme.

@ The Social Security Scam (http://mises.org/daily/3469)

[TheInternet]

The purpose of SS is not redistribution. The purpose is retirement insurance. And, it redistributes less than any other kind of insurance.



You're free to save for retirement above and beyond SS. And, I'm not against crackdowns on abusers of SS (millions of people who fake or exaggerate disability), leaving more money to those paying in.



Do you mean federally mandated stock market contributions? If you're a businessman, I sure hope your business is publically traded. That way, at least there would be some incentive for you to support such a bad idea.

If you're really a businessman, why don't you understand that all FICA comes out of your employees' pockets? If you're really a businessman, why don't you understand that national ROI doesn't scale with contributions? If you're really a businessman, why don't you understand that that all current SS contributions are already committed and unless you want to raise taxes, there's no money for mandatory stock market investment.

Social security is HEAVILY redistributive.

[zelmo1234]

I don't think your employees would appreciate a 6.2% compensation cut.

Great so you admit that the employers do pay into the system. Now we just need ot fix the system so it is not stealing the wealth of the poor and working middle class!

[zelmo1234]

The purpose of SS is not redistribution. The purpose is retirement insurance. And, it redistributes less than any other kind of insurance.



You're free to save for retirement above and beyond SS. And, I'm not against crackdowns on abusers of SS (millions of people who fake or exaggerate disability), leaving more money to those paying in.



Do you mean federally mandated stock market contributions? If you're a businessman, I sure hope your business is publically traded. That way, at least there would be some incentive for you to support such a bad idea.

If you're really a businessman, why don't you understand that all FICA comes out of your employees' pockets? If you're really a businessman, why don't you understand that national ROI doesn't scale with contributions? If you're really a businessman, why don't you understand that that all current SS contributions are already committed and unless you want to raise taxes, there's no money for mandatory stock market investment.

As I said I pay a very, very large check to the government for the porgrams each and every month!

My employees pay 6.2% or close I would ahve to talk to accounting to get the exact number.

And yes the current system because the politicians stole from the trust fund is being supported by the workers.

So you would have to phase it in! The way that you would do this is to leave everything the same for those over 40

for those between 30 and 40 they would get a 33% cut in benifits but would get to invest 33% of thier share of the contributions! giving them about a 25% increase in benifits overall!

those between 20 and 30 would get reduced benifits of 50% but get to invest 50% of thier funds. and they would get a increaes in premiums for medicare. but at retirement they would have an increase in benifits of about 70% even after the higher premiums.

Those that are under 20 would receive NO SS payments and would be able to invest 75% of thier contributions. and would have the higher medicare premiums. there benifits would increase by about 300%

All of the employer contributions would remian in the system. The system would run a deficite for about the first 20 years, then would stabelize and when the 20 somethings retire would be running hug surpluses. to pay past deficites.

The next step would be to increase it so those people entering the workforce woudl get to invest all of their part of the FICA taxes and they would pay for thier insurance, Medicare would fade away. but they would have an increae in beifits of 700 to 900%

I can tell by your comments that you dont' understand the current system or how money works! And that is a common problem! Why do you think it is nearly impossible for the working poor and middle class to make it iwth their investments. They are selling when the rich are buying and they are b uying when the rich are selling!

This creates your fear of investment. Now I also do not recomend a 100% investment in the market, that is all of your eggs in one basket? That would be stupid!

[Micketto]

Detroit won't pay $2.5B it owes (http://www.breitbart.com/system/wire/DA6TMNC00)



This will likely become a trend as cities run out of money.


Proper bankruptcy procedure is the only thing that can save Detroit.
They vote in corrupt mayor after corrupt mayor, the current one is in prison and refusing to pay back the hundreds of thousands he stole for his relatives, wife... and girlfriend.
This is the place Detroiters put themselves.
Now, with an ex-NBA star in charge, refusing to come up with a budget year after year.... the governor threatened a financial manager and the mayor says "oh. ok then... we'll make a budget".
But didn't.

Governor Snyder HAD to hire the city manager.



Who was it that said "let Detroit go bankrupt".... I forget.
Going bankrupt and working things out the proper way is the best thing that could happen.
Turns out that was pretty wise advice, I must say.

Instead, someone chose to bail out a couple of the auto companies and wiped their debt free. Talk a bout a loss of taxes to the city and a sign that failing is OK because the President will step in and buy you.

[Micketto]

Detroit is what the liberals can do for you.

Jillian does have a great strategy. If you string enough nonsense together, throw in a few outright lies and people won't go to the trouble of refuting each and every one of them.


Don't forget the insulting names she always, angrily throws in.

Odd way to debate, but right in line with the "tolerant" left.
If someone doesn't agree with you, call them names, lie and scream.

[Micketto]

You don't. They had 65 years to plan for it.

We are apparently committed to help those that never bothered to think of how they will survive in the future.

[TheInternet]

We are apparently committed to help those that never bothered to think of how they will survive in the future.

People depend on the nanny state. Cradle to grave gov care.

[Peter1469]

An update: (http://www.bloomberg.com/news/2013-06-17/detroit-recovery-plan-threatens-muni-market-underpinnings.html)

The media now is stating that Detroit should pay its debt, or it will threaten the municipal bond market.

What part of there is no money left, don't they get?


Emergency Manager Kevyn Orr’s plan to suspend payments on $2 billion of Detroit’s debt threatens a basic tenet of the $3.7 trillion municipal market: that states and cities will raise taxes as high as needed to avoid default.


Orr, appointed by Republican Governor Rick Snyder to oversee Michigan (http://topics.bloomberg.com/michigan/)’s largest city, proposed a deal last week that included skipping a $39.7 million payment on pension-obligation debt. The city is also set to default on unsecured unlimited-tax and limited-tax general-obligation bonds as it grapples with $17 billion in liabilities to avoid a record bankruptcy.