A look back to 2005 when George Bush wanted to allow citizens to privatize (own and invest) 1/3 of their Social Security contributions. Where would be be today?
This doesn’t take into account for the 2008-2009 financial crisis. If this had taken place there’s no telling how the Social Security trust fund could or would’ve tanked if it was reliant on the stock market.
This person probably doesn't own any capital anyway, the worst capitalist is the one who doesn't own any capital but argues for tax cuts and deregulation and privatization because they believe meritocracy exists and they will be billionaires one day. If this person had his way, poverty would increase greatly or be rampant, we would be in a society of "if I had to suffer, you have to suffer". This person's ideology is only about the sick hording of wealth while screaming to hell with society.
So you should have noticed that I said 10% is the AVERAGE OVER TIME. While there are certainly "down years", there are also years that are up 40%. Also keep in mind this exercise is focused on the ONE THIRD of your SSI funds that became "yours". You would STILL have 2/3 of your regular SSI insurance in the account that the Social Security Administration manages for you.
Cool video, thanks for posting it. I suppose my criticism is less about the *in principle* idea of personalizing Social Security than the *practical realities* of doing so. As I understood it at the time (as a Millennial), and still understand it now, key problems overlooked bg GWB's were a) lack of financial education among the general population, b) lack of a regulatory structure to minimize predation by profilgate agents of that lack of financial education, and c) the post-9/11 Jobless Recovery that prefigured what came in the Great Recession (i.e., for a great many people, especially Milennials, there were no incomes with which to invest, and interest rates would obliterate what little we could input). Your thoughts? (Personal background. I've been living outside the US for almost 13 years, gaining an advanced humanities education while living threadbare. Later this year, after finishing my philosophy PhD, I'll begin a postdoc in an AI lab. This will be my first "real" job in the US, at the age of 40, earning 50k gross. I'm hoping to figure out a pathway of either quickly earning a near-future salary sufficiently large enough to recoup the "lost" years of education, or work an extra decade and just retire at 75-80, on the assumption that I will live an extra decade -- per current statistics + family history -- and the official retirement age will need to be pushed into the 70s anyway.)
Thank you very much for watching my video and taking the time to reply. You're 100% on target that the biggest obstacle was PUBLIC UNDERSTANDING of investment principals. When people heard their future was going to be, "Invested in the stock market", they interpreted that as "gamble" and "risk" and "losing it all", and that caused enough fear that Bush's [political] opponents justified defeating the idea... which is completely comical given the widely-accepted mantra of everyone promoting 401K contributions (which simply work the same way). Bush tried to explain the available investment choices were the same as what Congress had in their retirement plan, but ignorance (and political opposition) prevailed and all of us lost out, and since Gore lost the election, even the "locked box" idea died and the status quo prevails. As to your personal situation all I can do is offer this tidbit.... You're surviving on your current level of income. Count any salary increase as "investment" money and start funding your ROTH 401K or ROTH IRA as fast and heavily as you can. The sooner you invest, the more the magic of Compound Interest will help you. Good luck!
The problem I see is that social security is being paid out by people currently paying in. To do this plan you would essentially have to cut benefits currently being paid by 33% and that could lead to a lot of poverty. Also, this is after 41 years, meaning that $1 million would be worth about 1/3rd of what that $1 million would be worth today and considering the safe withdrawal rate is about 4% we are essentially talking about $1k/month in retirement income and the guaranteed social security benefits having to be cut by about 33% to get it. So it might be a benefit if you still have 40 years, but it'll end up costing you if you only have say 20 or 15 years left. I prefer having a safer option with social security and a 401k plan option to compliment it. Maybe, the government should be allowed to invest a fraction of the social security funds into an S&P 500 fund though. That might strengthen the program.
No, the Bush plan allowed you to redirect up to 33% of the amount you're already contributing into "your" account, so there would be no need to cut/increase FICA taxes. The "inflation factor" you mention is moot. Inflation is happening with or without this option.
@@DeathScouter The money you pay in today is directly funding the funds that are being paid out today. It's not sitting in a private account, it's being used. If you cut the amount that goes into social security it's inevitable that you will have to cut social security benefits. There's no way around it. Yes, inflation is going to happen regardless. But it's worthwhile to put it into perspective. That $1 million would realistically be worth about $340k and unless you plan on passing away your first year you'll need to think about the cash flow that you will get from it vs the cash flow you would lose by having less money going into the general fund. Sure, if you are 20, it's a good deal because you have tons of time to let it compound and will likely be better off. If you are 50 you'll be worse off because the cash flow from the money you saved will be more than offset by the inevitable cuts to social security.
@@DeathScouter The only way a cut in benefits would not be inevitable would be if they increased the social security tax and put that increased amount into a private plan. Over the decades you could "weed people off" of the social security system by gradually decreasing benefits and increasing the private section of the contributions. It would be a long term play, but idk if our politicians are capable of making long term plays. 😂
Democratizing the workforce is the first major step in changing this capitalist system to something entirely different or becoming capitalism 2.0, where instead of the upper class taking an undeserved huge amount of the profit, it will be fairly distributed. The overall goal is a world with no money,class,poverty and bigotry. Capitalism has held us back so much that it is crazy to think how far we would be ahead in every major aspect of society if the accumulation of wealth wasn't the main goal, meritocracy is a lie that has been repeated to keep this system going. Until then, unions and co-ops are the first steps towards democratizing labor. Can't forget pensions either at this moment, and how they are much better than 401ks.
Or instead we can guarantee a specific amount instead of taking risks with a capitalist free market that has built in recessions and depressions that you conveniently left out and didn't expand upon. We can take off the cap on income for social security and increase payments greatly, which could already be done. Government dependence as you call it has done more for the citizens of this country than any charity or morbidly wealthy person combined. Not one thing can touch what SSI,medicare, public education and welfare have done for people. Remember, if not for these programs, it would be upon the whim of the morbidly wealthy if they felt like they should grace us with some money, that we labored for and added value to said product and they take a greater amount of the profit because they deserve it more, after all is debated. I say keep that proverbial gun to the head as the morbidly wealthy call SSI. Capitalism will never get us to a world without money,class,poverty and bigotry, it requires exploitation of a lower class.
The Bush Plan would have limited your investment choices to the SAME OPTIONS that Congressmen and Senators have in THEIR retirement plans. You would not have been able to invest in "crypto" or some unknown "dot com". The choices would have had "safe" limits, it would not have been a "free for all" for people who have no idea how to invest.
@@jaymorin7131 Well I just showed you the actual math, so for me to take your comment seriously, I would like a little more substance from you. The idea of empowering EVERY citizen to participate in Market growth and KEEP what is literally "THEIR" money sounds like a good plan to me, especially when the alternative is the status quo of a "ponzi scheme" that is mathematically unsustainable. Comment on that?
This doesn’t take into account for the 2008-2009 financial crisis. If this had taken place there’s no telling how the Social Security trust fund could or would’ve tanked if it was reliant on the stock market.
This person probably doesn't own any capital anyway, the worst capitalist is the one who doesn't own any capital but argues for tax cuts and deregulation and privatization because they believe meritocracy exists and they will be billionaires one day. If this person had his way, poverty would increase greatly or be rampant, we would be in a society of "if I had to suffer, you have to suffer". This person's ideology is only about the sick hording of wealth while screaming to hell with society.
So you should have noticed that I said 10% is the AVERAGE OVER TIME. While there are certainly "down years", there are also years that are up 40%. Also keep in mind this exercise is focused on the ONE THIRD of your SSI funds that became "yours". You would STILL have 2/3 of your regular SSI insurance in the account that the Social Security Administration manages for you.
@@DeathScouter 10%!! ARE YOU FOR REAL!!! And we now have the post Covid recession! This plan sucks ass.
Cool video, thanks for posting it. I suppose my criticism is less about the *in principle* idea of personalizing Social Security than the *practical realities* of doing so. As I understood it at the time (as a Millennial), and still understand it now, key problems overlooked bg GWB's were a) lack of financial education among the general population, b) lack of a regulatory structure to minimize predation by profilgate agents of that lack of financial education, and c) the post-9/11 Jobless Recovery that prefigured what came in the Great Recession (i.e., for a great many people, especially Milennials, there were no incomes with which to invest, and interest rates would obliterate what little we could input). Your thoughts?
(Personal background. I've been living outside the US for almost 13 years, gaining an advanced humanities education while living threadbare. Later this year, after finishing my philosophy PhD, I'll begin a postdoc in an AI lab. This will be my first "real" job in the US, at the age of 40, earning 50k gross. I'm hoping to figure out a pathway of either quickly earning a near-future salary sufficiently large enough to recoup the "lost" years of education, or work an extra decade and just retire at 75-80, on the assumption that I will live an extra decade -- per current statistics + family history -- and the official retirement age will need to be pushed into the 70s anyway.)
Thank you very much for watching my video and taking the time to reply. You're 100% on target that the biggest obstacle was PUBLIC UNDERSTANDING of investment principals.
When people heard their future was going to be, "Invested in the stock market", they interpreted that as "gamble" and "risk" and "losing it all", and that caused enough fear that Bush's [political] opponents justified defeating the idea... which is completely comical given the widely-accepted mantra of everyone promoting 401K contributions (which simply work the same way). Bush tried to explain the available investment choices were the same as what Congress had in their retirement plan, but ignorance (and political opposition) prevailed and all of us lost out, and since Gore lost the election, even the "locked box" idea died and the status quo prevails.
As to your personal situation all I can do is offer this tidbit.... You're surviving on your current level of income. Count any salary increase as "investment" money and start funding your ROTH 401K or ROTH IRA as fast and heavily as you can. The sooner you invest, the more the magic of Compound Interest will help you.
Good luck!
The problem I see is that social security is being paid out by people currently paying in. To do this plan you would essentially have to cut benefits currently being paid by 33% and that could lead to a lot of poverty. Also, this is after 41 years, meaning that $1 million would be worth about 1/3rd of what that $1 million would be worth today and considering the safe withdrawal rate is about 4% we are essentially talking about $1k/month in retirement income and the guaranteed social security benefits having to be cut by about 33% to get it. So it might be a benefit if you still have 40 years, but it'll end up costing you if you only have say 20 or 15 years left. I prefer having a safer option with social security and a 401k plan option to compliment it.
Maybe, the government should be allowed to invest a fraction of the social security funds into an S&P 500 fund though. That might strengthen the program.
No, the Bush plan allowed you to redirect up to 33% of the amount you're already contributing into "your" account, so there would be no need to cut/increase FICA taxes.
The "inflation factor" you mention is moot. Inflation is happening with or without this option.
@@DeathScouter The money you pay in today is directly funding the funds that are being paid out today. It's not sitting in a private account, it's being used. If you cut the amount that goes into social security it's inevitable that you will have to cut social security benefits. There's no way around it.
Yes, inflation is going to happen regardless. But it's worthwhile to put it into perspective. That $1 million would realistically be worth about $340k and unless you plan on passing away your first year you'll need to think about the cash flow that you will get from it vs the cash flow you would lose by having less money going into the general fund.
Sure, if you are 20, it's a good deal because you have tons of time to let it compound and will likely be better off. If you are 50 you'll be worse off because the cash flow from the money you saved will be more than offset by the inevitable cuts to social security.
@@DeathScouter The only way a cut in benefits would not be inevitable would be if they increased the social security tax and put that increased amount into a private plan. Over the decades you could "weed people off" of the social security system by gradually decreasing benefits and increasing the private section of the contributions. It would be a long term play, but idk if our politicians are capable of making long term plays. 😂
Democratizing the workforce is the first major step in changing this capitalist system to something entirely different or becoming capitalism 2.0, where instead of the upper class taking an undeserved huge amount of the profit, it will be fairly distributed. The overall goal is a world with no money,class,poverty and bigotry. Capitalism has held us back so much that it is crazy to think how far we would be ahead in every major aspect of society if the accumulation of wealth wasn't the main goal, meritocracy is a lie that has been repeated to keep this system going. Until then, unions and co-ops are the first steps towards democratizing labor. Can't forget pensions either at this moment, and how they are much better than 401ks.
Or instead we can guarantee a specific amount instead of taking risks with a capitalist free market that has built in recessions and depressions that you conveniently left out and didn't expand upon. We can take off the cap on income for social security and increase payments greatly, which could already be done. Government dependence as you call it has done more for the citizens of this country than any charity or morbidly wealthy person combined. Not one thing can touch what SSI,medicare, public education and welfare have done for people. Remember, if not for these programs, it would be upon the whim of the morbidly wealthy if they felt like they should grace us with some money, that we labored for and added value to said product and they take a greater amount of the profit because they deserve it more, after all is debated. I say keep that proverbial gun to the head as the morbidly wealthy call SSI. Capitalism will never get us to a world without money,class,poverty and bigotry, it requires exploitation of a lower class.
The Bush Plan would have limited your investment choices to the SAME OPTIONS that Congressmen and Senators have in THEIR retirement plans. You would not have been able to invest in "crypto" or some unknown "dot com". The choices would have had "safe" limits, it would not have been a "free for all" for people who have no idea how to invest.
@@DeathScouter The Bush Plan (aka the GOP plan to fuck-up Social Security) was bullshit! Thank the Lord this never happened.
@@jaymorin7131 Well I just showed you the actual math, so for me to take your comment seriously, I would like a little more substance from you. The idea of empowering EVERY citizen to participate in Market growth and KEEP what is literally "THEIR" money sounds like a good plan to me, especially when the alternative is the status quo of a "ponzi scheme" that is mathematically unsustainable.
Comment on that?