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Don't Count on the Government to Do Your Saving For You

LowDown

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California is considering implementing a version of the Ghilarducci Plan, in which automatic payroll deductions are used to create a defined-benefit fund run by the government, guaranteeing a modest minimum return, which is then rolled into an annuity at the age of 65.
Of course the main reason for a plan like this is to provide another revenue stream for the state government. The money collected for this from payroll will go straight into the general fund and will be spent immediately. Some paperwork in the way of bonds that will be held by the trust for the annuity will be required, of course, but they might as well print those on toilet paper. When it comes time to pay out those benefits they will be paid from the general fund where they will compete for all the other spending priorities. I seriously doubt that the politicians even care whether or not people eventually get these benefits; they've got their eye on that revenue stream and what they can do with that. The way that the Democrats are running California into the ground it's unlikely that the money will be there for these annuities or anything else.
 

thinkforyoursel

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Of course the main reason for a plan like this is to provide another revenue stream for the state government. The money collected for this from payroll will go straight into the general fund and will be spent immediately. Some paperwork in the way of bonds that will be held by the trust for the annuity will be required, of course, but they might as well print those on toilet paper. When it comes time to pay out those benefits they will be paid from the general fund where they will compete for all the other spending priorities. I seriously doubt that the politicians even care whether or not people eventually get these benefits; they've got their eye on that revenue stream and what they can do with that. The way that the Democrats are running California into the ground it's unlikely that the money will be there for these annuities or anything else.
The banks, the insurance companies is just one big Ponzi scheme bud. If 50,60 ...70% percent of all count holder in any bank suddenly tried to close their accounts and take back their money ....they would be shocked! Wall street have always been a a game of musical chairs ...because they don't build anything!!

You're 401K ...with that matching funds ...for most is still today locked up in some fund company selling people their dog stocks and funds ...with limited control over ...when they can get that money ...what they can invest in ...and more and more rules. And why the rules .....because there really is no money ....it's set up for them to get that money immediately ...buy their fancy cars and homes ...while you wait until near death to get it!!!

My angst here is ....yes the government shove the hot poker up our A$$ .....but it feels no different to me ...when the corporations do it!!

I wish you people with your anti-government jihad can understand this!!
 

greyhat

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The banks, the insurance companies is just one big Ponzi scheme bud. If 50,60 ...70% percent of all count holder in any bank suddenly tried to close their accounts and take back their money ....they would be shocked! Wall street have always been a a game of musical chairs ...because they don't build anything!!

You're 401K ...with that matching funds ...for most is still today locked up in some fund company selling people their dog stocks and funds ...with limited control over ...when they can get that money ...what they can invest in ...and more and more rules. And why the rules .....because there really is no money ....it's set up for them to get that money immediately ...buy their fancy cars and homes ...while you wait until near death to get it!!!

My angst here is ....yes the government shove the hot poker up our A$$ .....but it feels no different to me ...when the corporations do it!!

I wish you people with your anti-government jihad can understand this!!
Oh brother, another Wall Street basher that doesn't have a remote clue on finance... :roll:

Just because you can type "401k" doesn't mean you know what one is...much less anything about WS to start your bashing session.
 

LowDown

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The banks, the insurance companies is just one big Ponzi scheme bud. If 50,60 ...70% percent of all count holder in any bank suddenly tried to close their accounts and take back their money ....they would be shocked! Wall street have always been a a game of musical chairs ...because they don't build anything!!

You're 401K ...with that matching funds ...for most is still today locked up in some fund company selling people their dog stocks and funds ...with limited control over ...when they can get that money ...what they can invest in ...and more and more rules. And why the rules .....because there really is no money ....it's set up for them to get that money immediately ...buy their fancy cars and homes ...while you wait until near death to get it!!!

My angst here is ....yes the government shove the hot poker up our A$$ .....but it feels no different to me ...when the corporations do it!!

I wish you people with your anti-government jihad can understand this!!
You overstate the risk of investing in corporations, and of course corporations have their assets invested in capital, that's how they create earnings. Of course banks invest their assets, that's how they make a return. I would hope that everyone knows this. If there is a run on a bank the Fed steps in.

When state governments find that they don't have enough money to pay public sector pensions they just cut them. Increasingly this is happening. Cities are going into bankruptcy to shed pension obligations all over the country. They counted on future revenues to pay off those obligations, but the revenues didn't materialize. I don't think those workers were given any choice about what kind of pension they'd have and what they had to pay for it, either.

If corporations took our money and pounded it down a rat hole and then hoped that they'd be able to pay us back with the money they got from other investors then you'd have a point, but corporate stock is generally valued according to the value of the company and it's earnings, that isn't established by government fiat like the value of our social security is. Corporations must make a return and are continuously held to account by the markets.

You and I both know that California politicians don't have concerns about people's retirement in mind when they propose this scheme. They are offering what might end up being pie in the sky for a revenue stream now. The moral of the story is don't count on the government to do your saving for you. Save for yourself, invest wisely, and keep an eye on your investments.
 

thinkforyoursel

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Oh brother, another Wall Street basher that doesn't have a remote clue on finance... :roll:

Just because you can type "401k" doesn't mean you know what one is...much less anything about WS to start your bashing session.
...sorry ...next time I'll do what you do ...run to rush Limbaugh and shawn Hannity for ...LOGIC. :lamo
 

AliHajiSheik

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...sorry ...next time I'll do what you do ...run to rush Limbaugh and shawn Hannity for ...LOGIC. :lamo
I don't know about your insightful retort, but did you really think that the money deposited in banks is just sitting in the vault? Of course they don't have enough cash on hand because it has been loaned out to others. Ponzi scheme? No.
 

Dittohead not!

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Of course the main reason for a plan like this is to provide another revenue stream for the state government. The money collected for this from payroll will go straight into the general fund and will be spent immediately. Some paperwork in the way of bonds that will be held by the trust for the annuity will be required, of course, but they might as well print those on toilet paper. When it comes time to pay out those benefits they will be paid from the general fund where they will compete for all the other spending priorities. I seriously doubt that the politicians even care whether or not people eventually get these benefits; they've got their eye on that revenue stream and what they can do with that. The way that the Democrats are running California into the ground it's unlikely that the money will be there for these annuities or anything else.
that sounds a whole lot like Social Security to me.

Why would anyone invest in such a scheme?
 

thinkforyoursel

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You overstate the risk of investing in corporations, and of course corporations have their assets invested in capital, that's how they create earnings. Of course banks invest their assets, that's how they make a return. I would hope that everyone knows this. If there is a run on a bank the Fed steps in.

When state governments find that they don't have enough money to pay public sector pensions they just cut them. Increasingly this is happening. Cities are going into bankruptcy to shed pension obligations all over the country. They counted on future revenues to pay off those obligations, but the revenues didn't materialize. I don't think those workers were given any choice about what kind of pension they'd have and what they had to pay for it, either.

If corporations took our money and pounded it down a rat hole and then hoped that they'd be able to pay us back with the money they got from other investors then you'd have a point, but corporate stock is generally valued according to the value of the company and it's earnings, that isn't established by government fiat like the value of our social security is. Corporations must make a return and are continuously held to account by the markets.

You and I both know that California politicians don't have concerns about people's retirement in mind when they propose this scheme. They are offering what might end up being pie in the sky for a revenue stream now. The moral of the story is don't count on the government to do your saving for you. Save for yourself, invest wisely, and keep an eye on your investments.
You sound like a kool-aide drinker. I will admit that the banks have their brochures on line ...where people like you can google it!

You can ignore the recent melt down ...or like the right-wing did ...claim it happen all because of these poor people with power.... ... but I'm not with you.

We differ basically because of this .....unlike you ....I don't give a dam who's shoving the hot poker up my A$$!!
For me it hurts just the same ..... when the government ...or the corporations do it!!

You on the other hand scream bloody murder when its the government.....and when it's not ...you are trained to seek out some rationalization why it's OK ...and you grit your teeth and ..."take-it"!!!
 

jimbo

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that sounds a whole lot like Social Security to me.

Why would anyone invest in such a scheme?
If there are not enough fools that buy into the latest revenue generator, California will just make it mandatory. FDR sold the BS, and the American public still buys into it.

Ponzi schemes are not illegal. Just privately operated ones are,
 

greyhat

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...sorry ...next time I'll do what you do ...run to rush Limbaugh and shawn Hannity for ...LOGIC. :lamo
Ok genius, enlighten us how a 401k and investing works and why this setup is so horrible...
 

Dittohead not!

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If Lowdown is correct, then this is the biggest problem with the scheme:

The money collected for this from payroll will go straight into the general fund
Note: General fund, term used by politicians all over the globe to refer to an area from which nothing, not even money, can escape. See also: Black hole.
 

head of joaquin

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I don't know about your insightful retort, but did you really think that the money deposited in banks is just sitting in the vault? Of course they don't have enough cash on hand because it has been loaned out to others. Ponzi scheme? No.
So modern banking, the basis of modern advanced capitalist economies which maximized credit and hence business growth and prosperity, is a Ponzi Scheme?

Jesus.
 

JoeTheEconomist

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Oh brother, another Wall Street basher that doesn't have a remote clue on finance... :roll:

Just because you can type "401k" doesn't mean you know what one is...much less anything about WS to start your bashing session.
Oh brother, another Wall Street basher that doesn't have a remote clue on finance... :roll:

Just because you can type "401k" doesn't mean you know what one is...much less anything about WS to start your bashing session.
The case of MF Global justifies all of the bashing of WS. The fact that WS is quiet about should tell you that they don't much care about their reputation. If they were serious about integrity of the market, you would see all of the CEOs distance themselves from what happened at MF Global, and require that the Feds prosecute to the maximum. It is a simple answer, one on WS want DOJ to prosecute MF Global because you don't know where the questions end and you don't know how the line will be drawn.

Eric Holder vs. MF Global is the Case Everyone Should Be Talking About
 

greyhat

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The case of MF Global justifies all of the bashing of WS. The fact that WS is quiet about should tell you that they don't much care about their reputation. If they were serious about integrity of the market, you would see all of the CEOs distance themselves from what happened at MF Global, and require that the Feds prosecute to the maximum. It is a simple answer, one on WS want DOJ to prosecute MF Global because you don't know where the questions end and you don't know how the line will be drawn.

Eric Holder vs. MF Global is the Case Everyone Should Be Talking About
MF Global got in trouble for mismanaging risk & liquidity- how did that affect Main Street enough to warrant WS bashing??

At the end of the day most people misunderstand finance, economics and the role of Wall Street in the economy; many also are jealous of the high compensation and lifestyles of those in WS and attribute their financial success to fraud and gimmicks designed to pillage Main Street yet they ignore the hard work and hours it takes to make it in such fields.

Sure there are problems and issues that warrant reform and smarter regulation, yet painting WS with a broad brush is ignorant at best.
 

Neomalthusian

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So modern banking, the basis of modern advanced capitalist economies which maximized credit and hence business growth and prosperity, is a Ponzi Scheme?

Jesus.
Either you quoted the wrong guy or you're just echoing. That's what Ali was saying.
 

Neomalthusian

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If Lowdown is correct, then this is the biggest problem with the scheme:

Note: General fund, term used by politicians all over the globe to refer to an area from which nothing, not even money, can escape. See also: Black hole.
One theory regards taxation that goes into the general fund as the literal destruction of money. It doesn't pay for anything, it's just the act of eliminating money from the money supply. So a black hole is an appropriate metaphor.
 

JoeTheEconomist

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MF Global got in trouble for mismanaging risk & liquidity- how did that affect Main Street enough to warrant WS bashing??

At the end of the day most people misunderstand finance, economics and the role of Wall Street in the economy; many also are jealous of the high compensation and lifestyles of those in WS and attribute their financial success to fraud and gimmicks designed to pillage Main Street yet they ignore the hard work and hours it takes to make it in such fields.

Sure there are problems and issues that warrant reform and smarter regulation, yet painting WS with a broad brush is ignorant at best.
I am going to take a wild guess that you haven't looked into the case of MF Global.

Yes they mismanaged their liquidity, which was problematic by itself. MF Global went far beyound just 'mismanaging risk & liquidity' when they USED THEIR CLIENTS CAPITAL illegally in an attempt to cover-up their stupidity. Up until a month ago, you might have been just an apologist. Unfortunately in the meantime, the CTFC uncovered emails and recorded phone messages that showed that MF Global knew that it was illegally using it's clients money.

If Wall Street were such an honest place as you present, they would be the first to want MF Global prosecuted because MF Global's activities do not belong in the economy. They used client funds without content. They lost the money gambling. And the clients who weren't consulted aren't going to be made whole. How does that fit into the economy?

You really ought to look into the story before you try to include it in the broad brush line about WS. The Feds have them on tape planning the crime. They have them on emails and recorded phone lines acknowledging the crime. Then they have them on tape demonstrating that Congressional testimony was perjured.
 

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I am going to take a wild guess that you haven't looked into the case of MF Global.

Yes they mismanaged their liquidity, which was problematic by itself. MF Global went far beyound just 'mismanaging risk & liquidity' when they USED THEIR CLIENTS CAPITAL illegally in an attempt to cover-up their stupidity. Up until a month ago, you might have been just an apologist. Unfortunately in the meantime, the CTFC uncovered emails and recorded phone messages that showed that MF Global knew that it was illegally using it's clients money.

If Wall Street were such an honest place as you present, they would be the first to want MF Global prosecuted because MF Global's activities do not belong in the economy. They used client funds without content. They lost the money gambling. And the clients who weren't consulted aren't going to be made whole. How does that fit into the economy?

You really ought to look into the story before you try to include it in the broad brush line about WS. The Feds have them on tape planning the crime. They have them on emails and recorded phone lines acknowledging the crime. Then they have them on tape demonstrating that Congressional testimony was perjured.
I'm aware of the case; I wonder if you are as well informed as you claim to be. Tell me, who were MF'a clients, Ma & Pa? Or sophisticated institutional investors? I ask, not because it matters, their alleged activities are wrong regardless of who their clients were, yet I ask because often too many WS bashers take a story like this and make it out to be as if Main Street was the victim.
 

JoeTheEconomist

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I'm aware of the case; I wonder if you are as well informed as you claim to be. Tell me, who were MF'a clients, Ma & Pa? Or sophisticated institutional investors? I ask, not because it matters, their alleged activities are wrong regardless of who their clients were, yet I ask because often too many WS bashers take a story like this and make it out to be as if Main Street was the victim.
It specifically doesn't matter who the client was. They weren't consulted in the movement of their money. They will not be getting it back entirely either.

The subject here is not what other people are saying. In fact, I find very few people who are even aware what happened in the MF Global. Most people think it was just more of the same where clients acted on bad advice. If I were on Wall Street, I would want clear separation from these scumbags.

What is the point of having laws at all if they will not be enforced. We have MF Global on tape, planning to break the law. We have them on tape trying to deceive a partner bank into breaking the law. We have tape recordings showing that Corzine perjured himself when he said that MF Global did not borrow any client money - the tapes show that he devised the plan.

This isn't like the financial crisis where those who took in hundreds of millions in bonuses plead stupidity. The danger of 33 to 1 leverage can be explained in 4th grade math. So the people who claimed that they were worth hundreds of millions in bonus were really rejects from are you smarter than a 5th grader. Frankly I don't believe that they were that stupid, just well paid to put other people's money at risk.

For full disclosure, I happened to work in the risk management group of a major player in the credit card business in 2007. I tried to get the bank to sell off it's excess risk capacity to a hedge fund. This is risk that the bank didn't even want. My management to told me that what I was saying was reasonable but pointless. No one was going to tell our senior management that anyone could make money on risk where we couldn't.
 

AliHajiSheik

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So modern banking, the basis of modern advanced capitalist economies which maximized credit and hence business growth and prosperity, is a Ponzi Scheme?

Jesus.
Try retreading what I wrote. It is the OP who does not understand. It also isn't just modern banking but banking throughout the history of banking.
 
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