adrian is rad


In short: I talk about something I have passing knowledge of

Filed under: — adrian @ 10:46 am

So the state of the union deal was last night. Blah blah we all hate bushy yada yada.

He proposed a reform to Social Security. People are up in arms about it, of course. He outlined some apparent principles of this thing and I will regurgitate them from memory and add my thoughts:

  • can’t change the benefits for those who have retired or about to retire. yeah, okay.
  • any changes should be gradual so that people can have time to adjust. sounds reasonable.
  • the money will be yours and the government can never take it away. well, it’ll be in the government’s hands, which is not quite as good as in my pocket, but in principle it’s nice that some administration or congress can’t decide that it wants the money I’m about to retire on.
  • the money will grow faster in a private account. I remember back in economics class many years ago that the economy will do better in identical situations if people have their money than if the government taxes some of it then spends it/ redistributes it. I mean, the government basically wastes some of the money in overhead and things like that. It would seem to follow that the same would be true in private vs. goverment run retirement accounts. This says nothing about if it’s better for the rich or the poor or who ever; that’s another topic entirely.

Now, I don’t know the details of the plan itself, but it seems to me that if I get to choose where my withheld money goes and it’s stays mine, that’s almost as good as it being in my pocket and me getting to put it into my 401K or Roth IRA or whatever. Are mandatory withholdings good? In the end, probably yes. It would probably cost the taxpayers more to have retirees going onto welfare or other government programs because they didn’t save enough.

Again, I’m making assumptions. This time that the Social Security system needs to become zero-sum. I don’t think it can last with the young funding the old, etc.

I think basically most of this comes down to the thought that I’m doing reasonably financially and saving money under my own volition for the future because I want to and other people could be doing the same if they wanted to badly enough. I can make you a giant list of (non-MIT) people who are smarter than me, but I am here, at a job that I enjoy, making a reasonable wage, because I worked really freaking hard for the last ten years to the edge of insanity (literally) multiple times.

Or maybe I’m just trying to justify my way out of the guilt I feel for being in my situation. My head is starting to do this floaty/ detached thing, which means it’s time to stop now.

9 Responses to “In short: I talk about something I have passing knowledge of”

  1. andy (not andyl) Says:

    1. I don’t think SS is in as much of a crisis as it’s made out to be right now: The NY Times had a great article about a week ago that broke everything down. I’m waiting for something more in-depth from the Economist in the near future.

    2. I’d love for everybody to invest for themselves, rather than relying on a government plan. I mean, I’m certainly planning on investing as much as possible – I’d prefer not to rely on SS, and I also don’t really trust that it’s going to be there.

    Unfortunately, not everyone’s going to come out on top by investing their own money. And, some of us haven’t yet reached the point at which we can afford to spare enough money for a 401k or other IRAs. Some people never reach that point. I mean, that monthly payment into an IRA costs me a lot more now that it does someone who makes four times as much.

    So yeah. That’s enough. I don’t need to hear any more about this, I get to hear Rush yell about it for three hours every day…

  2. andy (not andyl) Says:

    Remember when I gave a talk in german class about Sozialsicherheit? You had the most disgusted look on your face!@@! GOP t-shirts, anyone?

    Those were the days.

  3. andy (not andyl) Says:

    Also: I think your default text box size for the comments should be larger, to accomodate better editing of long comments, such as that above.

    I’m just sayin.

  4. Adrian Says:

    I was all excited! 3 comments in like an hour! woo! I’m popular! oh wait, they’re all from Andy.

    Another point is that Social Security, unless you have a really low-cost of living isn’t going to cover it. There sould be like a campaign to let people know this. You hear that sort of stuff all the time: “I’m trying to live on $x a month from Social Security.” Really the only way Social Security would work to cover retirement (in a balanced system, that is) is if it was like a mandatory 10%-15% out of your paycheck and it had a pretty aggressive return.

    I don’t remember that look. And I didn’t wear GOP shirts in high school. That was Ft. Couch (middle school), big guy. Except I might have worn it junior year where I wore a different shirt all 182 days. That was impressive.

    (And then there was the other plan, for senior year, of wearing 91 different shirts the first semester and the wearing the same 91 in reverse order the second semester. I failed at that when I discovered I had repeated my Cape Town Olympic Candidate City 2004 shirt around day 81. Damnit!)

    I’ll see what I can do about the comment block.

  5. jesse Says:

    regarding social security, the notion that it is in trouble is ridiculous:

    not that I’m expressing an opinion on the matter.

    regarding this shirt business: you are crazy!! I have never heard about this before!! and you say that I have a lot of clothes!!@!@@!

  6. jonw Says:

    I put out my (lengthy) bias first:
    I am completely opposed to privatizing social security. Bush (and his ilk) hate it because its something that provides a basic, minimum standard of living to everyone. AND, it does that by investing (yes, spending, and yes, wasting some) that money in public programs like oh, building schools and roads, etc… Bush would prefer that, if anyone besides billionaires should want to save money, they should be investing in wall street firms, the firms that gentrify their neighborhoods, pollute their air, pay their executives millions and millions of dollars. (and sorry to get so editorial, but while thats all great, its ‘wasteful’ that civil servants might make a whopping $80K. after enron, worldcom, nyse, and other scandals, why is it still acceptable to call public programs wasteful? i can point you to a lot of retirees that will tell you what kind of return you get on that…)

    But, lets say you don’t buy into any of what I believe to be ultimately damning reasons not to privatize social security, I have just one question:

    How do you come up with the $2,000,000,000,000 (thats 2 trillion) that you need to keep social security funded through the time of transition to even partial privatization? (thats about the size of our entire budget)

  7. Dale Says:

    Adrian, I’m pretty sure I disagree with you here, but I think I need to learn
    more about the issue myself before I can make a statement.

    We both need to read more about what the opponents to this plan are saying.
    Your post reads like it was ghost-written by W himself.

    Here’s a thought: having a private account is all good when the economy is doing well, but what happens when and if we have another recession or depression? How does this differ from what social security guarantees?

    I certainly agree that the young-funding-the-old is unsustainable and we need
    to revise social security, but I’m not sure if this is the right approach.

  8. Adrian Says:

    Two people attack my position, one by saying that Social Security isn’t screwed and one by saying that Social Security is screwed. Interesting.

    Dale,your comment seemed like it was ghost written by an asshole. Did you even read my post? I wrote why I thought the principles of the plan were reasonable.

  9. Anonymous Says:

    No, I didn’t read your post… I only have passing knowledge of what
    it said

    What you thought? So this blog is all about you now?

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