Re: Bush and O'Reilly, in denial.


"tonyp" <tonyp@xxxxxxxxxxxxx> wrote in message
news:cuadnRYn5cxdRAreRVn-tA@xxxxxxxxxx
>
> "Jim Blair" <jeb@xxxxxxxx> wrote
>
> > I say the higher your income the harder it is
> > to save 5% of it.
>
>
> You have an interesting definition of "hard" there, Jim.

Hi,

Yes, based on my own experience.
When my income increased by X%, my wifes spending increased by (X+e)% and my
saving rate declined by e% ;-(
>
> > Sure some investments do better than others. I claim that if people
stick
> > to broad based mutual funds, they are almost certain to do better than
> > Social Security during the next 20, 30, 40 or 50 years.
>
>
> How "broad based"? If some fund is based on anything narrower than the
> whole US economy, it _may_ be one of those which do better than "the
> economy" -- but it's just as likely to be one of those which do worse.

Sure, some broad mutual funds do better than others. But all of them are
likely to do better than money
"invested" in Social Security.

> Yeah, yeah, your hypothetical fund can be based on the "world economy".
But
> if you want to collect your returns from an investment in Pakistan, say,
you
> need either:
> 1) the good will of the Pakistanis to live up to their contractual
> commitments for the next "20 - 50 years"; or
> 2) a world government, with a court system you can sue in and a police
> agency that can enforce its judgements internationally; or
> 3) a scarier military than we now possess.
> I give Pakistan as the example because I don't imagine you're talking
about
> your "world" investments going into, say, France.

Mutual funds have an "international" sector. I haven't checked just which
countries mine are investing in, but China, Russia and India seem likely.
We could check the web pages of some big ones like TIAA/CREF, Fidelity, etc.
>
>
> > So why keep the FICA?
>
>
> Why indeed? I would happily endorse a system wherein _all_ income gets
> taxed, at rates which are progressive all the way up (say, to a top
marginal
> rate of 95% kicking in at about $100M/yr), and retirement benefits are
> means-tested -- and paid out of general revenues. Are you with me?

You would be denounced as wanting to kill Social Security and put the
elderly poor on welfare.
But I am with you except for that 95% tax on incomes. I say those with
high incomes should be paying the income tax rather than looking for ways to
avoid it.

>
> The CBO is hardly likely to "score" such a system for lil'ole us, but I
bet
> it would end up "revenue neutral" with considerably lower overall tax
rates
> for most people.

And that 95% rate would be a jobs program for tax lawyers and accountants.

>
> > Because more people would be putting money into investments
> > instead of into the US treasury. (If we privatize SS.)
>
>
> Jim, we both know that "putting money into investments" means, in real
> terms, buying things and hiring people. The US government buys things and
> hires people. But putting money into it is apparently _not_ an
investment,
> in your vocabulary.
>
> Well, I can agree with you to some extent: buying anti-anti-missile
> missiles and hiring people to man them does seem like a frivolous waste
> rather than an investment. But I can't agree with you all the way.
> Buying, say, college and graduate educations for young people, or
> pharmaceuticals and medical care for working people, can actually be a
very
> good investment, given that you get to tax their future earnings.
>
> We will never have a government wise enough to make _only_ good
investments.
> But we will never have mutual funds that can do so, either.
>
> -- TP
>

This gets to the core of our different views. I see private companies as
(overall) making better investments than the federal government.

Sure Ford built some Edsels. But when they didn't sell, they stopped
building them. When the Agriculture Dept paid farmers to grow huge
surpluses of grains during the 1950-60's, they built sheds to store the
extra, creating a "free lunch" program for rats and mice.

I agree the government does make some good investments (like the military
;-), but they also make a lot of bad ones.

When a company makes a bad decision, the incentives are to correct it. When
a government makes a bad decision it was usually in response to a special
interest that is then strengthed, and the incentive for elected officials is
then to add more to it. I bet that if the Edsel had been a government
project, when they didn't sell, they would have built garages all over the
country to store the surplus cars. By then both the factory workers making
them and construction companies making the garages would become lobbies to
continue the production of Edsels.



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jim blair (jeblair@xxxxxxxx) Madison Wisconsin USA.
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