Re: how to compare living standards

On Wed, 8 Mar 2006 14:46:37 -0600, "Jim Blair" <jeb@xxxxxxxx> wrote:

"William F Hummel" <wfhummel@xxxxxxxxxxx> wrote in message

Jim, you are conflating financial savings and real savings.

Hi,

Aren't stocks and bonds "real"? Or are they just "financial"?

Bonds are simply claims on the future delivery of money. Stock
certificates are a claims on real property, but the monetary value
varies unpredictably. Unless you exchange the certificate for the
real property itself, you are dealing in a financial asset.

If the X corporation is "real", why would its stock not be?

As above.

....It is
easy to devise a system of retirement savings in terms of financial
wealth for everyone. But individuals need to save for retirement in
the equivalent of real wealth.

Is money saved/invested in an IRA "equivalent to real wealth"?

Generally no. A trust deed or a certificate of ownership such as a
car pink slip would be "equivalent to real wealth."

....Saving dollars or other purely
financial assets doesn't help for retirement if real economic growth
is not commensurate with the growth of the retired population.

I agree that an IRA will not be much good as a source of retirement income
if the companies in the mutual fund don't pay dividends and don't have their
stock prices appreciate.

But this is not a question of "how certain is the future of the Global
economy?". It is a matter of comparison. Which has the better prospects
for the future: A or B?
And I say the global economy is a better base for retirement income than the
wage base of American workers. That given the demographics of the US and
the world populations.

Yes, if "global economy" refers to capital goods, consumer goods, and
services.

And all of this is not the *real* question anyway, since Americans are now,
and will continue to, use income from both A and B for their retirement.
But now those who pay income taxes can (and do) deduct retirement money from
their IRS taxes. So why not let them also deduct money saved for retirement
from that OTHER income tax that applies to wages only, and which collects
relatively more from the lower incomes?

The important point is that saving dollars or other forms of financial
wealth does not provide for the future. Only real savings can do
that.

I say give low income workers the same tax break that the higher income
people now have.

Specifically what are you proposing?
.

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