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the point is that you've got choices in the private sector. if you don't want the private sector version of donald trump managing your money, then choose someon

the point is that you've got choices in the private sector. if you don't want the private sector version of donald trump managing your money, then choose someone else.

wwweston 9y ago
That's certainly a point among a number of others one could make, but it wasn't the point of the GP, which was that the risks involved with having the government manage anything are reasonably characterized by a Trump presidency. If Trump serves as a cautionary example of potential governance issues in the public sector, he serves better as a cautionary example of potential management issues in the private sector, given his long career there. There are better ones, of course. If we're picking tail events like Trump, one might just as well say the risks of having the private sector manage retirement funds are accurately characterized by the various market failures surrounding the 2008 crash (which were, however private, hard to avoid the effects of even with a surfeit of personal choice). On top of that, since you wanted to talk about personal choice... of course there's choice and accountability in public institutions, it just works differently: you have to select management cooperatively, and the collective decision might be different than your choice. That really has a fair bit in common with a number of private sector retirement vehicles (which are likely enough selected by your private employer), but there are others which are more individual and it's nice to be able to take your ball and go elsewhere. But even there, you don't necessarily get a clear signal when someone whose competence is as limited or anyone whose incentives are as misaligned with yours as Trump's are gets involved with your retirement fund's management. In fact, I'd go so far as to say in most cases you'd have less scrutiny and fewer journalistic resources to turn to in order to make that assessment than you would in the typical selection process for public office. Now what you often would have are claimed/recorded rates of return. But since we're thinking about that question, maybe we should talk about how a typical 401k compares to returns for Social Security: http://www.jameswrussell.com/?p=81 http://www.jameswrussell.com/?p=81
- Consultant32452 9y ago
  >Now what you often would have are claimed/recorded rates of return. But since we're thinking about that question, maybe we should talk about how a typical 401k compares to returns for Social Security: Social security is a regressive program that redistributes wealth from the poor to upper middle class. The poor tend not to go to college, so they start paying earlier. They also work hard labor so they die earlier, meaning they collect for fewer years. Want to know who lives a really long time? Upper middle class and upper class white women. Want to know who dies early? Poor black men. Yes, a person who lives to be 90 years old will do pretty well. But a person who lives to be 62 will have a -100% return on investment and have nothing to pass on to their children, harming the potential for the poor to create generational wealth.
  - wwweston 9y ago
    > The poor tend not to go to college, so they start paying earlier. They also work hard labor so they die earlier, meaning they collect for fewer years. Both of these issues would exist with any retirement vehicle, public or private, so singling out a public retirement vehicle for criticism doesn't make much sense. (The astute might even notice that singling out the problems in public institutions without considering their private analog was the same blind spot in your original comment.) That said, it is worth noting that as a flat tax (with a ceiling), FICA taxes are in fact a regressive tax scheme (as are sales taxes) -- something to keep in mind the next time flat taxes are floated as a good idea for income taxes in general. Whether that means the overall tax burden (vs program benefits) is regressive is less clear, given the somewhat progressive nature of the rest of the income tax structure. But I might well agree that problems with a public retirement vehicle would be worth addressing in public policy, so to the extent that it can be established that the overall burden is regressive, sure, I'd be supportive of changes that would make it more progressive. Maybe we could look at capital gains tax rates, which I'm sure you're also concerned about, given how important regressive redistribution is to you.
    - Consultant32452 9y ago
      >Both of these issues would exist with any retirement vehicle, public or private In a private system they have the capability of accumulating generational wealth. In the public system they do not. > sure, I'd be supportive of changes that would make it more progressive. Are you going to be supportive of the types of changes that would allow poor people to accumulate private wealth that they could pass onto their children so that their children are less likely to follow the same fate of hard labor and early death? Or is your goal to keep them under your thumb, poor, and beholden to the state? >Maybe we could look at capital gains tax rates, which I'm sure you're also concerned about, given how important regressive redistribution is to you. Short term capital gains tax rates are the same as income tax rates. You just don't pay FICA (SS, Medicare). My preference would be to remove the FICA from the rest of your income, bringing income taxes and capital gains taxes into parity. Long term capital gains are lower. I'm open to bringing that into parity with short term capital gains and regular income tax. The result of that would likely be more retail stock speculation by the relatively uneducated investor. But I'm not particularly concerned about that.
yongjik 9y ago
By the time you find out that your preferred choice of the private sector was another "Donald Trump," it's already too late. Your retirement money is gone.
- Consultant32452 9y ago
  The US has $60k in debt per citizen and $377k in unfunded liabilities per person. Your retirement is already gone. Money is fungible though, so they'll just keep taking more of your money out of your left pocket to put it back into your right pocket, with a little shaved off the top of course. Of course that really only works out for you if you happen to be a relatively wealthy white person. You see, the poor tend not to go to college so they pay into SS for longer. They also tend to die earlier so they don't collect for as many years. So the poor black person who dies in their early 60s gets a -100% return on their investment. But an upper middle class white person who lives to be 90 will do alright. Oh, and of course the poor black person was robbed of their potential to create generational wealth, further exacerbating that issue.

the point is that you've got choices in the private sector. if you don't want the private sector version of donald trump managing your money, then choose someone else.

wwweston 9y ago

That's certainly a point among a number of others one could make, but it wasn't the point of the GP, which was that the risks involved with having the government manage anything are reasonably characterized by a Trump presidency. If Trump serves as a cautionary example of potential governance issues in the public sector, he serves better as a cautionary example of potential management issues in the private sector, given his long career there. There are better ones, of course. If we're picking tail events like Trump, one might just as well say the risks of having the private sector manage retirement funds are accurately characterized by the various market failures surrounding the 2008 crash (which were, however private, hard to avoid the effects of even with a surfeit of personal choice). On top of that, since you wanted to talk about personal choice... of course there's choice and accountability in public institutions, it just works differently: you have to select management cooperatively, and the collective decision might be different than your choice. That really has a fair bit in common with a number of private sector retirement vehicles (which are likely enough selected by your private employer), but there are others which are more individual and it's nice to be able to take your ball and go elsewhere. But even there, you don't necessarily get a clear signal when someone whose competence is as limited or anyone whose incentives are as misaligned with yours as Trump's are gets involved with your retirement fund's management. In fact, I'd go so far as to say in most cases you'd have less scrutiny and fewer journalistic resources to turn to in order to make that assessment than you would in the typical selection process for public office. Now what you often would have are claimed/recorded rates of return. But since we're thinking about that question, maybe we should talk about how a typical 401k compares to returns for Social Security: http://www.jameswrussell.com/?p=81 http://www.jameswrussell.com/?p=81

Consultant32452 9y ago
>Now what you often would have are claimed/recorded rates of return. But since we're thinking about that question, maybe we should talk about how a typical 401k compares to returns for Social Security: Social security is a regressive program that redistributes wealth from the poor to upper middle class. The poor tend not to go to college, so they start paying earlier. They also work hard labor so they die earlier, meaning they collect for fewer years. Want to know who lives a really long time? Upper middle class and upper class white women. Want to know who dies early? Poor black men. Yes, a person who lives to be 90 years old will do pretty well. But a person who lives to be 62 will have a -100% return on investment and have nothing to pass on to their children, harming the potential for the poor to create generational wealth.
- wwweston 9y ago
  > The poor tend not to go to college, so they start paying earlier. They also work hard labor so they die earlier, meaning they collect for fewer years. Both of these issues would exist with any retirement vehicle, public or private, so singling out a public retirement vehicle for criticism doesn't make much sense. (The astute might even notice that singling out the problems in public institutions without considering their private analog was the same blind spot in your original comment.) That said, it is worth noting that as a flat tax (with a ceiling), FICA taxes are in fact a regressive tax scheme (as are sales taxes) -- something to keep in mind the next time flat taxes are floated as a good idea for income taxes in general. Whether that means the overall tax burden (vs program benefits) is regressive is less clear, given the somewhat progressive nature of the rest of the income tax structure. But I might well agree that problems with a public retirement vehicle would be worth addressing in public policy, so to the extent that it can be established that the overall burden is regressive, sure, I'd be supportive of changes that would make it more progressive. Maybe we could look at capital gains tax rates, which I'm sure you're also concerned about, given how important regressive redistribution is to you.
  - Consultant32452 9y ago
    >Both of these issues would exist with any retirement vehicle, public or private In a private system they have the capability of accumulating generational wealth. In the public system they do not. > sure, I'd be supportive of changes that would make it more progressive. Are you going to be supportive of the types of changes that would allow poor people to accumulate private wealth that they could pass onto their children so that their children are less likely to follow the same fate of hard labor and early death? Or is your goal to keep them under your thumb, poor, and beholden to the state? >Maybe we could look at capital gains tax rates, which I'm sure you're also concerned about, given how important regressive redistribution is to you. Short term capital gains tax rates are the same as income tax rates. You just don't pay FICA (SS, Medicare). My preference would be to remove the FICA from the rest of your income, bringing income taxes and capital gains taxes into parity. Long term capital gains are lower. I'm open to bringing that into parity with short term capital gains and regular income tax. The result of that would likely be more retail stock speculation by the relatively uneducated investor. But I'm not particularly concerned about that.

yongjik 9y ago

By the time you find out that your preferred choice of the private sector was another "Donald Trump," it's already too late. Your retirement money is gone.

Consultant32452 9y ago
The US has $60k in debt per citizen and $377k in unfunded liabilities per person. Your retirement is already gone. Money is fungible though, so they'll just keep taking more of your money out of your left pocket to put it back into your right pocket, with a little shaved off the top of course. Of course that really only works out for you if you happen to be a relatively wealthy white person. You see, the poor tend not to go to college so they pay into SS for longer. They also tend to die earlier so they don't collect for as many years. So the poor black person who dies in their early 60s gets a -100% return on their investment. But an upper middle class white person who lives to be 90 will do alright. Oh, and of course the poor black person was robbed of their potential to create generational wealth, further exacerbating that issue.