"Goverment Motors"

[Selma in Sandy Eggo]

I have the document downloaded. I may read it. I'll read through the start of it, but I doubt it will say more than is encapsulated in the executive summary.

Full stop. Permit me a question.

Is this how you handle the rest of your retirement planning? Estate planning? Would you say this about a mortgage on your house?

What would your lawyer say? What would your mother say?

This sounds like the attitude that sweet, helpless orphan girls in Nigeria are fishing for. You know, the ones needing just a little help to get their fortunes away from the bad mans at the bank, that the unsuspecting recently deceased family left the family munnies with. Sonny, I have this fabulous bridge that goes to my personal private vacation island that my great-great-great bought from some unsuspecting indiginous sophonts for the equivalent of ninety-six bits worth of beadses, my precious, oh yes he did! Finding myself in need of some cash, quickly, I am willing to sell to you this gorgeous bridge for a remarkably reasonable price...

But I'm really in a hurry, just sign here, no need to read the contract, it's all "encapsulated in the executive summary". All those details would just confuse you...

[Shapley]

Selma,

Permit to explain:

OT is insisting that I read a document that is not the actual proposal of an outline of a plan that was offered by the President that was submitted, in revised form, by Congress and the Senate for consideration but not voted on four years ago, and which has been a non-issue since, so that I can debate this now-defunct horse over whether or not I will draw the same conclusions on his statements. Sorry if I find the exercise a little unnecessary.

Were this the actual proposal, and were it a current topic before the President, I would likely jump in and read it. As it stands, my jet-lagged mind has not been able to generate sufficient interest thus far.

Besides, I already own a bridge....

[OperaTenor]

Shapley, that's a load of crap. That is what GWB proposed.

I'm getting dizzy again.

[OperaTenor]

Shap, you haven't even opened the PDF, have you? It says, right on the cover page, "THE PRESIDENT'S COMMISSION TO STRENGTHEN SOCIAL SECURITY." Dated 2001. Who was president at the time?

Are you so afraid of having your hat handed to you that you feel the need to make stuff up?

[Shapley]

Well, thank you, I've now wasted a fair part of my morning reading through the thing. As expected, it does not in any way, shape, manner, or form, outline a method for 'inflating Wall Street with a steady stream of tax dollars'. In fact, it offers very little detail on the nature of the personnal accounts, instead focusing on how those accounts would be funded and how their funding a payouts would interact with the traditional Social Security System.

Model 1 offers a system of voluntary accounts that would exist more or less independently of the traditional system. Payments into and benefits received from the system would have no impact on Social Security as it exists.

Models 2 & 3 allow a percentage of Social Security witholding to be paid into the personal accounts. The amount of benefits paid from Social Security is reduced based on the benefits recieved from the personnal accounts.

The intent of all three models is to reduce the demand on Social Security by providing an alternative form of retirement income. The document notes that Social Security benefit growth will have to be reduced regardless of whether personal accounts exist or not. The intent is to soften the blow of these reductions by offering an additional line of income. While the document does not say so, it is generally thought that the designers of this type of system believe that, in the long-term, the personal accounts will replace Social Security completely for upper-income workers, leaving Social Security as the 'safety net' it was originally intended to be, and not the sole source of retirment income for most workers. I applaud that objective.

The document states that it does not deal with guarantees on the benefits received from the personal accounts, noting that Social Security itself does not guarantee any level of benefits. I have made this point in the past, but most people seem to believe that their Social Security payments are guaranteed to be there and guaranteed to grow in value. Not so, and I'm glad the document pointed that out.

Now, keep in mind, I only read the lines, not between them. I'm sure OT has been able to find the hidden meaning, sort of like playing Black Sabbath backwards at 78 RPMs to hear the words of the Devil. I can see now why he couldn't provide quotes to back up his assertion: there are none.

[OperaTenor]

Really? What does it say about the length of time before the trust fund runs out, given the switch to private accounts? How does that compare with leaving the status quo?

What does it say, specifically, about guarantees in the introduction, versus what it says in the section on guarantees?

What percentage of Social Security taxes would be invested on Wall Street?

Do you still assert that this was only going to affect 1-4% of monies going into SS?

[Shapley]

At one end of the administrative structure spectrum is the so-called "centralized" approach. Under this approach, payroll collections are transferred to a government-appointed central administrator using the existing Social Security payroll tax system. Workers have a choice among a limited number of lowcost, diversified investment indexed funds, like under the Thrift Savings Plan (TSP), which is a retirement plan for many federal and military workers. The central administrator keeps all records and invests worker contributions according to their preferences. These indexed funds purchase stocks in numerous companies and the amount invested in each company is proportional to the company’s value relative to that of other companies in the fund. Like TSP, a Governing Board contracts fund management to multiple private managers on a competitive basis.

The centralized approach is sensible to implement in the short term but is probably not the best
approach in the long run. The centralized approach does not incorporate the market discipline that
might be necessary to provide workers and retirees with good value and choices. Consumers who are unhappy with their fund manager could not "vote with their feet" by moving to another provider. Deregulation in the telephone industry and the airline industry provide ample evidence that consumers like choice even for relatively homogenous products and that choice generally leads to lower prices and better services. A "one-size-fits-all" approach, therefore, is not the best approach.

At the opposite end of the administrative spectrum is the "decentralized" approach. One version of this approach includes existing 401(k) programs that are offered by many large and medium-size employers. Under this approach, payroll collections are transferred directly from employers to private-sector investment funds that satisfy diversification and other requirements. Workers make investment choices through their employers, and workers can choose from a wide range of private-sector funds, switching funds if they so desire. The government must still interact with each fund and employer in order to enforce compliance.

The decentralized approach, though, faces its own problems. First, the cost of compliance would
increase for employers that do not currently offer 401(k) programs, including many small employers.

Even those companies that do offer 401(k) programs often use only one fund complex; in the decentralized approach, some workers might wish to invest in a fund from a different complex. To prevent compliance costs from increasing, employers must be allowed to continue to submit contributions through the existing payroll tax system, which requires some centralization.
Second, some standard fund must be available to those who do not make a selection. Third, close to 28 million Americans in the year 2000 had wages and salaries below $5000. Many of these people are students and teenagers who will earn larger incomes in the future, but even small transaction fees could be large relative to account balances for many people, an unacceptable outcome. While caps on transaction fees could be used to pool administrative costs across participants, such caps could also stifle innovation.

[Haggis@wk]

Senate keeps car sales stimulus in war bill


Another $1 Billion for the Automakers. Uh, guys, it's a war-funding bill, not a car-funding bill. Haven't we given them enough?

[OperaTenor]

Obviously not, here in the Corporate States of America, where you and I are serf-citizens.

Any company too big to fail should not exist.

[Shapley]

The companies that are "too big to fail" are failing. The reality is that they are too big to prevent from failing. Let them go. They have assets, they have value, let the market and bankruptcy sort that out instead of trying to preserve the rotting carcass. If we don't carve it up soon, rot will consume the good with the bad, and there'll be nothing of value left.

[analog]

from that quote posted 16 june:

Deregulation in the telephone industry and the airline industry provide ample evidence that consumers like choice even for relatively homogenous products and that choice generally leads to lower prices and better services.

Yea, sure......
the telephone has become an instrument of telemarketing torture and your next door neighbor likely has a different area code. My phone bill is a smorgasboard of taxing entities and one doesn't dare call directory assistance anymore.
Airlines can no longer afford maintenance because of the cutrate outfits that fly jalopies on the lucrative routes. And to get to a small city still costs a small fortune.

That's two industries I think provided far better service in the 60's.


that snippet of the document reads like a plan to nationalize everyone's retirement plan. Politicians are drawing lines around every remaining pool of cash, just like reptiles in a drying swamp.

a.

[OperaTenor]

Great post, A.

I agree.

[Haggis@wk]

I think some of the airlines are still operating in that 60's mode; Southwest is making money today even with the recession and rising oil prices. I don't want government regulation re-instituted in either industry. Even factoring in inflation travel was obscenely expensive when oil was less that $10 a barrel. Besides, do you think the government will stop at just re-regulation?? If the banking, mortgage, and big car makers are any indication I wouldn’t count on anything less that complete takeover ala GM.

Does anyone here genuinely believe that GM is going to make cars that people want to buy?

Nothing has changed in the way GM make cars. The unions haven't given up a penny in their dealing and no one will ask them to. One of the reason the Obama’s Administration is pushing so hard on health care is that the moment it is signed into law GM and most of the big companies in the U.S. will drop companied funded health care like a bad habit, allowing GM to get out from on that burden and leave more money in union coffers to perpetuate the Democrats in office.

[BigJon@Work]

GM actually makes a few nice cars and trucks. Nothing that would support a corporation greater than a 10th of its current size, though.

[Shapley]

Chinese Government May Block Chinese Firms Acquistion of 'Hummer' Brand

A confusing report. Apparently Chinese National Radio says the sale has been blocked, but the buyer says you can't put stock in everything Chinese National Radio says.

Is the Obama administration running things in China, too?

[jamiebk]

Chinese Government May Block Chinese Firms Acquistion of 'Hummer' Brand

A confusing report. Apparently Chinese National Radio says the sale has been blocked, but the buyer says you can't put stock in everything Chinese National Radio says.

Is the Obama administration running things in China, too?

Honest to god Shapley, is there ANYTHING you won't blame on Obama? The article clearly indicates that it is the Chinese who are blocking the sale because Hummers are one of the worst ecolologically friendly cars ever built. It violates THEIR (Chinese) country's planning agency's attempts to decrease pollution from Chinese manufacturers.

[Shapley]

I blamed nothing on Obama. I merely pointed out that the Chinese government appears to be as conflicted and confused as the Obama administration.

"The fact that it is from an article from a state media organisation does not mean it is government policy," the company said in a statement"

This sounds like it could easily be applied to statements coming out of Washington. You need only look at Mr. Obamas and Mr. Gibbs statements regarding the situation in Iran to understand that.

[OperaTenor]

Oh man, I'm dizzy....

[Shapley]

Oh man, I'm dizzy....

Perhaps you should lie down...

[Haggis@wk]

"We own the automobile companies. Why not?”

Sen. Tom Harkin said he wants Congress to use a climate bill to force auto companies to make new cars and trucks capable of running on 85 percent ethanol as well as conventional gasoline.

So much for not meddling in the private sector.