The Broken Social Compact

[Captain_America]

• The job market is volatile and unpredictable.
  • One-third of Americans have no retirement savings.
  • Retirement plan and individual retirement account values are down.
  • Home prices have declined, meaning less equity to draw on in retirement.
  • Health care costs outpace the rate of inflation.
  • Defined benefit pension plans are a thing of the past with most employers.
  • Lawmakers are looking at ways to reduce Social Security and Medicare costs by increasing the minimum retirement age or reducing benefits.

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The above summary’s from a news item. Much has changed since 1980, eh?

 

[Rence]

And yet, it’s near impossible for me to find a caregiver to come watch my mom while I work…because the responsible people already have full time jobs, and the rest are too comfortable taking food stamps, WIC and stipends and ‘don wanna’.

It’s disheartening to see that of a list of 10 people I can call, only one person is willing to work, and usually has to leave on time because she has to get to her second job

And yet, at work, where people are actually getting perks I can’t afford to give my caregivers, coworkers earning premium pay and getting insurance are calling in sick, not showing up, coming in late, and basically burdening their co-workers making it miserable without a second thought…

 

[virtueseeking]

Much has changed since 1980, eh?

Not God. Maybe that’s where we should be putting our investments, loyalty, trust, and faith.

 

[edwest2]

• The job market is volatile and unpredictable.
  • One-third of Americans have no retirement savings.
  • Retirement plan and individual retirement account values are down.
  • Home prices have declined, meaning less equity to draw on in retirement.
  • Health care costs outpace the rate of inflation.
  • Defined benefit pension plans are a thing of the past with most employers.
  • Lawmakers are looking at ways to reduce Social Security and Medicare costs by increasing the minimum retirement age or reducing benefits.

---

The above summary’s from a news item. Much has changed since 1980, eh?

Let’s look at the causes. Number one: greed.

Underfunded pension plans. Why?

wgrz.com/news/national/article/119830/2/Underfunded-Pension-Plans-Force-Tough-Choices-for-Cities-States

How about Wall Street and lenders providing home loans to people who could barely pay their regular bills?

sec.gov/news/press/2010/2010-59.htm

How many time have Washington politicians dipped into Social Security with only a promise to put the money back later?

mlive.com/opinion/kalamazoo/index.ssf/2011/10/social_security_-_whats_wrong.html

Of course, home prices have declined. Wall Street saw it coming.

topics.nytimes.com/top/reference/timestopics/subjects/f/foreclosures/index.html

So, guess what? Construction workers aren’t seeing many job opportunities. I mean, why build new homes when people with money can buy old homes cheap and people without are forced to sell for less than what they paid and are forced into apartments?

Peace,
Ed

 

[sedonaman]

Let’s look at the causes. Number one: -]greed/-]

Envy. People let themselves be distracted by politicians promising re-distribution of wealth.

Underfunded pension plans. Why?

Government inflates the money supply so that a dollar contributed in 1960 is worth only about 14 cents today measuringworth.com/uscompare.

How about Wall Street and lenders providing home loans to people who could barely pay their regular bills?

How about government bureaucrats forcing banks to make risky loans that they wouldn’t ordinary make? [See envy above.] To be fair to home buyers who lost, they were acting rationally, given the state of the housing market. They figured that if they later couldn’t make the payments that they would just sell at a much higher price and pocket their profit.
investors.com/NewsAndAnalysis/Article.aspx?id=461660

How many time have Washington politicians dipped into Social Security with only a promise to put the money back later?

Every year since 1938? People believed them and kept voting for them because they spent the money in their home districts. Voters can see a new highway being built, but when was the last time you saw a statement of the current value of your SS benefits?

The government has to do something with the excess contributions, and it is required by law to invest them into government bonds. The money then goes into the general fund where it can be spent for anything they deem worthy. The only other option is to convert the money to greenbacks and store it in a vault somewhere. Investing in the private markets was ruled out because it would give government control of same.

The link states, “Security Income (SSI) was created which entitled the disabled poor regardless of work history.” While it doesn’t say so explicitly, it strongly implies that SS funds pay for SSI. This is not true. It is funded out of the general fund; it is only administered by the SSA. ssa.gov/ssi/

Of course, home prices have declined. Wall Street saw it coming.

Well, this is interesting. If it is true, there must have been some savvy Wall Street investors who were part of the group who “saw it coming” and shorted housing. Are there? Can you quote the paragraph that state that “Wall Street saw it coming”?

So, guess what? Construction workers aren’t seeing many job opportunities. I mean, why build new homes when people with money can buy old homes cheap and people without are forced to sell for less than what they paid and are forced into apartments?

Can the economy keep building houses ad infinitum, even under normal conditions?

 

[FaithBuild18]

Not God. Maybe that’s where we should be putting our investments, loyalty, trust, and faith.

This.

You know, quite honestly, I think if you could clean up the culture of America, the economy would take care of itself. Irresponsibility, greed, whatever you think is the root problem, would not exist if we had a tad more of a conscience.

 

[timotheos]

This.

You know, quite honestly, I think if you could clean up the culture of America, the economy would take care of itself. Irresponsibility, greed, whatever you think is the root problem, would not exist if we had a tad more of a conscience.

But it also might be too little, too late. Missing from the list is the escalating US and individual state debt, that threatens the very stability and viability of the US currency itself. The responsible savers and irresponsible spenders may well all go down the same drain. But faith and trust in God remain free commodities, regardless of what will happen. Best to stock up on those.

 

[Captain_America]

This.

You know, quite honestly, I think if you could clean up the culture of America, the economy would take care of itself. Irresponsibility, greed, whatever you think is the root problem, would not exist if we had a tad more of a conscience.

This is a most interesting point.

There’s much to be said for it.

But I wonder whether we have such a hierarchy of powerful elites that it might be difficult to shift direction. . . our elites are rootless, nationless, merely self-interested.

Still, perhaps in the long run a change in value orientations might effect wonders.

 

[Darkbloom]

Sedonaman, you’ve summed it up.

I would only add that we have come to rely on Social Security, Medicaid, etc, which leads to at least three problems:

1. Lack of market discipline. Social Security is a Ponzi scheme that no sensible person would be a part of. But you have no choice except participation. Hence, you’re forced to perpetuate generational fraud AND you’re deprived of your own money, which would could be invested at roulette table with about as much success as Social Security.
2. Breakdown of families. Time was, it was the norm for multiple generations to live in the same home. One generation had an obligation to not only raise their own children, but also to care for those who raised them. That has been abolished, with terrible results.
3. Self reliance being excluded from the narrative. The vast majority of people have been so indoctrinated that the Nanny State has become sacrosanct. Paul Ryan was all but exiled from public life for suggesting changes to Social Security and Medicare that didn’t abolish the programs, but merely pushed back the date when they will go bankrupt. Anyone who says we should do away with these programs, which are less than 100 years old, is excluded from high office de facto.

 

[seekerz]

Sedonaman, you’ve summed it up.

I would only add that we have come to rely on Social Security, Medicaid, etc, which leads to at least three problems:

1. Lack of market discipline. Social Security is a Ponzi scheme that no sensible person would be a part of. But you have no choice except participation. Hence, you’re forced to perpetuate generational fraud AND you’re deprived of your own money, which would could be invested at roulette table with about as much success as Social Security.
2. Breakdown of families. Time was, it was the norm for multiple generations to live in the same home. One generation had an obligation to not only raise their own children, but also to care for those who raised them. That has been abolished, with terrible results.
3. Self reliance being excluded from the narrative. The vast majority of people have been so indoctrinated that the Nanny State has become sacrosanct. Paul Ryan was all but exiled from public life for suggesting changes to Social Security and Medicare that didn’t abolish the programs, but merely pushed back the date when they will go bankrupt. Anyone who says we should do away with these programs, which are less than 100 years old, is excluded from high office de facto.

It’s really interesting to see your comment on breakdown of families, because so often all that means for some is any family which does not consist of two parents and their children. The elderly never seem to get mentioned. I grew up in one of these multi-generational homes and seeing/helping adults care for the elderly as well as for babies/infants was the norm for me. As a result, I have no trouble valuing life at either extreme of age and things like adult diapers or breastfeeding are a normal part of life, not some great big deal to be intimidated by. Thanks for highlighting something which is too often overlooked: family is about caring for and learning from multiple generations - not simply about chasing a particular ‘perfect’ picture.