US national debt surpasses $13 trillion

[padren]

With regard to converting IRA and 401k programs to government annuities read the following.

 

http://www.nuwireinvestor.com/articles/proposed-regulation-could-require-401k-investment-in-government-annuities-54520.aspx

 

http://affiliate.kickapps.com/_OBAMA-DEMOCRATS-LOOK-AT-TAKEOVER-OF-401K-IRA-ACCOUNTS-TO-FINANCE-GOVERNMENT/blog/1716156/78592.html?null

 

http://moneymorning.com/2010/01/27/retirement-plans/

 

http://www.businessweek.com/investor/content/jan2010/pi2010018_130737.htm

 

http://pajamasmedia.com/blog/coming-soon-substituting-government-annuities-for-your-401k/

The businessweek article is readable, and the pajamasmedia one has some facts in it, I think that almost conveyed some information. The other articles were centered as "there are rumors that Obama is going to take everyone's money, here's a very long outrage piece on why, despite being sickening, it's logical if you are a stone cold thief."

 

From what I gathered, there is no actual plan to force any conversion on anyone, they are considering ways of making more stable investments popular. If I missed some little bit of information on some bill please do let me know. All I saw was people considering stopping the tax breaks for 401ks (I don't care if people get those, but I never understood rewarding risking your retirement savings with tax breaks. It's not exactly thievery thought.)

 

What did I miss?

A am making an argument about an individual’s right to their property. I’m not quite sure what ‘pool’ you are talking about but I’m sure I don’t want to be in it or pay for it. Why would I want to pay for something I get no benefit from?

Military for one, and of course the Justice system. Highway infrastructure, FDA is pretty important, CDC... all things you benefit from, unless you consider the things that set us apart from a 3rd world country non-beneficial.

 

Not paying what was promised eliminates debt. Stealing peoples savings can pay for debt. You need to come to understand that all these entitlement programs are simply Ponzi schemes.

 

Stealing people's savings and failing to pay entitlements solves nothing. So you pay your water bill by robbing your electric bill fund - then your pipes freeze and you're still screwed.

 

We have a consumer economy and without people spending, we don't have jobs, without savings to spend people don't. All your suggestions are tongue in cheek and don't actually solve anything.

 

I do agree that programs like SS are pretty much ponzi schemes, which is based on infinite growth to sustain itself. I don't think entitlement programs are by definition ponzi schemes though.

[waitforufo]

Let me put it this way. Say you have two people that grew up in typical middle class families in the same town at the same time. They both went to the same college and majored in the same subject. Up on graduation both got similar jobs making similar pay. Both have similar debt resulting from student loans. So both are typical young poor people.

 

Now one of those people aggressively pursues their carrier. This requires personal and family sacrifices such as moving around the country and time away from home due to business travel. This person is also rather frugal, always living below their means. They save money both inside and outside retirement savings accounts like 401k an IRA programs. This person is not a wizard of wall street, they just put their money in mutual funds and money market accounts. Also they don’t take extravagant vacations, or buy high end cars. Also they build equity through home ownership. They buy modest homes and never take out home equity loans. Eventually they pay off their mortgage.

 

The other person takes a different route. They play it low key at work because they don’t like too much work stress. They stay in the same town for much of their life. The do however like to take nice vacations, drive nice cars, and live to the fullest extent that credit will let them. They save no money and refinance their homes whenever their home goes up in value.

 

Now both of those people are living there own version of the American dream. They are indeed pursuing their own happiness. I wouldn't have it any other way.

 

So now our country can’t afford to pay off its entitlement debt. The first person is upset because he paid into the system with the promise of a payout. He paid for something that he thinks he now owns. He expects to receive it. But he has his own money so he will get by.

 

The second person more than upset. That person is desperate. His pursuit of happiness has left him lots of good memories but no wealth.

 

So now one of these people is rich and one is poor.

 

So explain to me how you are going to solve the entitlement problem without making the first person pay more or get less than the second person? If you can't do that explain how the oposite is fair?

[padren]

So now one of these people is rich and one is poor.

 

So explain to me how you are going to solve the entitlement problem without making the first person pay more or get less than the second person? If you can't do that explain how the oposite is fair?

 

Two people get hurt mountain biking. One was smart, wore a helmet, protective gear, and wasn't going ridiculously fast. The other had no helmet, no gear, and was flying along at speeds we call "break-neck" for a reason.

The person who has the helmet has a broken leg, cracked ribs and a possible concussion. The other guy has a cracked skull, broken jaw and internal bleeding.

 

When the ambulance gets there, who should they take first and who should wait for the next one?

The implosion of Social Security would (will) be a national disaster, having a huge impact on the country. The cold hard facts of the situation being that if we say "screw em" we screw ourselves. It's what we've been begrudgingly learning the last few years:

 

When our neighbors fail, it hurts us. We can all point at Wall Street laughing and call them idiots, but when they crash we crash. When we call BP idiots for failing to follow or even maintain their own safety equipment, it effects everyone. When 90% of the houses on your street go into foreclosure, it affects your home's value.

 

I think it's inevitable that Social Security will fail, but it's too big to fail outright - it needs a controlled fail. The whole phrase "too big to fail" has become synonymous with how failures of people and institutions who are not us can be so big they have a huge negative impact on us.

 

 

We all let this happen. We stood by while insane mortgage laws allowed insane situations to arise, we ignored the insane consumer debt culture on the basis that people are free to make smart or bad decisions as they please. That's not an all-together bad view either - I prefer it to meddling in everyone's affairs. However, there is a price to pay for that mentality. Either we support these people one way, or we will another - they are not likely to just die off amicably with the words "my bad" on their lips. We've already learned that in health care when "those dumb folk" who don't get health insurance end up at the ER sticking the hospitals with the bill - that those of us who pay the hospital end up picking up.

 

Whether the end result is less freedom by limiting some lending practices (that already make loan sharks blush) or we deal with the shared impact when a large percentage of our neighbors end up in dire straights... or we mitigate that shared impact in a way that costs us less - limited and entirely unfair support.

 

What's your preference?

[waitforufo]

What's your preference?

 

First, with regard to your analogy I don’t think it’s a fair comparison. I think a more accurate comparison would be if mister helmet wearing safety guy just happened to notice mister breakneck wiped out at the bottom of a gully. Since he’s the person who calls 911 he should be the person that should pay for the ambulance ride, surgeries, hospital care, rehabilitation, bike repairs, and a new helmet. Perhaps some physiological counseling just in case mister breakneck is now afraid to ride a bike. Oh yea, perhaps when the ambulance crew shows up they should work mister safety over a bit just to make sure he understands pain.

 

Second, I’m not sure why I should answer your question since you did not answer mine, but let me try anyway.

 

My preference would be to let people live with their choices. I’m a bit of a libertarian that way. The people that need protecting are the ones that made the correct choices, not the dead beats. If social security goes broke no one should get any money. If they need to scale back on payouts that should apply to everyone in an equal percentage regardless how small or how large their payout is. Those that get the bigger payouts paid in more and deserve them. It should matter if they are already sitting on a large pile of cash. If some people don’t have enough money for the bare essentials of life, well that’s what why we have welfare. While on welfare people should be constantly pushed into work.

 

With regard to shared impact, explain to me how those that made proper choices get to share in the big house that the poor chooses live in. How do they get to share in the BMWs the poor choosers drive. How do they share in the nice vacations the poor choosers took.

 

What you are suggesting is that we should all be poor choosers because the government will bail us out in the end. Well that’s why we have 13 trillion dollars of debt. There are only two ways to deal with that debt. Either you find the money or you don’t pay it. If you can’t see a money grab in that 401k to annuity conversion your blind. More likely you don’t have too much in a 401k or IRA so your more than happy if the government grabs somebody else’s money.

 

We all let this happen? Where was I when these decisions were being made? When did I encourage someone to buy a house they couldn’t afford, or take out a second mortgage so they could go on vacation or buy a BMW?

[john5746]

Define "actually create something"...

 

When Apple, which now has the #2 highest market cap in America, "creates" the iPad, and then sends its design off to Foxconn in China for production, who is doing the actual "creating", Apple or Foxconn?

 

If you ask me China is doing the brunt work, and Apple is doing the "actual creating"

 

In that regard, jobs that "actually create something" are some of the highest paid in America.

 

Menial labor, not so much...

 

I really meant "produce something". I'm not familiar with the details of the iPad, but if most of the production technology was developed in China and done by chinese, along with the production, then they are benefiting from it far more than the teenagers who play with them in America.

[bascule]

I really meant "produce something". I'm not familiar with the details of the iPad, but if most of the production technology was developed in China

 

Both the production processes and the IP of the ICs fabricated were developed in America...

 

then they are benefiting from it far more than the teenagers who play with them in America.

 

...Apple is now the third largest company in the world by market capitalization, FYI.

 

Meanwhile, Foxconn submits its employees to some rather inhumane conditions in order to produce devices like the iPad (and of course they contract to other companies besides Apple). That's how they make money... the human labor.

[Pangloss]

Rumor has it that Apple is subsidizing the wages of Foxconn employees (or is about to start doing so, depending on whom you ask). I don't know how significant this is but it sounds like a step in the right direction, but of course that only addresses one case (and only one aspect of it) and not the issue as a whole.

 

Couple articles:

 

http://www.appleinsider.com/articles/10/06/01/apple_rumored_to_directly_provide_raises_to_foxconn_employees.html

http://online.wsj.com/article/SB10001424052748704875604575280090235346472.html?mod=WSJ_Opinion_LEFTTopBucket

[Double K]

Simple fact is that the best thing America is good at, is exporting inflation to the rest of the world.

 

All that is happenning continually is the printing of more money and the dilution of the money supply which everyone else is vested into.

 

America is in dire straights with it's national debt, 13 trillion is unserviceable.

Well, not entirely, if America stopped it's warmongering it could save a significant amount just on military budget, however thats a catch 22 as their warmongering has also earned them money through arms sales, and the cleanup contracts for Iraq which went to vested american interests also.

 

Honestly I don't see americans getting out of this debt as it's gone so far now it's a vicious cycle. The sub prime mortgage crisis is a perfect example of how the American economy globally affects other economies.

[john5746]

Both the production processes and the IP of the ICs fabricated were developed in America...

 

...Apple is now the third largest company in the world by market capitalization, FYI.

 

Meanwhile, Foxconn submits its employees to some rather inhumane conditions in order to produce devices like the iPad (and of course they contract to other companies besides Apple). That's how they make money... the human labor.

 

So, fewer and fewer american labor is demanded for the production of goods. This labor would include high tech assembly, engineering, mechanics, equipment manufacturing, etc. This will increase the gap between the haves and have nots. Those that have the good designing jobs, those that own stock and those that work at Wal-mart, because all the production is done in China.

 

 

America is in dire straights with it's national debt, 13 trillion is unserviceable.

Well, not entirely, if America stopped it's warmongering it could save a significant amount just on military budget, however thats a catch 22 as their warmongering has also earned them money through arms sales, and the cleanup contracts for Iraq which went to vested american interests also.

 

Unfortunately, as America's power shrinks, the despots will begin to rise and take what they can get. Many countries get a free ride from Big brother's arm.

[Pangloss]

I think waning American military power, and even an end to "exported warmongering", would be very much a double-edged sword for the rest of the world. The world should be more careful what it wishes for, IMO.

[Mr Skeptic]

perhaps we(as a species) should switch to an energy based economy rather than some fictional number that we have now. we are obviously not responsible enough to deal with money as an abstract.

 

Of course some of us would just trade in energy futures. Also, coal mines would become gold mines. Really, I think the energy cost of stuff is generally far lower than all the other costs.

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I think the best solution is to slash military and entitlement spending such as Social Security. Instead of giving people with no jobs boatloads of cash, the government should focus on helping them find a job quickly. Also, the age of retirement needs to return to reality; and to avoid the same mistake they should define it clinically rather than at any particular age.

 

Of course, we could also ignore the problem and let the market solve it. Eventually the government will have to start printing money, everyone who has dollars will hate us, massive inflation, people who use dollars as a stable storage of value will sell them causing even more inflation. Eventually, we will be poor and then China will pay us to do the work no they don't want to do, and our exports will finally surpass our imports. Problem solved.