Investing Thread

[MU82]

82

Of course there will likely be more up than down years. Only pointing out the last two years pretty balanced out to two average years if you were fully vested for those 24 months.

What is your quick fix for social security?

I don’t know about quick fix, but there are just more options for SS.

You can raise the full retirement age by a year, raise the early retirement age by a year, raise the amount that can be taxed, create a “donut hole” where you apply the tax for those making something like $500k, do some minor means testing, etc.

Nothing will be pain-free, but it’s not hopeless. When I said “relatively easy,” I was talking about compared to Medicare.

The whole “Social Security is going bankrupt” thing that some like to claim is dopey, too. Worst-case scenario, if nothing is done, those expecting say $2500 would get only $1800 or so. That would suck and hurt a lot of people, but $1800 is still a lot better than $0.00 - which is what “bankrupt” implies.

[Goose]

82

My bad, you said relativity easy, not quick fix.

My guess is that those getting $2500 a month are not the folks that will be taking a haircut.

Why do you think SS and Medicare got into this situation? Do you think they make the relatively easy fix, kick the can down the road or protect those who need to be protected?

[tower912]

It got like this because it has been kicked down the road for generations.

[reinko]

It got like this because it has been kicked down the road for generations.

Not too mention the guy/gal making 160K a year as an engineer, maybe financial advisor, lawyer pays the same amount of SS tax as LeBron James does.

[Goose]

Reinko

Will LeBron get a bigger SS check then the engineer?

[reinko]

Reinko

Will LeBron get a bigger SS check then the engineer?

He won’t, life isn’t fair, and his entire family for generations will probably never need the money from his SS. 

Use the money (as one of the levers including looking at the retirement age) to help make the system solvent for future generations.

[tower912]

Yup.  Raise the threshold and means test.

[The Hippie Satan of Hyperbole]

Reinko

Will LeBron get a bigger SS check then the engineer?

No. Is that a problem? You were complaining about the income disparity in the country earlier.

[Goose]

Sultan

No shxt he is not getting a bigger SS check, that was my point. Why would he pay more to get the same check as the engineer? Where did I complain about income disparity? I commented that their is a growing divide in economic classes, but I have never complained about income disparity in my life.

[jesmu84]

Yup.  Raise the threshold and means test.

Disagree.

Stop means testing anything. Make every program universal. Remove the absurd bureaucracy and inefficiencies.

Increase taxes. But don't make benefits harder to receive.

[The Hippie Satan of Hyperbole]

Sultan

No shxt he is not getting a bigger SS check, that was my point. Why would he pay more to get the same check as the engineer? Where did I complain about income disparity? I commented that their is a growing divide in economic classes, but I have never complained about income disparity in my life.

lol. Ok. How do think growing divides are created?  How do you think they are fixed?

[MU82]

82

My bad, you said relativity easy, not quick fix.

My guess is that those getting $2500 a month are not the folks that will be taking a haircut.

Why do you think SS and Medicare got into this situation? Do you think they make the relatively easy fix, kick the can down the road or protect those who need to be protected?

Generations of politicians, regardless of party, who would rather get re-elected than make tough decisions. What else is new?

Yes, I think they will make the relatively easy fix. The political price of not doing that would be too high.

Most of those who need to be "protected" will be, I think. Of course, everybody has a different definition of who needs to be "protected."

I do wish there were a Social Security thread and/or an economy thread. Because none of this has anything to do with investing, at least not the way we're all discussing it.

Now, doubts about the viability of Social Security in X number of years could change the way some people invest, especially those younger than 50 years old. But nobody's talking about that. I personally think Social Security will still be available decades from now and that Medicare will be the bigger issue, but I fully admit I could be wrong.

And no, I don't know enough about the options to have a clue how to fix Medicare.

[Goose]

Sultan

Laugh all you want. Take the top 1-3% of earners out of the mix and I doubt the divide of remaining population is a bigger divide than 25 years ago. I think government printing money, low interest rates and other factors has caused a bigger divide in the classes.

Has the majority of the population had a disproportionate change in wages over past 25 years? I would argue the lowest paying jobs have seen a far bigger increase than mid to higher paying jobs.

If you read my posts on the topic, I have been consistent in saying I am old school in regards to the economy and I am outdated. That said, I do not think income disparity for 95+% of the population has caused the divide. For the record, I could be wrong that the divide is bigger and I have misjudged things.

I have no idea what an average 25-30y college grad makes, but I assume they make a fair wage. Unfortunately, it sure seems like they have a hard time saving to buy a house. Looking at housing in the area where we bought our first home, pricing is up 60% over past 4-5 years. How did that happen?

[The Hippie Satan of Hyperbole]

Sultan

Laugh all you want. Take the top 1-3% of earners out of the mix and I doubt the divide of remaining population is a bigger divide than 25 years ago. I think government printing money, low interest rates and other factors has caused a bigger divide in the classes.

Has the majority of the population had a disproportionate change in wages over past 25 years? I would argue the lowest paying jobs have seen a far bigger increase than mid to higher paying jobs.

Nope. Recently income has been increasing for everyone, but it is increasing the most at the highest levels.

https://apnews.com/article/economy-wealth-inequality-income-consumers-d1ece7c344fbf96f93264172ef8d9394#

“The Fed’s survey found that even as wealth inequality declined, income disparities worsened. Median incomes grew 3% compared with the previous survey, which covered 2017 through 2019. But average incomes, which are swollen by the earnings of the wealthiest one-tenth of households, jumped 15%. The outsize gain among the richest households was driven by profits on stock and property holdings as well as higher wages.”

[SoCalEagle]

82

My bad, you said relativity easy, not quick fix.

My guess is that those getting $2500 a month are not the folks that will be taking a haircut.

Why do you think SS and Medicare got into this situation? Do you think they make the relatively easy fix, kick the can down the road or protect those who need to be protected?

The Democrats have made multiple proposals to fix entitlements, the most noteworthy being the Grand Bargain of 2011.  Obama angered a lot of the Dems on the far left when he agreed to reduce benefits, but he felt that a fix was needed.  He pushed hard for it and it was passed in the Senate.  Unfortunately, the hard right scuttled the deal because it included additional taxes.  So when you hear comments like "both sides are just kicking the can down the road," don't believe it.  One side (the Republicans) won't compromise (i.e not one more dollar of taxes earmarked for entitlements) so we continue to fight about something that could have been solved years ago. 

[MU82]

The Democrats have made multiple proposals to fix entitlements, the most noteworthy being the Grand Bargain of 2011.  Obama angered a lot of the Dems on the far left when he agreed to reduce benefits, but he felt that a fix was needed.  He pushed hard for it and it was passed in the Senate.  Unfortunately, the hard right scuttled the deal because it included additional taxes.  So when you hear comments like "both sides are just kicking the can down the road," don't believe it.  One side (the Republicans) won't compromise (i.e not one more dollar of taxes earmarked for entitlements) so we continue to fight about something that could have been solved years ago.

Although I agree your general thesis, there also have been Republicans who pushed for changes, some pretty aggressive changes. Paul Ryan, when a VP candidate and speaker, for one. Chris Christie for another.

[SoCalEagle]

Yup.  Raise the threshold and means test.

Why would you means test?  Those who contribute the most to Social Security and Medicare already get the least out of these systems.  These programs are a much better deal for those who contribute less.  The more you put into Social Security the less you get out of it on a percentage basis.  In a way, these systems are already means tested. 

[SoCalEagle]

Although I agree your general thesis, there also have been Republicans who pushed for changes, some pretty aggressive changes. Paul Ryan, when a VP candidate and speaker, for one. Chris Christie for another.

Paul Ryan has pushed for cuts to entitlements, no doubt.  However, I don't recall that he was pushing for a compromise, i.e. tax increases to go along with the cuts to entitlements.  I agree that many Republicans "push for changes," but I don't think there are many, if any, (outside outhouse who negotiated the Grand Bargain) who are on record with support for a compromise (tax increases as part of an entitlements reform package).  In fact, I can't name a current Republican who advocates for this approach. Maybe I'm wrong?

[MU82]

Paul Ryan has pushed for cuts to entitlements, no doubt.  However, I don't recall that he was pushing for a compromise, i.e. tax increases to go along with the cuts to entitlements.  I agree that many Republicans "push for changes," but I don't think there are many, if any, (outside outhouse who negotiated the Grand Bargain) who are on record with support for a compromise (tax increases as part of an entitlements reform package).  In fact, I can't name a current Republican who advocates for this approach. Maybe I'm wrong?

I don't follow these political discussions closely enough to know if you are right or wrong.

[Goose]

82

Do you think the fed has intentionally propped up the stock market over the past three years? If so, why did they do it?

[MU82]

82

Do you think the fed has intentionally propped up the stock market over the past three years? If so, why did they do it?

Actually, one could argue the opposite - that by raising rates throughout 2022, the Fed almost certainly adversely affected the stock market that year.

A few years earlier, as Powell got relentlessly badgered by a president who called him the "enemy" of the American people, the Fed unnecessarily and unwisely lowered rates despite the economy being healthy. The then-president got the market rally he wanted.

[SoCalEagle]

Actually, one could argue the opposite - that by raising rates throughout 2022, the Fed almost certainly adversely affected the stock market that year.

A few years earlier, as Powell got relentlessly badgered by a president who called him the "enemy" of the American people, the Fed unnecessarily and unwisely lowered rates despite the economy being healthy. The then-president got the market rally he wanted.

This was absolutely the wrong approach.  So glad Biden lets the experts do what is needed.  Seems to be working well. 

[Goose]

82

So, you do not think the Fed has intentionally propped up the stock market over the past three years?

Not exactly sure what the previous President had to do with the question, but I am sure it makes sense in your mind. Since you brought 2020 up, do you think the rally in 2020 was Fed driven? IMO, that rally exemplified Sultan’s original post a few days ago in the topic.

The government and/or Fed does not have the stomach to let the markets and economy function on their own during tough times.

[TSmith34, Inc.]

82

So, you do not think the Fed has intentionally propped up the stock market over the past three years?

The Fed raised rates 11 times. In what world is that construed as propping up the stock market?

Not exactly sure what the previous President had to do with the question, but I am sure it makes sense in your mind. Since you brought 2020 up, do you think the rally in 2020 was Fed driven? IMO, that rally exemplified Sultan’s original post a few days ago in the topic.

Of course you know what that has to do with the question.

[Goose]

TSmith

The Fed raised rates 11 times because they had an overheated economy, mainly because of a very inflated stock market and real estate market. I am open to any comments on why those two assets had historic growth in value other than Fed printing money and QE. I might 100% wrong and would welcome reasons why 2020-2021 happened in those two markets.

As for Trump, my question was the previous three years, not prior to that. That said, I thought Trump was off his rocker wanting lower rates and how he treated Powell and I don't like Powell.