McCain Supported Investing SS in the Stock Market

[waterboy]

Does he still support it? Fire at will.

From a readers post in the evil burgh of San Francisco but linked to a reputable source-

"Republican base: How would you like your social security to be in the stock market now? Here are the distinguished members of your government that voted to trust your retirement future to the Wall Street casino in March 2007:

Voted in favor of Social Security Privatization

Alexander, Lamar (R TN)
Allard, Wayne (R CO)
Bennett, Robert F. (R UT)
Bond, Christopher S. (R MO)
Brownback, Sam (R KS)
Bunning, Jim (R KY)
Burr, Richard (R NC)
Chambliss, Saxby (R GA)
Coburn, Tom (R OK)
Cochran, Thad (R MS)
Coleman, Norm (R MN)
Corker, Bob (R TN)
Cornyn, John (R TX)
Craig, Larry E. (R ID)
Crapo, Mike (R ID)
DeMint, Jim (R SC)
Dole, Elizabeth (R NC)
Domenici, Pete V. (R NM)
Ensign, John (R NV)
Enzi, Michael B. (R WY)
Graham, Lindsey (R SC)
Grassley, Chuck (R IA)
Gregg, Judd (R NH)
Hagel, Chuck (R NE)
Hatch, Orrin G. (R UT)
Hutchison, Kay Bailey (R TX)
Inhofe, James M. (R OK)
Isakson, Johnny (R GA)
Kyl, Jon (R AZ)
Lott, Trent (R MS)
Lugar, Richard G. (R IN)
Martinez, Mel (R FL)
McCaskill, Claire (D MO)
McConnell, Mitch (R KY)
Murkowski, Lisa (R AK)
Roberts, Pat (R KS)
Sessions, Jeff (R AL)
Shelby, Richard C. (R AL)
Specter, Arlen (R PA)
Stevens, Ted (R AK)
Sununu, John E. (R NH)
Thomas, Craig (R WY)
Thune, John (R SD)
Vitter, David (R LA)
Warner, John (R VA)

Not Present To Vote (and in the third case, not fit to lead):

Biden, Joseph R., Jr. (D DE) (NOTE: Joseph Biden voted AGAINST Social Security Privatization on a similar vote on March 16, 2006)
Johnson, Tim (D SD) (NOTE: Tim Johnson voted AGAINST Social Security Privatization on a similar vote on March 16, 2006)
McCain, John (R AZ) (NOTE: John McCain voted FOR Social Security Privatization on a similar vote on March 16, 2006)

The source for this is the US Congressional Record. This is the people's record of what their government does:

http://frwebgate.access.gpo.gov/cgi-bin/getpage.cgi?dbname=2007_record&page=S3561&position=all

and

http://frwebgate.access.gpo.gov/cgi-bin/getpage.cgi?dbname=2006_record&page=S2263&position=all

And, yes, Senator Obama did vote to protect Social Security in both 2006 and 2007."

[iplaw]

What's Social Security?

[waterboy]

Gee, you sound so much like McCain.

[Conan71]

I'm lukewarm on privatizing SS.  On the one hand, there are people competent enough to invest their own retirement and the trust fund is used as a veritable slush fund for other purposes.  There are others who don't have the knowledge or desire to manage it themselves.  There probably are people the gov't needs to protect in keeping it intact.

Congress fights any sort of revenue diversion from D.C.  I've never been totally clear if the GOP vote for privatizing was posturing, knowing it couldn't pass, or if they really thought they could do it.  

Social Security is also an example of the gov't thinking all people are too stupid to invest their own money for their retirement.  If someone wants to take the risk, I think they should be allowed to with the caveat that if they do, their eventual government benefits are lowered by a commensurate amount or they have none.

Either we can keep Social Security entirely intact and let it potentially keep adding to our deficit woes, or let individuals direct the investment of it for their retirement.   Privatizing would not have necessarily sent all this money down the toilet on Wall St.  Certainly not all of your 401K is invested in the stock market, is it?

[waterboy]

Its the assumptions we make Conan. People who smoke dope, think everyone does. People who understand the market and invest wisely, think everyone can. People with 401k's think everyone has them. Does anyone know the percentage of the working population invested in the market? Hopefully its quite small. One of the exacerbating problems of the 1929 crash was that so many people from farmers to executives had bought on margin that when it started to tumble it developed immense momentum.

I believe that if you step away from the forest you find most people live in the vast flatlands of ignorance. In reality, they aren't smart enough to do their own taxes, enter an expressway correctly or understand the issues of an election. I'm sure you would agree with that as you often refer to them as sheeple. But they think they're pretty smart because their egos work real well.

They'll invest the money, they'll lose it in cycles like this one and the government won't stand by and let them suffer because....they are sheeple and they vote. So, we'll pay for them one way or the other.

The other faulty assumption is that Social Security is failing. It is difficult to get straightforward answers about SS. As any exec will tell you, without accurate timely information, good decisions are improbable. The fund itself I understand is fine. It's the constant siphoning off of funds by Congress for other uses that is killing it.

My reason for starting this thread is to question McCain. Is he a maverick? Like the other 45 Senators who favored it? Does he support SS managed by individual investors now that the market shows signs of weakness stemming from a poorly regulated financial industry? Or will he change his viewpoint of governmental intervention as he has this week. When the savings of millions of American's under a privatized SS plan disappears, will he step in and say he's against bailing them out but he understands why it must be done?

I ask these questions in a reasonable, if admittedly partisan, manner. I honestly think with the current crisis they're worth asking.

[cannon_fodder]

Waterboy:

My Social Security is invested in the stock market and always will be.

I plan on getting ZERO from the Federal Government.  I pay in my 32.4% (16.2% of my wages and matching by my employer, which is really wages that would be paid my way but for the required tax).  I'll pay in far more than that when they freak out in a decade as if no one saw the shortfall coming.

But when I get to retirement age the system I paid into will be dead.  The money long spent.  The tax base of younger people to support my old butt too small.

Social Security as it currently stands is a pyramid scheme.  The "greatest generation" voted themselves a huge lottery ticket.  They paid in very little and collected TONS.  The boomers will basically do the same:  their out take from SS, medicare and/or medicaid will VASTLY exceed their contributions.  Add in the debt that has been accrued under their watch and the maintenance on it, and any and all of my tax money for my life is already spent.

So, from my perspective, my social security contributions losing 20% in the stock market would be better than the black hole of sending them to Washington.
- - -

Ignoring, of course, the fact that the stock market has an average return around 7% per year.  Investment savings being a long term venture 7% compounding would be acceptable. It will certainly have wild swings from time to time, but over the 50 year working career expect around 7%.

Under the current system you tender your money and it gets spent and borrowed against immediately.  Instead of a realized appreciation of 7%, we end up PAYING money for the debt accrued on the borrowing against future taxes.
- - -

And yes, Social Security is failing.  It is a very simple numbers game.  There will be more people drawing more money than the amount of people paying in.  WE can adjust it, but the consequences of that high of a tax burden in our system would not be good.

And I include medicaid and medicare in the equation.  Which, as it is currently designed is not going to survive.

Not a doom and gloom outlook, just that something needs to be done.  It won't be done until it's panic time because politicians are spineless self serving losers.  And, since old people vote (you bastards!), my generation will get stuck holding the bag.  

Hence, I'd rather go to the casino than trust my money to the government.

[guido911]

CF, Where have you been?

[bokworker]

There is not a financial advisor worth his/her salt that would tell you to have 100% of your retirement savings in bonds. While investing in equities does not guarantee success, investing in nothing but bonds does guarantee failure.

CF is spot on as far as the actual mathmatics of what the SS trust fund is and will become. My personal belief is that the fund will not go bankrupt per se but those that have made the sacrifice to save for retirement in addition to SS will be "means tested" out of any benefit from the program.

I will agree with assertions made regarding various levels of understanding but here is my biggest gripe about those that rail against a PARTIAL privitazation of SS.... it is MY money! It is not impossible to educate yourself to the point of a basic understanding of what a stock is and the risks inherent in them. While I am probably more educated than most, the reality is that the privitization plans that have been floated would only allow a small amount of MY money to be invested in stocks (10-20%) and my options would be limited to large index funds. No picking individual stocks. As CF correctly noted, over long periods of time, 5-30 years, the risk of equities (stocks) underperforming bonds is mitigated to a great degree. Not eliminated but mitigated....

Here is the other thing..... If you honestly believe that equities will not outperform government bonds over the next 20 years then what you are really saying is that you do not believe in our economic system. Equities are merely a reflection of the long term success of our economy. And guess what, if our economy is not successful then those promissory notes called dollars that are used to pay off those safe government bonds are not worth anything either. If you oppose partial privitization because you honestly think that stocks will become worthless then you better be buying canned goods and ammunition with your retirement dollars... canned goods to have something to eat and ammo to shoot those coming for your food... money will be worthless.

[waterboy]

quote:Originally posted by cannon_fodder

Waterboy:

My Social Security is invested in the stock market and always will be.

I plan on getting ZERO from the Federal Government.  I pay in my 32.4% (16.2% of my wages and matching by my employer, which is really wages that would be paid my way but for the required tax).  I'll pay in far more than that when they freak out in a decade as if no one saw the shortfall coming.

But when I get to retirement age the system I paid into will be dead.  The money long spent.  The tax base of younger people to support my old butt too small.

Social Security as it currently stands is a pyramid scheme.  The "greatest generation" voted themselves a huge lottery ticket.  They paid in very little and collected TONS.  The boomers will basically do the same:  their out take from SS, medicare and/or medicaid will VASTLY exceed their contributions.  Add in the debt that has been accrued under their watch and the maintenance on it, and any and all of my tax money for my life is already spent.

So, from my perspective, my social security contributions losing 20% in the stock market would be better than the black hole of sending them to Washington.
- - -

Ignoring, of course, the fact that the stock market has an average return around 7% per year.  Investment savings being a long term venture 7% compounding would be acceptable. It will certainly have wild swings from time to time, but over the 50 year working career expect around 7%.

Under the current system you tender your money and it gets spent and borrowed against immediately.  Instead of a realized appreciation of 7%, we end up PAYING money for the debt accrued on the borrowing against future taxes.
- - -

And yes, Social Security is failing.  It is a very simple numbers game.  There will be more people drawing more money than the amount of people paying in.  WE can adjust it, but the consequences of that high of a tax burden in our system would not be good.

And I include medicaid and medicare in the equation.  Which, as it is currently designed is not going to survive.

Not a doom and gloom outlook, just that something needs to be done.  It won't be done until it's panic time because politicians are spineless self serving losers.  And, since old people vote (you bastards!), my generation will get stuck holding the bag.  

Hence, I'd rather go to the casino than trust my money to the government.

CF, EVERY generation seems to be screwed by the previous one and eclipsed in importance by the newest one. I feel your pain brother! You guys are screwed.

My questions are pragmatic. We are not a society that will let our seniors walk the streets because they were poor managers of their estates. You are well educated and well employed yet if your investments tank at retirement time because of global warming ([]) won't you expect your government to do something to help? And as long as you're registered to vote, they will!  Even the people who boarded up their buildings and left before Ike hit, have some insurance against total loss either privately paid or tax paid. We pay for these catastrophes one way or the other, partly because it is a wise national investment to do so and partly because we are a spiritual people.

So if the populace mirrored your education and wealth, investing SS funds in the market would be wise. This populace couldn't correctly determine that ARM's in most cases were a risky way for them to finance their homes. What happens when they take that same intelligence to the stock market? If the average investor was reaching retirment age during the last few years under SS privatization and needed to cash out, he's screwed.

More directly to my intent of this topic- beware politicians of all stripes during a political cycle. McCain has exposed a weakness in his assertion that he is a non-regulation maverick who opposes government intervention in the free market.

For you hardliners....Please, Obama has weaknesses too which you folks graciously point out all the time. This is McCain's moment.[]

[Conan71]

quote:Originally posted by waterboy

Its the assumptions we make Conan. People who smoke dope, think everyone does. People who understand the market and invest wisely, think everyone can. People with 401k's think everyone has them. Does anyone know the percentage of the working population invested in the market? Hopefully its quite small. One of the exacerbating problems of the 1929 crash was that so many people from farmers to executives had bought on margin that when it started to tumble it developed immense momentum.

I believe that if you step away from the forest you find most people live in the vast flatlands of ignorance. In reality, they aren't smart enough to do their own taxes, enter an expressway correctly or understand the issues of an election. I'm sure you would agree with that as you often refer to them as sheeple. But they think they're pretty smart because their egos work real well.

They'll invest the money, they'll lose it in cycles like this one and the government won't stand by and let them suffer because....they are sheeple and they vote. So, we'll pay for them one way or the other.

The other faulty assumption is that Social Security is failing. It is difficult to get straightforward answers about SS. As any exec will tell you, without accurate timely information, good decisions are improbable. The fund itself I understand is fine. It's the constant siphoning off of funds by Congress for other uses that is killing it.

My reason for starting this thread is to question McCain. Is he a maverick? Like the other 45 Senators who favored it? Does he support SS managed by individual investors now that the market shows signs of weakness stemming from a poorly regulated financial industry? Or will he change his viewpoint of governmental intervention as he has this week. When the savings of millions of American's under a privatized SS plan disappears, will he step in and say he's against bailing them out but he understands why it must be done?

I ask these questions in a reasonable, if admittedly partisan, manner. I honestly think with the current crisis they're worth asking.

You say that as if there are people who DON'T smoke dope.

Long term, the market is safe.  The only people who lost money this week are those who panicked and sold out or who didn't have a diverse portfolio.  

As far as any shifting values, if I feel a politician is doing it out of being a populist, I'll call it out.  If it's come about from a cataclysmic or character-shaping event or even a gradual shift in values, I can accept that.  I'm sure Obama and McCain have had some genuine changes in belief and policy and I'm sure they've also made some promises they don't agree with but need to in order to be elected.

It's just hard to figure out what is genuine and what is not when someone aspires to have the most powerful job in the free world.

I know my general political leanings create more cynicism toward Obama on my part and less for McCain.  

To answer your question, I have not heard him make it a part of his platform this go 'round anyhow.

[Conan71]

I knew I had read, heard, or seen that this was not Bush's idea.  This had an interesting genesis from the "best 'Republican' President ever":

"A president decides that Social Security is in need of radical reform. He assembles a team of experts to examine the issue and they conclude that allowing workers to privately invest a portion of their Social Security taxes in individual accounts is a viable way to solve the program's financial problems, increase the rate of return to young workers, and allow low income workers to accumulate real wealth. They conclude that most criticism of individual accounts -- they would be too risky, too costly to administer -- is unfounded. The president leans toward quick implementation.

George Bush? No. Bill Clinton. So much for the myth that Social Security privatization is a "partisan" or "conservative" issue.

According to three former top administration officials, President Clinton was strongly considering the partial privatization of Social Security prior to his impeachment in 1999. The revelation was contained in a paper delivered by David Wilcox, an assistant treasury secretary, Douglas Elmendorf, a deputy assistant treasury secretary, and Jeffrey Liebman, an aide with the National Economic Council, at a Harvard University conference last month.

According to these officials, the Clinton administration spent nearly 18 months secretly studying issues surrounding individual accounts and concluded that:

Individual accounts were administratively feasible and would likely cost $20-30 per year per account to administer. However, to hold down costs, individual investment choices would have to be limited until accounts accumulated some level of minimum balance, perhaps $5,000.

Market risks were not a sufficient reason to oppose individual accounts. Administration analysts found that long-term investment was, in reality, relatively safe. The administration also noted that the current Social Security system contains political risks that may well be worse than market risks.

Concerns over redistribution could be addressed through the adjustment of benefit formulas, matching contributions or other means."

http://www.cato.org/pub_display.php?pub_id=3961

[cannon_fodder]

quote:Originally posted by guido911

CF, Where have you been?

New job.  Trial work.  I poke my head in now and then but do not have the time for monster posts anymore.  Well, not as often anyway.  

AND, I was at the TulsaNow Lunch yesterday.  Slackers.  []

OH, and I didn't lose money this week. I had a wad of cash saved for just such a downturn and have since thrown it into the breach.  For better or worse, we shall see.

[guido911]

quote:Originally posted by cannon_fodder

quote:Originally posted by guido911

CF, Where have you been?

New job.  Trial work.  I poke my head in now and then but do not have the time for monster posts anymore.  Well, not as often anyway.  

AND, I was at the TulsaNow Lunch yesterday.  Slackers.  []

OH, and I didn't lose money this week. I had a wad of cash saved for just such a downturn and have since thrown it into the breach.  For better or worse, we shall see.

At some point we lawyers in this forum are all going to have to come out of the shadows.

[cannon_fodder]

I'm not an attorney, I just play one on the internet.

[waterboy]

quote:Originally posted by Conan71

George Bush? No. Bill Clinton. So much for the myth that Social Security privatization is a "partisan" or "conservative" issue.


http://www.cato.org/pub_display.php?pub_id=3961

Yeah, I always figured Clinton was more likely to accomplish conservative proposals (welfare reform) just like Nixon was able to effect some rather liberal ideas for his time (rent controls). Too bad Clinton's opponents were after his hyde, he was doing their bidding in many respects. Mayor Taylor is similar.

I have no problem with the scenario that BOKWorker laid out or you described. Hedging our bets with a voluntary investment that didn't exceed 20% of the total would be a good start. If it were repackaged and re-introduced it would gain bi-partisan support. In fact, I believe this proposal goes back even farther, just can't remember who.