The Soapbox Papers

The Soapbox Papers is my two-cents worth.

My Photo
Name:
Location: Beloit, Wisconsin, United States

I am a cross between Tinkerbell and Calamity Jane.

Sunday, February 13, 2005

Privatization?

Ah, Social Security! It was created those years ago to assure those Americans who worked long and hard for years that, in their senior years, no matter what else they owned or didn't own, no matter where they lived and how close their families, those people would not be destitute. These people were assured that their senior years would be secure. Hence the name.

Who remembers when private retirement funds came to be, with their tax-deferred accounts, IRAs, 401Ks and their ilk for those fortunate enough to be able to start them and add to them on a regular basis? I don't recall exactly, but it was in the last 35 years or so. Many people signed up for these, figuring how much should be set aside of their income to accomplish the return at retirement they desired. This was done by projection - what income one could be expect from Social Security and other assets, what one felt one needed to live. The difference was the total a tax deferred retirement account should produce through its investments. The earlier this is begun, the sooner, thanks to compound interest.

Now on the surface this looks good. Except -- does anyone remember ENRON? Many retirement investment account portfolios contained this stock, and the value of the accounts that were heavily invested in this so-called "safe' investment made a huge nosedive.

Does anyone remember the market nosedive after 9/11? The stock market is too variable to invest so much of a person's future, even at its most calm. The world is a volatile place. I remember being told by a stock market professional that one must never invest more than one can afford to lose.

Wall Street is too easily influenced to be reliable for such important savings by everyday people who cannot afford to lose. I suppose it is different for Mr. Presidebt Bush and his cohorts, who have money invested in all sorts of things and who can afford to lose some here and there with Market fluctuations.

Fluctuations of the market and the insecurity of the Securities business are things that made Social Security a good idea in the first place.

I was reading random blogs the other day and came across one written by an 18 year old who didn't like the idea of Social Security in the first place. He was all for it not existing, mentioning someone he knew who worked at McDonald's and needed every cent he made to live on, day to day. This young man (who referred to his blog as "The Truth" (no doubt - as he saw it) lamented the Social Security deductions made in the young person's paycheck. But it is especially during this young age that deductions are most important, thanks to compound interest. This would be an ideal time for the young person to make some sort of investment so the interest begins to work for him at the earliest possible age. It it time high school math classes included information on savings, interest, compound interest - along with the simple things like budgeting. It should cover such things as necessities, as opposed to those things one wants. It should include comparing like costs - for instance, the cost of a night out for a celebration costing the same as, say, a week's worth of groceries, so young people learn how to make intelligent financial decisions. The real cost of credit should be taught; common sense money-handling. But I digress...

Presidebt Bush has asked for any and all suggestions. I have been listening for alternatives to his Privatization offered by any/everyone, and have never heard anyone suggest real estate. I think Real Estate is a viable alternative. To own one's home is a personal, real security that creates many benefits financially and socially. Stories one reads of the success of programs such as Habitat for Humanity stress that ownership of one's home creates better communities. Better communities maintain the value of the homes that make up those communities. Perhaps we should be looking at a more physical means of saving for one's retirement. Having a family home that one can live in - and leave to the next generation - is part of a very real"social security."

Just something to consider. There are many ways to implement family home ownership, and greater minds than mine need only be set into a conference room with one another to come up with a variety of programs that could be fine supplements to Social Security.

Incidentally -- anyone stop to think what the unemployment index is doing to Social Security? Just asking.

Any more like me?

Smokey

|

Links to this post:

<\$BlogItemBacklinkCreate\$>

<< Home