1. Introduction - The Addams Family and Paris Hilton
Economist: McDonald's looks is certainly in the middle of nowhere.
Cowboy: "President Bush is having a town hall meeting in the privatization of social security. Supporters and protesters are here.
Economist: He gave me some brochures on the privatization, when I went Unfortunately, it is usually sound bites, lies, no bullshit.
Cowboy: "I have also delivered some leaflets. Some ofThis is nonsense of course, wrapped in the flag, family values and call the names of the other side, but I can not say if the economy is crap or not.
Economist: Look at this beautiful picture of a happy family smiling in this privatization brochure - parents, children and grandparents - all happy for their Social Security privatized.
Cowboy: "They just get enormous benefits from their private accounts.
Economist: But people invest in private accounts are notreceive Social Security checks for decades.
Cowboy in so happy with the money they could earn in 2040 in Texas, is to count the eggs hatch first, but they are probably the only models in stock.
Economist: If Social Security be privatized immediately benefit some people.
Cowboy: Let me guess, you're on Wall Street.
Economist: Wall Street is making money from pension funds. But to be honest, most supporters of privatization,Buccaneers as I like to call, to realize this and shut down brokerage costs in their estimates.
Cowboy: "Who else will immediately benefit from privatization?
Economist: If the people invest Social Security money in stocks, such as the Hilton Hotel in stock, what do you want to happen is the starting price range Hilton Hotel?
Cowboy: "The increase in the share price Hilton.
Economist: Who owns the Hilton Hotel in stock?
Cowboy: Paris Hilton, the Hilton family,Managers and other investors.
Economist: According to the share price increase will benefit the Paris Hilton and more millionaires now. You should put a picture of Paris Hilton on her brochure privatization.
Cowboy is Paris Hilton, our share repurchase at a price greater than 20 years when we retire?
Economist: It 's highly unlikely that Social Security will be millionaires by selling shares and buying shares with low financing. But it is rather long and complexQuestion.
Cowboy: But if Wall Street millionaires and will immediately benefit, not the rest of us would not?
Economist: It 's much less for the rest of us - except the economic pie is growing. But there are more than the cost of privatizing Social Security.
2. Free money for the families and the affirmation of the moral superiority of family values.
Economist: This looks interesting for its audacity. The Foundation says it is a "violation of family values," whenYou can die at 64 and your family gets nothing from all Social Security benefits you've done all my life.
Cowboy: Well, if I die in 64 years, my family is my country. I suspect that most people would be their home and other property to leave their families if they die at 64. Those who have no assets or those with young children you should buy life insurance.
Economist: But it would be nice if you could all your Social Security number, give your family if you died at 64?
Cowboy: Yeah, it wouldnice if my family has an extra few hundred thousand dollars if I have before my 65th birthday has died. But wait, that is the hundreds of thousands of dollars to pay for my family - the hundreds of thousands of dollars that would go to other people? It seems that the foundation is trying to sell me a free lunch. They are not conservatives in general against the free handouts?
Economist: I think the foundation could be argued that because government is not a flyer would be a return from your onlineSecurity money - but that still leaves less money in the system for others.
Economist: If you are 65 years, died near dead, you're also out of luck, you paid Social Security all my life. But what happens if you live to 95?
Cowboy: "We are here for lunch at McDonalds, so I do not know if we live to 95, but if we do, we will have years of Social Security checks.
Economist: The objective of social security is not to provide legacy youngerGenerations.
Economist: But that legacy is "life insurance" plan is not even a good life insurance policy, as a family say a father was younger, there are 30 years old, needs more of her children to get through school, and unlikely that the money saved while working in his twenties. As if a man dies at age 64, he is probably already supported his family.
Cowboy: No private market already sell life insurance?
Economist: Yes, the private, free marketa competitive life insurance market - but that is not to stop the pirates to offer free insurance.
Economist: Introduction to phrases such as "violation of family values" is a logical fallacy known as appeals to emotions.
Cowboy: Let me get this right, the Wall Street receives money bag, which goes to Paris Hilton in the world, to get money from the rising stock prices, and the families of those who die before 65 inherit money. Where are these money goingfrom?
Economist: It will arrive by the magic of compound interest, and we all go to the rich stock market. (Laughs) But seriously, I'm always there.
3. transition costs - paid twice
Economist: In addition to Paris Hilton, other millionaires, Wall Street, and families who have inherited, there are also the costs of the transition from today's retirees, in addition to their pensions.
Cowboy: But it says here that the transitionThe costs are borne, but the reduction in future obligations.
Economist: it is technically true that if our generation and to pay twice, the government will pay more for the next generation - but you still have to pay twice. It is not that make you happy that you are paying twice, and the government are to continue to reduce the government is committed to thank retired in 2150?
Cowboy: "I do not care that much retired at the 2150th How can I get out of payingDouble?
Economist: Most privatization plans are trillions to prevent the transfer, pay the rent twice.
Cowboy: But I do not end up paying interest on money?
Economist: Yeah, if you do not pay double immediately, you can pay the company the payment of interest and off slowly. However, there are no switching costs if you switch systems.
Economist: "But if we continue with a pay-as-you-system, we never, it once again. In fact, we will continue to be guiltyevery 65 years. They finally pass away, but replaced by new retirees.
Cowboy: But if you move to a private system?
Economist: If you change a private system, we have to pay all persons present who have contributed to the old system and save for our retirement.
Cowboy: "Do me this right, if we continue with the pay-as-you-go, we do not have to pay the transition costs?
Economist: Actually, we roll the obligation from generation to generationthe next.
4. The cost of risk
Economist: There is an additional cost - which could be informally called the cost of risk - have largely ignored the buccaneers, but the risk is expressed vocally complaining about privatization.
Cowboy: "I do not like risk, but what it costs the risk of me?
Economist: you do not receive an invoice in the mail of the danger, but people are willing to pay to avoid risks. Suppose there are two possible retirement:
Plan A: $ 1000 per monthguaranteed.
Plan B: $ 800 per month if the stock market is low, if any (50% of the time), retired, or $ 1200 per month if the stock market is higher when you retire (another 50% of the time).
Cowboy: "I would be guaranteed $ 1000 per month. Living with € 200 less, only $ 800 per month, would be much more difficult and is not offset by the possibility of $ 200 more.
Economist: The economic reason for taking the less risky option is "risk adverse" because the "law of diminishing marginalUtility of income. "
Cowboy: OK, if you say it, but a few years since I was in college.
Economist: Suppose I change plans:
Plan A: $ 1000 per month guaranteed.
Plan B: $ 800 per month if the stock market is low, if any (50% of the time), retired, or $ 1300 per month if the stock market is higher when you retire (another 50% of the time).
which is the same as before, is to save $ 1,300 a month, good outcome.
Cowboy: I can take the game for $ 1300, butwould be a close, tough decision. I would definitely take it for $ 1,400
Economist: Suppose that there are € 1300 you get $ 800, if the market is low and $ 1300, when the market is high, an expected value of $ 1050, but would be equally happy with a $ 1,000 secure.
Cowboy: "They have the same sound, but someone who pays $ 50 more. Someone has to pay $ 50?
Economist: To you as you are happy with a $ 1,000, you need an expected return to risk $ 1,050 - than the marketwould have to pay to take you straight back to you for your original plan or luck.
5. Afro-Americans and pension costs - cut from the insurance company.
Cowboy: "It is argued that African-Americans have been deceived by social security.
Economist: It 's true that African-Americans die soon after retirement and receive less money in the pension of a similar white person who made the same contributions to social security and work. But African-Americans from receivingSlow progress for social security and benefit of a disability and survivors' benefits. I have not looked at the studies in detail, but others have argued that African-Americans to get a better deal.
Cowboy: If we do not try, Sun Healthcare compensate African-Americans live longer?
Economist: Yeah, I'm not a doctor, but it could be genetic differences that we can not change. For example, women live longer than men.
Cowboy: "If African-Americansget each month more if, probably because they die before retirement to go?
Economist: private insurance is African-American with larger monthly payments since, on average, African Americans are less taxes rise faster than the death that brings up a good point: if the people at the age of 65 years retired, they must buy an annuity to receive monthly payments the rest of their lives.
Cowboy: "It is not an insurance company to take its cut?
Economist: InsuranceCompany will take its cut, and the costs of the sale of annuities. I have seen figures that it costs private insurance companies 15% to 20%, but with an important government program - you may be able to get this up to 12%. Twelve percent is what Cato used for their consideration.
Cowboy: "Twelve percent is a large section of my retirement! Twelve percent is a large section of anyone to retire!
Economist: A sell insurance or other companies do not invest in debt securities areactuarial work, and run the risk that people are living longer than expected. There are real costs.
Economist: That's why white men often earn low returns on Social Security: men do not live longer than women.
Cowboy: "Do not go to private insurance companies less than a month, women, because women live longer?
Economist: In a free market system is actuarial white women receive less per month. You all see the number of women than men in a nursing homehome?
Cowboy: "I see no evidence that women receive less pirates in this handbook.
6. What happens if we do not need to buy people, pensions?
Economist: If it is not necessary for people to buy annuities when they reach 65 and retire, many people survive on their savings - and pay for the common good in the end.
Cowboy: But if some people have enough money, say $ 2,000,000 in the bank and not become a burden on the rest of us?
Economist: A person withnot $ 2,000,000 in the bank should become a burden for us - unless they play in the Las Vegas or risky stocks, but there are other reasons why every purchase of an annuity.
Economist: Suppose you were sick when you are told to retire at 65 years, and the doctor, five years, they should live. Want to have a pension?
Cowboy: No, I want to live my savings for five years and leave the rest of my family.
Economist: Exactly, it is necessary to avoid that, that your moneyfor an insurance company. But if each person would probably die soon do it?
Cowboy: "Now the only healthy people would be pensions.
Economist: In business this is known as "adverse selection".
Economist: But if you're sick and the government has to buy an annuity?
Cowboy: "I would go to the insurance company to get my medical records, and say I'm sick and die. You have to pay me less, I would like to pay less.
Economist: ExactlyInsurance will start screening people and user profiles. The health insurance companies that customers who have less healthy medical expenses. In contrast, pension companies do clients not healthy, because they can stop the monthly payments if the client dies.
Cowboy: "It sounds a bit 'grim for me.
Economist: We could take a course for those who would eliminate this expensive screening and profiling.
Cowboy: "Is not that what Social Security is alreadyago?
Economist: There is another problem with inheritance, and each requires a board with 65 for the purchase.
7. Take the train to inherit 64 and your family.
Economist: Suppose you are in hospital at the age of 64 years, a few days after the 65th birthday.
Cowboy: If I die before I'm 65, my family gets to inherit, and if I die for my birthday or later, I have the rent for a few days to have - a couple of dollars.
Economist: It 's a pretty strongincentive to die before the age of 65.
Cowboy: "I'm strong, but not necessarily against suicide, but if you can inherit a very sick and my family - it's something to think about. If it is a matter of days, I was able to discontinue medical treatment early.
Economist: with a few days before his death, he could keep his family a few hundred thousand dollars. What if there were a few weeks, few months or a year?
Cowboy: "E 'there seems to be OK. What if we changed the age for66?
Economist die before your 66th Birthday or losing money, so she would have the same problem at 66.
Cowboy: "In addition to the macabre, it does not seem right. Some people would not come, leave a legacy, and others. What if someone threw Momma from the train, like in the movie?
Economist: I do not think you want or imply that the pirates are in favor of throwing people from the trains. This is an unintended consequence. I do not even know that most pirate liaronly good at political nonsense.
The eBook can be read online for free at http://www.socialsecuritybullshit.com and covers the following topics:
- Introduction - The Addams Family and Paris Hilton
- Free money for the families and the affirmation of the moral superiority of family values
- The transition costs - paid twice
- The cost of risk
- African Americans and the cost of pensions - The Company's Cut
- What happens if you do not require people to buyPensions?
- Shall Inherit the train at 64 and your family
- All or Nothing error: the privatization or liquidation
- False analogy
- The false analogy, that what is good for an individual is good for everyone: the fallacy of composition
- Free Lunch - Just delete the unnecessary government programs
- When the wasteful public spending could be reduced, it could also cut, to save the current Social Security
- Corporate bonds and hungrythe beast (the government)
- Let's All Get Rich in the stock market
- Productivity diminishing marginal utility: The decrease in profits
- Regression to the media and other incidents with the trends of the past
- Money is a veil
- You can save money, but you can not save most of the goods. You can not take the board to charge fees for future generations.
- Aliens (foreigners and foreign) have been buying our stocks and production of our goods
- Appeals to authority and personalConnections
- Only present facts selectively. Half the story.
- The magic of compound interest and is not magic.
- Less government is better generalization
- More choice is better generalization
- The choice has costs of research
- To make it look Using graphs of the bankruptcy of social security
- Big Scary Numbers
- The privatization is always better generalization. The privatization of the entire government?
- To make better investment decisions than individualsGovernment requires the separation of state (social security) and the stock market.
- Living the externality, your mother-in-law with you.
- Game system and save the losers in the stock market
- Retention of discouraged without insurance and risk taking.
- Growing our way out of the problem.
- Taxophobia
- You have no rights to social security. Scare Tactics
- Leave if you want - but guaranteed to have a vacuum. L 'Slippery Slope.
- Leave if you will - but pay your share of the costs of transition before leaving.
- The use and abuse investigations. Everyone wants more for less.
- The use and abuse of opinions and forecasts: the attempt to have both
- The current social security system: the worst system except all the others?
- Ten Point Summary
Read the complete eBook now for free http://www.socialsecuritybullshit.com
Copyright 2006 by Steve Baba.
culinary institute Indian Foods
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