MaxedOutMama

Pay social security it lottery tickets. Call it Scratch-off Security.

You may already be a winner! (At the expense of your neighbor.)
 

Charles,the lottery is the best chance for retirement many have.
 

Charles and Tom:

I don't remember where it is, but Freud once wrote that gambling - especially compulsive gambling - is a sign that an individual has lost hope of influencing his future outcomes.

Tom Stone, your remark is the perfect capsule description of the Freud hypothesis.

Good Ole Charlie
 

Ugh, the doc refused sedation. Due to merciful amnesia, I keep thinking that the two-month change in the "Not in labor force" number is my mistake, but I've checked it three times and that is what the tables say.

This is getting to be pretty hair-raising. Right now we've still got something going in the private sector.

But - get this - last July the unemployment rate was 9.4%. This July it is 9.5%. And that wouldn't be so bad, EXCEPT that we have shifted 3.8 million to the "Not in labor force" category over the year, which is really pulling down unemployment rates.

A lot of those people are going onto early retirement, but the lower unemployment rate is only cosmetic - the fiscal impact is still there.

Last July the U-5 rate was 10.7% and this July it is 11%. Last July the U-6 unemployment rate was 16.4% and now it's 16.5%.

There are still some Census workers who will drop out of the numbers. From here on it is a hard, hard slog to keep this little engine chugging up the hill.
 

Ugh. I was hoping the unemployment numbers would be steady or slightly rising as the "not in workforce" category began to decrease. I guess I shouldn't be too surprised, since unemployment benefits or SS/Disability are still more lucrative for over-50 workers than many of the jobs they can get in this environment. When you're over 40 and your industry is devastated, it's very difficult to find an equivalent position in a new one.
 

Social Security supports the mainstreet economy. This administration is committed to supporting the Wallstreet economy. Granny is toast.
 

Since there is widespread agreement that this economy needs stimulus in some form or another, and since Social Security benefits are the major stimulus keeping this economy in a slow recovery rather than letting it slide back into contraction, shouldn't our focus shift to figuring out how to pay for Social Security rather than how to cut it while convincing people that we are helping the economy?

Check this out.

Social Security Jitters? Better Prepare Now

AT 35 YEARS OLD... This also means they'll have less discretionary income -- about 9.4 percent less to be exact -- to spend each year, over the course of their lives.

AT 45 YEARS OLD... To do that, they need to cut their discretionary spending by about 9.7 percent a year for the rest of their lives.

AT 55 YEARS OLD... To do that, they will have to spend 10.4 percent less each year.

If we want to really find out why the Chinese have such a high savings rate then we could simply eliminate Social Security altogether. What a fun experiment that would be. In a few years we could then marvel how we ONLY lost 5,204 restaurants from 2009 to 2010. We could even call that era the "Roaring 2000s!", at least by comparison. We could call the new era something "Great" too I suppose! Woohoo!

We definitely should get rid of Social Security. It was created in 1935. That was during the Great Depression. We won't be having any more of those though. This economy is strong and vibrant! Get rid of the safety nets I say!!

Snark, snark, snark, snark, snark, snark, snark!
 

Mark,

Soc Sec was born in Great Depression I.

ObamaCare born in Great Depression II.

We're doubling down on safety nets. Your grandchildren will be lucky to get aspirin and tourniquets.
 

Canada, with 1/10 the population of the U.S., created 93,200 jobs in June, 24,700 in May and 108,700 in April. Something must be different up there.

Wonder what it could be?
 

Maybe the best thing we could do is to make EVERYONE's retirement directly dependent on the health of the financial markets. We might get a majority of voters concerned about the business climate in the country.

Actually, I'm convinced we should do this. Of course, we'd need to teach from Thomas Sowell's texts in High School. That might require rather severe upheaval in the educational monopoly.
 

I hate to ruin a good snark, Mark, but that article doesn't make sense from a real-life perspective.

Yes, it's true that an increase in the Social Security retirement age means a net decrease in benefits assuming constant lifespan. But one of the reasons we're in this pickle is because lifespans have not remained constant, they've increased dramatically, as has the relative health and well-being at any given age. We've all seen photos from the 1930's of "old" folks all of 50 years of age. To our eyes they look 80. Goiter will do that to you.

We're going to work until we're 70+, at least, because we can. And let's face it, that will be a net benefit to everyone. There's no reason a low-income family in their 20's should pay a pension to a healthy, active 70-year-old.

But perhaps it's easy for me to think this way. My 92-year-old grandfather was up replacing shingles on the barn cupola because it was "too dangerous" for my 35-year-old cousin to do it. As soon as he had to stop working, he just shriveled up and died. I guess I've been brought up expecting to work until I just can't, and to be grateful for the opportunity to do so.
 

Neil,

My point was that if people were spending more because they expected to get Social Security and then Social Security simply vanished, then they would be FORCED to save a LOT more than they currently do. That would be quite the shock to our consumer driven economy.

As a side note, I may be biased too of course. My 86 year old mother recently fell requiring many stitches. She's just not that physically stable these days. Fortunately, she was not on the roof.

I would also ask where the jobs are supposed to come from in a world where few can retire and we continue to outsource and automate?
 

Neil,

I'm not suggesting I have any answers to our problems. There are unintended harmful consequences to almost anything we do now. If older workers are forced to work, workers in general are more heavily taxed, and/or workers in general are forced to save then I would expect more of this...

People@Work: A Teenage Wasteland for Employment Opportunity

But there are longer-term implications as well, says Michael W. Brandl, professor of finance at the University of Texas at Austin. "If teenagers -- especially those from low-income or even working-class families -- can't get summer jobs, that means they will have less work experience in the future," he says. "Labor economists have shown again and again that work experience is an important factor in lifetime earnings."

Further, decreased earnings over a lifetime have the potential to affect the whole economy, not just the workers bringing home those reduced wages. Then there's college. Without income from summer employment, teens will have to find other sources of money to help pay for their degrees. And if they can't, the result could be that some will put off starting or continuing college or will abandon the idea altogether.

We've dug ourselves quite the hole.
 

Neil - I don't think average lifespans after 68/69 have increased all that much. I have another busy day, but I'll try to find the figures for you some time this weekend.

What has dropped sharply are the near-retirement deaths. A lot of people used to die in their later working years, whereas now they don't.

In my family, most people work until they are in their 70s. But they slow down. That's what I remember from my childhood - people just slowed down. They worked much less.

Another thing that has changed are that both men and women tend to work.

If we try to keep older people working in regular jobs until they are 70 in large numbers, the result will be that many younger people will be able to earn very little until their later 20s. It is not as easy as people think it is.

For what it is worth, most retired couples I know of have at least one person working into the late 60s or 70s now, unless one spouse is already ill and needs a great deal of care. They do it to supplement their regular retirement earnings.

It has been little discussed, but in many areas of the country the run up in property taxes/retirement earnings has been enough to push older people back into the workforce.

Teen and young adult unemployment was already rising before this recession, in part because of older people taking jobs teens and young adults used to have.
 

Yeah, when businesses start pushing people out in their late 40s, it's gonna be hard to find anyplace that will hire them in their 70s. And frankly, that notion that folks are fit in their 70s is bull. I have less stamina at 59 than I had at 49. I can make it through 10 hours of talking on the phone, but I tend to burn out more than I used to. It's so easy to think that older folks are just the same. Age does take a toll. The only way I will be able to work until 70 is to employ myself, somehow. Meanwhile, my 20 year old stepson is employed as a janitor. He's going to school, so there's hope. Most of his friends live at home with their folks and don't work.
 

M_O_M, Mark, et. al.,

I pretty much agree with you on the specifics. I didn't mean to say that people can go on working into their 80's as though nothing had changed. I was cavalier about that in my post, I apologize.

However, it seems to me that we're creating an inefficiency if retirees are only allowed to be greeters at Wal-Mart! We simply have no choice but to re-structure the workplace to make use of highly experienced retirees, without shoving them off into low-skill jobs better done by young, low-skill new entrants into the workforce.

Currently, the workplace (and the tax system) is structured to discourage the use of high-skill part-time labor. I know this is true from first-hand experience, trying to negotiate consulting gigs with corporations who just can't make it work for them, even though they're desperate for people with my skill set.

At the same time, we've got a very tight labor market for some specific high-skill jobs, at least partly because of retirements en masse of high-skill employees. The recession caused a hiccup in demand, but even with the "jobless" recovery, the headhunters are out in force for robotics, power engineers, AI, bio-engineering, experienced industrial engineers, things like that. Projects are simply not getting done, which means that younger, less experienced workers are not getting hired to do the busy work just because there's nobody to do the heavy lifting in a reasonable time frame. It's a great time to be a consultant in one of these areas, but not so good for the economy.

I realize not every retiree is highly skilled, but if we could re-structure the workplace and tax system to encourage experienced people to work in jobs they know how to do, at their own pace after 65 or so, I think there's some tremendous efficiencies to be gained, as well as tax revenue, just from the marginal increase in manpower resources. The added income would ease the Boomers' financial situation, as well, which can only help things.
 

Since there is widespread agreement that this economy needs stimulus in some form or another,

Maybe there is Keynesian agreement to this affect, but it should be obvious by now that Keynesian economics has been completely discredited. The supposed theory is that the government saves in good economic times, and then goes into deficit in bad times. But now it never runs a surplus, and its deficit spending in good times becomes completely unsustainable in bad times. Since "stimulus" in the form of deficit spending simply involves pulling consumption forward by borrowing against future earnings, eventually this sort of policy runs up against a brick wall when it's no longer possible to sustain the carrying costs of the debt. We've reached that point! We have to live within our means, and stop pretending that the government can "fix" problems by making up money.


and since Social Security benefits are the major stimulus keeping this economy in a slow recovery rather than letting it slide back into contraction, shouldn't our focus shift to figuring out how to pay for Social Security rather than how to cut it while convincing people that we are helping the economy?

What?? Talk about a false premise leading to a false conclusion. Who says SS is keeping anything afloat? In any case, how can anyone conceivably believe that sending checks to old people is "keeping this economy in recovery"? If that were the case, why not have the Federal gov. simply mail everyone a check for $100,000? Now there's a "stimulus"!

In any event, a real, sustainable economy is based on the production of actual economic goods. Government spending at most involves siphoning off resources from those who do produce something and giving it to someone else. Or it may involve borrowing actual money from the private sector, which chokes off private investment. At worst, it involves the Fed simply making up money in return for Federal securities. But that's to confuse money with wealth.

And there seems to be some insane idea going around that SS is some sort of "investment" because for decades people have been paying into a fund. In case anyone hadn't noticed, every single cent of the fund's surplus has been used to pay for the Federal government's regular expenditures. That is, the money is gone. The so-called Trust Fund consists of a bunch of binders in some office in W. Virginia (thank you, Sen. Byrd!) containing US Treasury securities. That is, once the program can no longer pay out benefits purely from its own receipts and goes into deficit (which will soon be the case), the shortage will have to be made up through the receipts of the Federal treasury, which is currently spending $1.5 trillion more than it takes it. So any SS payments (including this "stimulus") consist either of money that's been withdrawn from the economy through SS taxes (and so is a wash) or of increased Federal borrowing.

This is insanity. It's no doubt fun to buy all sorts of cool stuff on the credit card, but it's not so much fun when you've maxed the card out, can't borrow any more, and have to start paying off the balance or risk bankruptcy. Face the truth. The US is close to getting its credit cards "declined."

The government may make up money by fiat, but not wealth!
 

It's my opinion that for the last 35 years this country has been sending its manufacturing overseas and shutting down the production of our natural resources (lumber, oil, and mining) while making energy production (natural gas and electric utilities) more expensive.

A lot of the manufacturing would have left anyway, but if the government had been less hostile to business and kept business taxes lower I believe many of those jobs would not have left.

Look at commercial aircraft manufacturing. We're down to two companies now - Airbus and Boeing. Would it not make sense for the government to encourage Boeing with low taxes? Here in Washington, Boeing's main manufacturing center, the state governmment keeps sticking their finger in their eye rather than treating them like the jewel that they really are. As a result Boeing has moved manufacturing to Kansas, North Carolina, Korea, China, and Taiwan. Microsoft, our other crown jewel, is starting to move divisions to other areas.

The lumber industry is dead here in Washington and all over the west. It used to be a source of good jobs and an export industry to boot. The enviro-whackos killed it.

We are buying oil that we could be producing right here from ANWR, Santa Barbara Channel, and many other places that are closed to oil exploration now. The Feds get lease payments from the oil companies, then royaties on every barrel of oil produced, taxes on the companies' profits, taxes on the oil workers' incomes, and taxes on every barrel of oil refined into gasoline. The Feds profit at every step of the way, but take none of the risk. Why aren't they encouraging oil exploration? It's the enviro-whackos. They have seized control of the issues and the Endangered Species Act has given them a lever that allows them to file injunctions against any person or company that they don't want to engage in oil exploration, mining, lumbering, or any other extraction work they find objectionable.

They have stopped nuclear power, they are trying to tear down our hydro dams, and they make the outrageous and false claim that we can transition easily to windmills and solar panels to produce our energy. Oh yeah? How are they going to power autos, buses, trucks, etc. with wind and solar?. Wind and solar are not practical exzcept in small usages where 24/7 reliability isn't an issue.

We are in the pickle we're in because we have become a country that is hostile to business and the wealth creation of our natural resource extraction. And the enviro-whackos are to blame.

End of rant.
 

Just want to make sure everyone realises this is all Bush's fault! :)
 

The recession caused a hiccup in demand, but even with the "jobless" recovery, the headhunters are out in force for robotics, power engineers, AI, bio-engineering, experienced industrial engineers, things like that.

I'd just like to point out that during the "education bubble" of the last 20 years or so, where a higher percentage of teens went on to college than ever before, there was NO bubble in engineering majors.

Also, I've seen first hand that most companies are looking for excuses NOT to hire. They leave jobs open and will hire someone if the right skill set with low wage demands come along, but otherwise the job is open so that it can be cut when downsizing happens. I've seen it happen at far too many places - a manger's bonus is based on coming in under budget for the year and an unfilled job helps in that; manager's weigh the "coming in under budget for the year" bonus versus "getting the project done on time" bonus and pick the easier of the two.