Social security is funded by employees and employers through the 15 percent payroll tax and is in away invested in US bonds.
One problem is that it blows up in a 2008-type or great depression scenario and rocks everyone's "safety net". Second is that by investing it all in US treasuries, it's helped artificially keep rates lower. If you take SS out of treasuries and into the stock market, then interest rates will skyrocket. Not saying these are economically unreasonable things, but it's a reality that has to be accounted for.
Just to clarify this - the OASDI tax rate is actually 12.4% (the remainder of the 15.3% tax goes to Medicare). Most company employees pay half this (the company pays the rest) while independent contractors pay the full amount themselves.
That why you still invest in bonds and treasuries to minimize volatility. Pensions and IRAs survived 2008 and recovered pretty quickly. That said a stock and corp bond portfolio still would have outperformed a portfolio that is simply holding treasuries. I mentioned earlier that the Dutch model uses an 80/20 bond to stock ratio. Second it isn't as if these investments are not yielding dividends even though their face value declines. IF there was a massive wave of defaults then you would have issues, but I mean you could make the same argument against holding treasuries. If we ever have inflation again then the treasuries will lose value if you look at their mark to market value. Third, I don't see how rates would skyrocket if the Social Security quit buying so much. If prices of treasuries dropped then other buyers would step in VERY fast. The dollar volume issuance of treasuries has been close flat since 2009 and rates have continued to move lower. There are a lot more retirement assets out there outside of the Social Security fund. Also, the yields more closely mirror inflation rather than supply and demand. Anyhow, all this won't ever really happen. I'm not sure why Bernie even mentioned Denmark and their retirement system because it is something he would agree with from what I see.
I assume you would NOT agree with. But if a safety net system provides a livable income for those who need it, I don't think Bernie would care how it's funded. This seems like a required investment account really, like the ACA is a required insurance program. They are things people really need that they would not buy if they weren't required to, things that save them from becoming a total public burden for almost inevitable events: required pay as you go. But unlike the ACA, the private profit needs to be taken out of it. We don't need to be funding CEO's G5's from required programs (why single payer is better). It would be a good question who runs the Denmark investments and how are they compensated. I don't think Bernie is anti-markets he's just for well regulated markets.
Bernie Has Better Chance than Hillary in General Election Cenk Ugyur argues that the polls (not the mainstream pundits) show that Sanders has the better shot against the Republican, not Hillary with her sky high negatives. https://twitter.com/TheYoungTurks/status/701798625886601216
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I don't think he is against markets in general either but I do think it is a fair question if he, or more importantly his supporters, would accept a largely privatized system that still returned profit. In your response above you say that profit has to be taken out and we shouldn't be funding CEO's. As a Sanders' supporter would you accept a system that showed it could provide a good return for most people yet was still market and profit based?
Why interject Sander's supporters? Granted you might fret that some are not contented enough with the status quo. Speaking as a Sander's supporter I welcome any proof that brilliant stock pickers on say a 100 year time horizon can beat the market, when you factor in their fees. If I am wrong please provide support. Hey as a Sander's supporter I would have nothing against putting the mandatory "social security contributions" put into say a 50-50 (or 60-40) total world wide bond and total total worldwide stock market fund. Such fund to be managed by some computers and a few government employees making say $60 k. Such a system should be able to beat the fees on even the lowest priced index funds -- just like Medicare beats the administrative costs of private profit seeking insurance companies. Social Security essentially provides an annuity adjusted for inflation that pays out regardless of how the market is doing that year or decade and regardless of if you retire in a hot decade or horrible decade. It is also designed to pay out this type of annuity even if you are say 25 years old and become disabled by a huge accident and have not bought expensive private disability insurance. Have you checked out the costs of such annuities? It is designed to be the safest possible money to a level where the very poorest can survive. Others like you and I are free to speculate with whatever money we want. Statistics seem to suggest that even up through the upper middle class social security is a significant portion of an individual or couple's retirement.
That's generally because no one knows anything about Bernie Sanders - he has not suffered a single attack by the GOP. Hillary's poll numbers are likely a floor - everyone knows her, and she's been attacked for the last 30 years by the GOP. I can't find the link, but there was a big focus group done - by a pro-Bernie group, if I remember correctly - that started with people who generally favored Bernie. Then it ran through a list of the most likely GOP attacks on him, and his support absolutely plummeted, way beyond anything they expected and way more than other candidates. He's, unfortunately, likely to be a pinata waiting to be pummeled. In a world of 10-second soundbites, it's very easy to make him look terrible. I'm not making an argument for or against his actual policies or what he'd be like as a President, but what a campaign would look like. That said, this discussion is sort of moot at this point. Sanders absolutely needed to win Iowa and Nevada - the close losses hurt him badly and took away any chance to build momentum. He's going to get crushed in South Carolina and the Super Tuesday states look terrible for him. He has Vermont and maybe a few smaller caucus states left, but it doesn't appear he can win anywhere else.
I envision sort of a quasi-public entity, a Fund of the United States, run by an appointed board, staffed by salaried fund managers or better yet, the best AI investment algorithms money can buy. AI doesn't need compensation for motivation. http://www.wired.com/2016/01/the-rise-of-the-artificially-intelligent-hedge-fund/ You would need to avoid the idea of 'social engineering through investment strategy' that would be tempting for politicians seeing a trillion dollar fund. Things like carbon-neutral companies or job creation would be tempting but the bias should be purely for safety and adequate income and growth.
It's pretty hard to attack a purist whose ideology is what is attracting voters. The attacks we have seen so far are laughable in the context of this goofy election. he is going to be called "communist" and "socialist" instead of democratic socialist and that will scare the a lot of people, until I think he speaks at length to explain his positions. That's when people realize they are democratic socialist, we all are really. Nobody wants robber barons running the nation with impunity, everyone wants shared efforts that yield a better life.
Keep fighting the good fight, but understand that you're basically arguing against math at this point. You're no different than all the skewed-poll people in 2012 or the Hillary supporters that maintained she had a chance in late March vs Obama in 2008. The math just doesn't add up. Can you name a single state on Super Tuesday that Bernie is likely to win? Sketch out his path to actually winning the nomination for us. Here's your fundamental problem. You're so blinded by the "us vs them" mentality that you put everyone who disagrees with you in some weird "enemies" box. I don't like Hillary. At all. I think she could very well lose an election to the GOP and especially to Rubio. You only think I'm a big supporter because you live in some warped alternate reality that can't comprehend shades of gray.
Can anyone actually picture Rubio as the spokesman for the Free World? Gravitas and stature are meaningful qualities in a President, and in reality, Ms. Clinton is the only candidate of either party that actually brings that. Mr. Sanders and Mr. Rubio need to start talking in longer ideas rather than repeating the same sound bytes.
Really dumb question so here goes. Reddit seems to me like they're a massive Bernie supporters. Why is that? I just popped over there to see some opinions and it felt like a Bernie Sanders website.
