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MrPepper11
2005-05-08 17:40:35 EST
BusinessWeek / May 16, 2005
"I Want My Safety Net"
Why so many Americans aren't buying into Bush's Ownership Society

George Silli, a 66-year-old waiter from suburban Philadelphia, had a
brush with President Bush's Ownership Society, and it was an experience
he'll not soon forget. Silli's psyche and his wallet still bear the
scorch marks of the 2000 market meltdown. He saw the value of his
mutual funds drop by 60% and is convinced that opening Social Security
to individual investing would produce similar results on a massive
scale. "If people are left to their own devices, we'll become top-heavy
with poor people," Silli says.

A political independent, Silli has learned enough about the market to
be pessimistic about a small fry's chances. He not only wants to leave
Social Security alone but also thinks politicians should expand
entitlements by mandating near-universal health insurance as a shield
against soaring medical bills.

Although Silli may not know it, he has plenty of company from all walks
of American life. He's part of a diverse group that includes the
pathologically risk-averse and those who are willing to take the
Ownership Society for a spin -- as long as it's equipped with air bags.

April Tsirigotis, a 30-year-old Republican and an information
technology executive from Lusby, Md., is a big fan of the President and
applauds his efforts to solve Social Security's fiscal woes. But, says
Tsirigotis, the divorced mother of a 7-year-old, "I disagree with the
idea of giving people private accounts in which their annual returns
and their eventual benefits would be based on the stock market. It's
too risky. No one knows how much will be there in the end."

While many members of Safety Net Nation have nothing against investing
and choice, they're worried that the country's web of public and
private social protections is fraying. They believe in more, not fewer,
safeguards against downward mobility in a world that's already pulsing
with economic uncertainty. Safety Netters include plenty of
card-carrying Republicans and independent swing voters, and the group
may represent a broader swath of America than the White House imagines.

A Sept. 2-5, 2004, survey by the Civil Society Institute, a Newton
Centre (Mass.) nonprofit group, found 67% of Americans think it's a
good idea to guarantee health care for all U.S. citizens, as Canada and
Britain do, with just 27% dissenting. Support for a government-directed
universal insurance system is strong, despite GOP warnings about
socialized medicine. Similarly, a Feb. 3-5 Washington Post/Kaiser
Family Foundation poll found that 47% of respondents believe the
government ought to guarantee a minimum standard of living for
retirees, vs. 35% who felt that was an individual's responsibility.

The most predictable members of Safety Net Nation are liberals who
favor activist government. The really crucial bloc, however, is made up
of those who backed Bush in 2004. They still approve of his overall job
performance but have soured on Wall Street and dislike the President's
approach to Social Security. This faction -- estimates range from 17%
to 22% of the electorate -- rejects both traditional liberalism and
conservative laissez-faire. In an era of rampant job insecurity, when
employer-provided pensions and health coverage can no longer be taken
for granted, they want a middle-class security blanket that gives them
protection as they build wealth.

Stretched Thin

Safety netters' fear of social unraveling comes amid some disquieting
trends. Big swings in family income, according to studies by Yale
University political scientist Jacob S. Hacker, have increased markedly
over the past two decades as the finances of two-earner households have
been stretched thin. Even houses -- most Americans' entrée to the
Ownership Society -- are increasingly in hock: In the past 15 years,
mortgage and home-equity borrowing has risen from 35.1% of home values
to 43.9%. That has made families, especially those with unskilled
workers, more vulnerable to a catastrophic jolt such as job loss or
serious illness. Personal bankruptcies increased fivefold from 1980 to
2002, with many filers citing a layoff or medical emergency as the
tipping point.

As income volatility has grown, government -- prodded by free-market
Republicans out to reverse the New Deal -- has been offloading ever
more responsibility onto individuals. The financial pressure has become
much more acute because of another squeeze occurring in the private
sector. Corporations vying to compete globally have steadily shifted
costs and responsibility for pensions and health care to their
employees as part of the restructuring wave that began in the 1970s.

The Sellathon That Didn't

Conservatives see disentitlement as a recognition of new economic
realities -- and the death rattle of the Nanny State. But skeptics,
among them prominent New Democratic thinkers, counter that America's
safety net can be both modern and market-based without piling still
more financial burdens onto the stooped shoulders of Joe and Jane
Average.

Because social engineering through tax breaks, preferential loan and
savings plans, and other indirect subsidies favors those with good jobs
and income to invest, New Democrats advocate policies that tilt savings
incentives toward lower-income Americans. They include universal
401(k)s, compulsory savings plans set up for kids, and mandated social
insurance -- a subsidized rainy-day fund for financial emergencies.
Hacker is working on "a kind of catastrophic insurance plan that could
be administered by the private sector but heavily regulated by the
government." Employers would be required to match employee
contributions to the new financial umbrella. The price tag, he
concedes, "would not be trivial" -- meaning a multibillion-dollar
commitment.

Conservatives dismiss such proposals as security pie-in-the-sky. But
they've got their own problems in the here and now trying to generate
momentum for personal accounts and other becalmed elements of the Bush
ownership initiative.

The centerpiece is an audacious bid to "modernize" the government's
retirement system by letting workers divert part of their payroll taxes
into stocks and bonds. On the road, Bush tells audiences he's selling a
retirement iPod -- sleek, shiny, and designed for the Digital Age --
while Democrats cling to a system as retro as an LP record. Besides, he
says, the downside of personal accounts will be limited. Those who opt
in will have a carefully chosen range of investment options, selections
modeled on conservative fund choices found on 401(k) menus.

Trouble is, the President, in his guise as Salesman-in-Chief, may have
done too good a job raising alarms about Social Security's imminent
implosion. "Bush said, 'We're going to have a crisis,' and offered
private accounts as part of the solution," says James K. Glassman, an
American Enterprise Institute scholar. "But the two things are really
separate, and the President was never able to make a connection between
them." What's more, the crisis-mongering only served to heighten
anxiety among the risk-averse cohort.

Bush made an overture to critics on Apr. 28 when he offered to protect
payouts for the poor. His idea: preserve the current benefit structure
for the bottom third of wage earners while progressively reducing
guaranteed payments for those up the income scale. The result is a
means-tested version of Social Security. But despite such gambits, the
President has little to show for a 60-day national sellathon that took
him to 23 states. If Congress enacts Social Security reform this year,
it could be a far cry from reformers' dreams of big private accounts
carved out of payroll taxes. "Bush will come out of this with
something, some change or other that allows him to say he moved the
ball," predicts pollster John Zogby. "But it won't be what he wanted."

Down on Wall Street

Objectively, this is not a bad time to be raising the issue of reform.
Baby boomers are about to retire en masse and on paper, family balance
sheets have improved. Americans' household wealth has floated upward of
late, propelled by recovering stock valuations and soaring real estate
values. Moreover, real wages for the civilian workforce have grown 8%
in the past decade after a long stretch when they fell. And the family
poverty rate, tallied at 10% in 2003, has improved from the 13.9%
numbers recorded four decades earlier.

Still, what private-account backers seem to have misjudged is the
public's current jaundiced view of Wall Street and investing risk.
America, unlike most other advanced nations, has a dual welfare system.
There are direct government-transfer payments to the poor and elderly
-- programs such as Medicare, Medicaid, food stamps, and Temporary
Assistance for Needy Families. But there is also a huge set of
private-sector protections for workers, largely underwritten by
employers -- items such as subsidized life insurance, disability
coverage, and help with day care. Plus, powerful groups in society
snare subsidies in the form of preferential loans offered to farmers,
disaster relief, tax-deductible flood insurance for beachfront property
owners, and a fistful of tax breaks for small businesspeople.

While federal spending on the safety net for the poor has grown
briskly, it hasn't kept pace with society's needs. Medicare is
straining to cover seniors' bills, and some states are downsizing
Medicaid programs. In 1996, strict time limits were put on welfare
dependency, a step that slashed the rolls by half. Meantime, huge holes
have been ripped in the private safety net as the cost shift to workers
has accelerated.

The result is riskophobia. "With a far greater portion of family
budgets devoted to the mortgage, car payment, and health insurance, a
transitory shock to wages becomes much more menacing," says Raj Chetty,
a University of California at Berkeley economics professor who studies
risk. "Equities are seen as risky, and if people aren't jumping for the
investment option [as part of Social Security reform], there's a
reason. Risk in general has become a much more pervasive issue."

In January, 2000, before the dot-com bubble burst, 67% of Americans
said that if they had $1,000 to spare, investing it in stock would be a
good idea, according to the Gallup Poll. By April, 2005, that
percentage had fallen to 45%, with 51% saying the stock market would be
a bad choice. Among the groups whose faith in the market dipped most
are three key Bush constituencies: baby boomers, college grads, and
suburbanites.

Chasing Gushers

To George W. Bush, a Texan who revels in the myth of the wildcatter,
running risks in pursuit of the big gusher is a quintessential part of
the American character. But as the scion of an aristocratic Eastern
dynasty, the budding young tycoon always had a network of family
friends and relations to call on. Those golden connections bailed
George W. out of his early forays into the oil business.

The not-as-well-fixed Net Setters want some bedrock guarantees in
turbulent times, too. Private Social Security accounts? Sure, in
addition to core benefits. Portable medical savings accounts? Fine, but
not as a replacement for employer-provided health insurance. "They want
the Ownership Society -- but they want it with a warranty," says
Representative Rahm Emanuel (D-Ill.), who has introduced legislation to
expand tax credits for lower-tier families and to make college savings
easier.

According to a BusinessWeek analysis of data compiled by the Pew
Research Center for the People & the Press, at the core of Safety Net
Nation are white men. You read that right. These are the same
white-male swing voters who have been trending strongly Republican in
recent Presidential contests. They tend to be socially conservative and
patriotic. They have average incomes and are slightly less educated
than the citizenry as a whole.

The Safety Netters are not monolithic, however. They include aging men
who are suspicious of Big Government and Big Business and who view
private accounts as a giveaway to Wall Street and a gamble for their
children and grandchildren. There are suburban Security Moms --
convinced by Bush that Uncle Sam should aggressively protect them from
terrorists and cultural pollution -- who worry that the President is
making retirement dicier. And there are the burned investors of the
Baby Boom generation, who want some government safeguards from the
serrated edge of globalism -- from corporate downsizing to vaporware
pensions and rampant outsourcing.

Bush über-strategist Karl Rove, who commands the White House's Social
Security war room, sees personal accounts as vital to shifting the
allegiance of younger voters to the GOP. But there's a glitch in Rove's
machine: Polls show that, rather than flocking to Bush over Social
Security, the under-40s are growing skeptical of his approach.

Among those resisting a Bush move to pare middle-class entitlements are
thirtysomethings who feel squeezed between saving for their kids'
college education and taking care of retired or soon-to-retire parents.
Then there are disillusioned techies who once wanted government to get
out of the way and let them get rich by age 30 but who now favor a
federal role in shielding them from the excesses of capitalism.

Put these pieces of the electorate together, and you have the makings
of a political boulder that stands between Bush and his shining city on
Ownership Hill. "We are now living in the Security Society," says
independent pollster Thomas H. Riehle. "People say, 'Protect me."'

If the President can't win over some of these skeptics, GOP knees will
continue to buckle on Capitol Hill. More important, other elements of
his agenda, from new savings plans to personal health-care accounts,
could be imperiled by the flight to safety. "If Social Security reform
stalls, blood will be in the water," warns Daniel J. Mitchell, a senior
fellow at the conservative Heritage Foundation. "Democrats fighting for
what I prefer to call the Dependency Society will be emboldened to
oppose all of Bush's ownership agenda."

To complicate the President's push for private accounts, the
performance of stocks in what was supposed to be a sprightly spring has
led to more skepticism. In April, the Dow Jones industrial average hit
a new low for the year on stagflation worries, and the major indexes
gave up most of their '05 gains as investors fled from risk.

"Bush's timing is not good," notes Eva Bertram, a political scientist
at the University of California at Santa Cruz. "The public is leery of
becoming more dependent on the market, and there is great anxiety over
employment prospects and stagnant incomes. Right now it's just very
hard to give up the security offered by things like Social Security and
traditional Medicare."

Shifting the Risk

Democratic pollster Stanley B. Greenberg is more blunt. "I never
believed this Investor Class hype for a minute," he says. "What
happened is that Bush gave the nation an extended tutorial on risk, and
that came on top of growing awareness of the risk shift from private
institutions to individuals" as both traditional pensions and 401(k)s
fell short of offering true security. The result, Greenberg's data
show, "is a collapse in support for Social Security reform."

What the White House proposes, in fairness, is not a complete swap of a
public retirement supplement for a private one. Bush says that letting
workers voluntarily set aside a chunk of their payroll taxes -- say, 4
points of the 12.4% tax -- in conservative investment options will let
retirees reap a richer reward than the government system's puny 2%
return. But if guaranteed benefits are slashed for the middle class and
above, more Americans will be drawn into private accounts to make up
the difference, changing the nature of Social Security. "The plan does
have a guarantee in it in the form of the core benefit," says Kent
Smetters, a Wharton School associate professor and former Bush Treasury
official. "Since it's only partial privatization, Bush needs to play up
the safety net angle."

The model for private accounts is the 401(k) system of workplace
savings. But critics claim Bush is overselling the ability of such
self-directed plans to build a nest egg. Former Clinton economist
Alicia H. Munnell, director of Boston College's Center for Retirement
Research and an expert on 401(k)s, says the numbers don't bode well for
Social Security.

Skimpy Savings

Munnell's research shows that 26% of eligible people never opt in to
401(k)s, fewer than half of the participants take the advice of
financial planners and diversify their holdings between stocks and
bonds, and 55% cash out their savings when they change jobs -- which is
frequently. Models project that a median-wage worker contributing 6% of
pay, plus a 3% employer match, should have about $300,000 in his 401(k)
as he approaches retirement. The actual figure: $42,000.

"People have not done a very good job with 401(k)s, and it weighs on
them," Munnell says. "I don't see any sign that they're dying to take
on still more of this kind of responsibility. The Social Security
debate may be testing the limit of the swing to individualism we have
seen for the last 20 to 30 years."

To the counter-reformers who believe Bush is misguided in his ownership
strategy, the question is not whether to kill off market-based measures
that aim to increase family savings or health-care security. It's how
to use markets and choice in a more effective way.

Democrats would keep core Social Security intact but are willing to
augment it with an add-on investment option. "If the President says
individual accounts would be separate from Social Security and was
willing to make the financing of reform progressive, he could get
Democrats to sit down, and [he would] have a shot," says Gene Sperling
of the Center for American Progress, a Democratic think tank. "If he
wants to start down the slippery slope toward privatization, why should
we work toward goals that are the antithesis of what Democrats believe
in?"

Other Dems are more forgiving. "The President has the right idea to
strive and make more people own more of America," says Ray Boshara,
director of the asset-building program at the New America Foundation
(NAF), a centrist think tank. "Owners are better citizens. But we need
to preserve the safety net while helping people build wealth."

The NAF is pushing two pet ideas: a tax-favored savings account for
every child, seeded with a $500 grant at birth and with government
subsidies for low-income kids, and an option for taxpayers to direct
the IRS to channel part of their tax refunds into savings accounts. If
savings can be made automatic, backers claim, taxpayers are less likely
to spend refunds.

An Elemental Struggle

The "kid-save" idea is no pipe dream. An early fan was former Bush
Treasury Secretary Paul H. O'Neill, and conservatives such as Senator
Rick Santorum (R-Pa.) are mulling legislation to create the accounts.
Projected cost over 10 years: $38 billion.

Yale political scientist Hacker and economist Peter R. Orszag of the
Brookings Institution are thinking on a larger scale. Hacker's plan for
a universal family savings account is being fleshed out and is
scheduled to be unveiled in August. "You have to provide workers with a
basic form of protection that follows them from job to job and covers
big risks," Hacker says. Universal insurance would be regulated by the
government, and employers would have to kick in mandated matching
payments. But administration of accounts would be left to the private
sector.

Not so long ago, Republican economists would have been delighted to
hear political rivals floating ideas for boosting savings and shoring
up Social Security's solvency. But in today's hyper-partisan climate,
the fight over the ownership agenda has taken on a larger dimension.
Bush wants to wind down dependence on the bureaucratic welfare state.
Democrats want to revalidate government by weaving costly new safety
nets for workers. It's an elemental struggle, but one in which outcomes
can be perverse.

In 2003, for instance, the White House set out to revamp Medicare by
putting a lid on runaway costs of the huge entitlement program for
seniors. GOP lawmakers, though, feared they would be hammered over the
issue in the '04 election, so tough cost controls went out the window.
What Bush wound up signing into law still has many conservatives
seething: a $1.3 trillion expansion of entitlements in the form of a
new Medicare prescription-drug benefit. It was hardly the monument he
envisioned. But it was a testament to the raw power of Safety Net
Nation, which -- for now -- seems to be just saying no to more
financial risk.

=================================================================

"They want the federal government controlling Social Security like it's
some kind of federal program." - George W. Bush, Nov. 2, 2000

"Listen, government has got plenty of money." - George W. Bush, Feb. 3,
2004


Jerry Okamura
2005-05-08 20:57:44 EST

"MrPepper11" <MrPepper11@go.com> wrote in message
news:1115588435.543382.269710@z14g2000cwz.googlegroups.com...
BusinessWeek / May 16, 2005
"I Want My Safety Net"
Why so many Americans aren't buying into Bush's Ownership Society

George Silli, a 66-year-old waiter from suburban Philadelphia, had a
brush with President Bush's Ownership Society, and it was an experience
he'll not soon forget. Silli's psyche and his wallet still bear the
scorch marks of the 2000 market meltdown. He saw the value of his
mutual funds drop by 60% and is convinced that opening Social Security
to individual investing would produce similar results on a massive
scale. "If people are left to their own devices, we'll become top-heavy
with poor people," Silli says.

I do not know of any mutual fund that dropped so dramactically, unless it
was one of the specialty funds, or the very agressive growth fund.
Certainly you will not see that large a drop in an income fund. In the case
of speciality funds, it is not a a very wise decision to trust your
retirement future in a specialty fund. You have lost the major advantage of
a mutual fund and that is diversification. And it is a bad long term
investment strategy, if safety is a concern, because if that indusrty has
problems, all the companies in that industry will suffer. The other case
would be in a more aggressive mutual fund. But even then, it depends on
your time horizon, and how long it will be before you retire. Aggressive
mutual funds are by their very nature, volitile....that is why they are
called aggressive. But even here, volatility can be your friend, if your
investment time horizon is long enough. Because then the dollar cost
averaging phenomena kicks in, and that works best when there is volatility.
In either case, it is not a very smart investment choice to make, for where
you invest your retirement money, unless you are in it for the long haul and
it is certainly not a good idea, if you are close to retirement.

A political independent, Silli has learned enough about the market to
be pessimistic about a small fry's chances. He not only wants to leave
Social Security alone but also thinks politicians should expand
entitlements by mandating near-universal health insurance as a shield
against soaring medical bills.

Medical cost are rising because of this move to a third party payment
system. So, he is advocating a solution that will only add fuel to the
fire.



April Tsirigotis, a 30-year-old Republican and an information
technology executive from Lusby, Md., is a big fan of the President and
applauds his efforts to solve Social Security's fiscal woes. But, says
Tsirigotis, the divorced mother of a 7-year-old, "I disagree with the
idea of giving people private accounts in which their annual returns
and their eventual benefits would be based on the stock market. It's
too risky. No one knows how much will be there in the end."

She doesn't know what is going to be there for her when she reaches
retirement age either, with the existing system.


A Sept. 2-5, 2004, survey by the Civil Society Institute, a Newton
Centre (Mass.) nonprofit group, found 67% of Americans think it's a
good idea to guarantee health care for all U.S. citizens, as Canada and
Britain do, with just 27% dissenting. Support for a government-directed
universal insurance system is strong, despite GOP warnings about
socialized medicine. Similarly, a Feb. 3-5 Washington Post/Kaiser
Family Foundation poll found that 47% of respondents believe the
government ought to guarantee a minimum standard of living for
retirees, vs. 35% who felt that was an individual's responsibility.

That is because a whole lot of people do not know what the cost of such a
move will be. They think they will get a free ride, which they will not.




As income volatility has grown, government -- prodded by free-market
Republicans out to reverse the New Deal -- has been offloading ever
more responsibility onto individuals. The financial pressure has become
much more acute because of another squeeze occurring in the private
sector. Corporations vying to compete globally have steadily shifted
costs and responsibility for pensions and health care to their
employees as part of the restructuring wave that began in the 1970s.

That probably is true, but the employment picture is shifting, with large
corporations employing a smaller percentage of the workforce. And once
again, let me suggest that corporation would not be "shifting" more of their
healthcare cost to their workers, if the cost or providing that benefit is
not rising. This is one of those chicken and egg problems. The cost are
rising because we have moved more and more of our healthcare system to a
third party payment system, and as the cost rise, corporations in an attempt
to hold down the cost of operating, are shifting part of that cost to their
workers, but then they turn right around an support a third party payment
system, which is the reason for the cost increase.

The Sellathon That Didn't

Conservatives see disentitlement as a recognition of new economic
realities -- and the death rattle of the Nanny State. But skeptics,
among them prominent New Democratic thinkers, counter that America's
safety net can be both modern and market-based without piling still
more financial burdens onto the stooped shoulders of Joe and Jane
Average.

Kind of inconsistent it seems to me. If you support bigger government,
doesn't that automatically mean that the government has to fund that
increase in spending through the taxpayer?

Because social engineering through tax breaks, preferential loan and
savings plans, and other indirect subsidies favors those with good jobs
and income to invest, New Democrats advocate policies that tilt savings
incentives toward lower-income Americans. They include universal
401(k)s, compulsory savings plans set up for kids, and mandated social
insurance -- a subsidized rainy-day fund for financial emergencies.
Hacker is working on "a kind of catastrophic insurance plan that could
be administered by the private sector but heavily regulated by the
government." Employers would be required to match employee
contributions to the new financial umbrella. The price tag, he
concedes, "would not be trivial" -- meaning a multibillion-dollar
commitment.

The more I think about this, the more I am convinced that the best solution
to the problem is what Milton Friedman advocated many years ago, and that is
a negative income tax. Simple solution to those who do not have some
"floor" of income. Don't know what the social impact of that would be, i.e.
what disincentives that will offer for people to make a better life for
themselves, but it is an idea worth exploring. And it is relatively cheap
to implement as well.



Trouble is, the President, in his guise as Salesman-in-Chief, may have
done too good a job raising alarms about Social Security's imminent
implosion. "Bush said, 'We're going to have a crisis,' and offered
private accounts as part of the solution," says James K. Glassman, an
American Enterprise Institute scholar. "But the two things are really
separate, and the President was never able to make a connection between
them." What's more, the crisis-mongering only served to heighten
anxiety among the risk-averse cohort.

I will make the connection. If enough people set aside money in a personal
account, and if it does as well as the supporters think it will, that means
more people will be less dependent on the income derived from social
security. If that happens, then some time in the future, whatever fix you
have to implement will be less painful because there will be less people who
will rely on that as their sole source of income in their retirement years.



Down on Wall Street

Objectively, this is not a bad time to be raising the issue of reform.
Baby boomers are about to retire en masse and on paper, family balance
sheets have improved. Americans' household wealth has floated upward of
late, propelled by recovering stock valuations and soaring real estate
values. Moreover, real wages for the civilian workforce have grown 8%
in the past decade after a long stretch when they fell. And the family
poverty rate, tallied at 10% in 2003, has improved from the 13.9%
numbers recorded four decades earlier.



While federal spending on the safety net for the poor has grown
briskly, it hasn't kept pace with society's needs. Medicare is
straining to cover seniors' bills, and some states are downsizing
Medicaid programs. In 1996, strict time limits were put on welfare
dependency, a step that slashed the rolls by half. Meantime, huge holes
have been ripped in the private safety net as the cost shift to workers
has accelerated.

That is solely due to medcial price inflation. And as I have argued for the
longest time now, the solution to that problem does not lie in giving more
people relatively free access to healthcare....it only makes the situation
worse.

The result is riskophobia. "With a far greater portion of family
budgets devoted to the mortgage, car payment, and health insurance, a
transitory shock to wages becomes much more menacing," says Raj Chetty,
a University of California at Berkeley economics professor who studies
risk. "Equities are seen as risky, and if people aren't jumping for the
investment option [as part of Social Security reform], there's a
reason. Risk in general has become a much more pervasive issue."

There is a simple test for this hypothesis. Is the money flowing to mutual
funds dimishing or growing.

In January, 2000, before the dot-com bubble burst, 67% of Americans
said that if they had $1,000 to spare, investing it in stock would be a
good idea, according to the Gallup Poll. By April, 2005, that
percentage had fallen to 45%, with 51% saying the stock market would be
a bad choice. Among the groups whose faith in the market dipped most
are three key Bush constituencies: baby boomers, college grads, and
suburbanites.

It is not very smart to try and pick and choose stocks on your own, unless
you have a large amount of money that allows you the safety net that
diversification gives you. You cannot get a whole lot of diversification if
you do not have a whole lot of money. That is why the mutual fund industry
thrives, because smart people know that they offer the safety net of
diversification, that most individual investors cannot achieve on their own.


The not-as-well-fixed Net Setters want some bedrock guarantees in
turbulent times, too. Private Social Security accounts? Sure, in
addition to core benefits. Portable medical savings accounts? Fine, but
not as a replacement for employer-provided health insurance. "They want
the Ownership Society -- but they want it with a warranty," says
Representative Rahm Emanuel (D-Ill.), who has introduced legislation to
expand tax credits for lower-tier families and to make college savings
easier.

Yep, that is only human nature, we want the benefits with no risk. Who
wouldn't want that?






Dave Simpson
2005-05-09 12:42:58 EST

Jerry Okamura wrote:

> A Sept. 2-5, 2004, survey by the Civil Society Institute, a Newton
> Centre (Mass.) nonprofit group, found 67% of Americans think it's a
> good idea to guarantee health care for all U.S. citizens, as Canada
and
> Britain do, with just 27% dissenting. Support for a
government-directed
> universal insurance system is strong, despite GOP warnings about
> socialized medicine. Similarly, a Feb. 3-5 Washington Post/Kaiser
> Family Foundation poll found that 47% of respondents believe the
> government ought to guarantee a minimum standard of living for
> retirees, vs. 35% who felt that was an individual's responsibility.
>
> That is because a whole lot of people do not know what the cost of
such a
> move will be. They think they will get a free ride, which they will
not.

They believe in a free lunch and government as magic genie and Mommy.
Note the sources!

Note also the character of such people. Those in government really
have created a dependent, childlike Herd among the US public.


Jean Smith
2005-05-09 14:58:59 EST
In article
<*0@z14g2000cwz.googlegroups.com>,
"Dave Simpson" <david_l_simpson@yahoo.com> wrote:

> Jerry Okamura wrote:
>
> > A Sept. 2-5, 2004, survey by the Civil Society Institute, a Newton
> > Centre (Mass.) nonprofit group, found 67% of Americans think it's a
> > good idea to guarantee health care for all U.S. citizens, as Canada
> and
> > Britain do, with just 27% dissenting. Support for a
> government-directed
> > universal insurance system is strong, despite GOP warnings about
> > socialized medicine. Similarly, a Feb. 3-5 Washington Post/Kaiser
> > Family Foundation poll found that 47% of respondents believe the
> > government ought to guarantee a minimum standard of living for
> > retirees, vs. 35% who felt that was an individual's responsibility.
> >
> > That is because a whole lot of people do not know what the cost of
> such a
> > move will be. They think they will get a free ride, which they will
> not.
>
> They believe in a free lunch and government as magic genie and Mommy.
> Note the sources!
>
> Note also the character of such people. Those in government really
> have created a dependent, childlike Herd among the US public.

How would you educate folks about the markets so they don't had
their money to folks who want to take their money and nibble away
at it?

--
http://www.abc.net.au/news/newsitems/200504/s1351244.htm http://sfgate.com/cgi-
bin/article.cgi?file=/news/archive/2005/04/29/national/a130837D16.DTL
http://tinyurl.com/cf2u5 | Society's Disasterous
Decisions http://www.edge.org/3rd_culture/diamond03/diamond_index.html

Tobin
2005-05-09 15:46:34 EST


They believe in a free lunch and government as magic genie and Mommy.
Note the sources!

Note also the character of such people. Those in government really
have created a dependent, childlike Herd among the US public.

---------------------------------

Maybe we should close some more VA hospitals, eliminate VA
mortgages and the rest of the "free lunch" that veterans depend on and
see who the "dependent, childlike herd" is.


Dave Simpson
2005-05-09 19:50:22 EST

Jean Smith wrote:

> How would you educate folks about the markets so they don't had
> their money to folks who want to take their money and nibble away
> at it?

This has been done already. To the extent that there are incompetent
people that still will hand the money away, the last resort is a set of
TV
commercials by the gummint in paternalistic language (or maternalistic
if you demand equality) telling the little children that they should be
very
careful before giving their money to strangers.


Dave Simpson
2005-05-09 19:51:45 EST
> Maybe we should close some more VA hospitals, eliminate VA
> mortgages and the rest of the "free lunch" that veterans depend on
and
> see who the "dependent, childlike herd" is.

False analogy. At least with vets, there really is something of a
real
obligation, reciprocation for devotion to duty.


Mike Craney
2005-05-09 20:13:13 EST

"Dave Simpson" <david_l_simpson@yahoo.com> wrote in message
news:1115682622.253546.93120@o13g2000cwo.googlegroups.com...
>
> Jean Smith wrote:
>
> > How would you educate folks about the markets so they don't had
> > their money to folks who want to take their money and nibble away
> > at it?

It's a fair question. To that end, I've created a website where people can
see what a well-balanced, risk-mitigated, (relatively) high-return portfolio
looks like. Over time, I'll be enhancing the site to explain why one invests
in certain things, and how risk/reward ratios work.

Mike

http://www.geocities.com/mike_craney/portfolio.html





>
> This has been done already. To the extent that there are incompetent
> people that still will hand the money away, the last resort is a set of
> TV
> commercials by the gummint in paternalistic language (or maternalistic
> if you demand equality) telling the little children that they should be
> very
> careful before giving their money to strangers.
>



Dick Zielinski
2005-05-09 20:33:32 EST
On Tue, 10 May 2005 00:13:13 GMT, "Mike Craney" <mcraney@hotpop.com>
wrote:

Mike: can we safely assume that you are currently a multi-billionaire?
You know... Given that you are such an expert on how everybody should
invest their money...

Dick



>
>"Dave Simpson" <david_l_simpson@yahoo.com> wrote in message
>news:1115682622.253546.93120@o13g2000cwo.googlegroups.com...
>>
>> Jean Smith wrote:
>>
>> > How would you educate folks about the markets so they don't had
>> > their money to folks who want to take their money and nibble away
>> > at it?
>
>It's a fair question. To that end, I've created a website where people can
>see what a well-balanced, risk-mitigated, (relatively) high-return portfolio
>looks like. Over time, I'll be enhancing the site to explain why one invests
>in certain things, and how risk/reward ratios work.
>
>Mike
>
>http://www.geocities.com/mike_craney/portfolio.html


Big Gun
2005-05-09 21:12:24 EST
On Mon, 09 May 2005 18:58:59 GMT, Jean Smith <gotermite@yahoo.com>
wrote:

>How would you educate folks about the markets so they don't had
>their money to folks who want to take their money and nibble away
>at it?

It's not as serious as you think. It's voluntary to invest or not and
if you do the plan is the TSP which is the govt retirement account all
federal employees have available. There are only a handful of the
safest funds and a bunch of bonds.
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