4x4 wrote:
MachineGhost wrote:
mathjak107 wrote:
they may end up severely under funded for that luxury and that is the danger.
There is no alternative. Load up on obscenely overvalued stocks? Load up on longest duration T-Bonds while they're at a 5,000 year low in interest rates, soon to reverse course starting in the next few days? Load up on a useless, barbarous lump of shiny metal that is no longer money, never will be again and will only have demand in that short period of time where confidence in government and the financial system has been lost but is still standing like a mirage?
Seriously man, you better plan for a SWR way below what you expect historically because neither stocks nor bonds are going to offer that for the next 17 years. Again, what is the alternative?
In reference to the portion above I bolded, truer words may have never been spoken.
Is there not ANY time in history we can look to to see how history will
rhyme this time around???
I think there is any number of different ways that things could work out for the better, and the idea that "the good times are over, and we're all screwed" is wrong.
Social Security/Medicare/Medicaid will bankrupt the US!
The most common age in America is now 22! With the 2nd and third most common ages being 21 and 23!
source. Although millennials may get the rap for having "bad work ethic" so has every other generation for every decade ever, and like it or not they are entering the workforce in droves. Like it or not old people die, and yes medical care in the US needs reform, but the baby boomers aside we are leveling out in population growth, and there is no reason to think that it won't remain solvent for years to come.
China/India/Brazil is going to overtake us and we will all be broke!
The list of former economic superpowers [Germany, Britain, etc...] has a long list of problems, but life went on in those countries, and life will continue in the US. Of course China will overtake us in terms of economic output, they outnumber us 3 to 1, how could they not? It will take time, and there is no reason that even if not the #1 economy in the world that the US will not continue to be prosperous and to provide one of the highest standards of living the world over.
Climate change will kill us all
The good news is many people are waking up to the reality that you can't just take trillions of tons of carbon out of the ground light it on fire and say "nah that won't cause any change at all!" If scientific data is correct (and I know some reading this would question it) then yes, there will be problems in the future and pipers to pay, but the US is better positioned than most countries to deal with it (sorry Bangladesh you are done for.)
The US will go Japanese and deflation ad nauseum.
There are any number of reasons this won't happen, most of which are too complex to get into on a single comment ranging from exports/natural resources, to birth rates, to immigration and exchange with other countries. Even if the US does go Japan and deflation continues, the fact is that many reading this are still much better off than their fellow man/ rest of the country.
Terrorists will kill us all.
There are many fewer terrorists than you might think.
Nuclear war with Russia.
Well that's always a possibility, but I don't really think Russia wants that. At the moment most Russians just want to be able to afford toilet paper.
AND ON AND ON IT GOES!
Back in the "glory days" of the US we had just emerged from WWII, where unemployment was 0%. We had the highest debt to GDP ratio ever, we went off the gold standard, we were in constant fear of A-bombs falling "Duck and Cover anyone?", we were certain the world would end at any moment, and what followed? One of the greatest technological and financial growth periods in modern history. The US went from the superpower that saved the world, to the superpower that owned the world!
I think far too many people look at history, they see 4% as the safe return from the over 100 years of stock market history, and they think, "yea, that'll never last, this time is different."
I think the PP does a great job at providing economic safety in the worst of times, and decent prosperity in the best. Living in a country that supports free-markets, living below your means, investing the rest, and saving for the future -- these are some of the core tenants of the PP, and they will work.
Perhaps there are dark times ahead, but in the words of Albus Dumbledore ~ "Happiness can be found, even in the darkest of times, if one only remembers to turn on the light.'
