Peter Schiff Was Right (again)

[moda0306]

I can meet my mandatory expenses from Social Security.

Wouldn't that be ironic!

(Though, I certainly hope it doesn't come to that for you)

I'm not sure why it would be ironic. I have been forced to pay into the SS pyramid scheme for my whole life; if I had my "contributions" and my employer "contributions", I could have bought a real annuity that would pay about the same amount per year. But since I didn't have a choice as to "participating", I see no problem with getting as much of my money back as possible. (Yes, I know it was spent already, so you don't have to enlighten me on that.)

And I think it is very unlikely that it will come to that, as I have substantial other assets that I could tap if necessary. However, the longer I can postpone that, the better off I will be overall.

But since the money isn't there, the government has to steal from me to pay your SS benefits.  You're taking your resentment of others having stolen from you to justify stealing as much from me as you can get away with.

That's not very libertarian of you, tech.  Sure sounds like you're advocating the use of force to have me pay you for what you had stolen from you.

I'm afraid this loses you another 1,000 liberty points.

And if I ever see a picture of you holding a poster saying "GOVERNMENT, GET YOUR HANDS OFF MY MEDICARE," I might have to deduct you 10,000 points.

I kid.

[Pointedstick]

I'm imagining that these are the liberty points:



Of course they have to be physical; no fiat here!

[Pointedstick]

My proposed change for Social Security is that anyone anytime can opt out of the system in exchange for never ever being able to collect, essentially forfeiting all the money they were already taxed. People who had been paying into the system for a few years or more who opted out would basically represent a 100% win for the government since these people could be written out of the pool of future payees. I would allow the same terms for Medicare. This proposal could be pitched as a way to shore up the systems since there would be fewer people collecting.

[Mdraf]

My proposed change for Social Security is that anyone anytime can opt out of the system in exchange for never ever being able to collect, essentially forfeiting all the money they were already taxed. People who had been paying into the system for a few years or more who opted out would basically represent a 100% win for the government since these people could be written out of the pool of future payees. I would allow the same terms for Medicare. This proposal could be pitched as a way to shore up the systems since there would be fewer people collecting.

Nice try but it would fall apart as soon as CNN started running specials on granny eating cat food.

I also think that once they put Obamacare to bed the Democrats will be going after 401Ks, IRAs, SEP-IRAs etc like some European countries are doing. The first move will be an "option" for people to convert their various holdings into T-bonds.  Eventually the option will become an obligation.

[moda0306]

My proposed change for Social Security is that anyone anytime can opt out of the system in exchange for never ever being able to collect, essentially forfeiting all the money they were already taxed. People who had been paying into the system for a few years or more who opted out would basically represent a 100% win for the government since these people could be written out of the pool of future payees. I would allow the same terms for Medicare. This proposal could be pitched as a way to shore up the systems since there would be fewer people collecting.

Nice try but it would fall apart as soon as CNN started running specials on granny eating cat food.

I also think that once they put Obamacare to bed the Democrats will be going after 401Ks, IRAs, SEP-IRAs etc like some European countries are doing. The first move will be an "option" for people to convert their various holdings into T-bonds.  Eventually the option will become an obligation.

Mdraf,

Do your really think that any admin, democrat or republican, would upset that Wall Street trough that is 401k plans?  They may have different methods of showing it, but both sides love Wall Street.  There'd be so little to be gained by forcing people to buy treasuries when they can control their own debt market.

[Mdraf]

My proposed change for Social Security is that anyone anytime can opt out of the system in exchange for never ever being able to collect, essentially forfeiting all the money they were already taxed. People who had been paying into the system for a few years or more who opted out would basically represent a 100% win for the government since these people could be written out of the pool of future payees. I would allow the same terms for Medicare. This proposal could be pitched as a way to shore up the systems since there would be fewer people collecting.

Nice try but it would fall apart as soon as CNN started running specials on granny eating cat food.

I also think that once they put Obamacare to bed the Democrats will be going after 401Ks, IRAs, SEP-IRAs etc like some European countries are doing. The first move will be an "option" for people to convert their various holdings into T-bonds.  Eventually the option will become an obligation.

Mdraf,

Do your really think that any admin, democrat or republican, would upset that Wall Street trough that is 401k plans?  They may have different methods of showing it, but both sides love Wall Street.  There'd be so little to be gained by forcing people to buy treasuries when they can control their own debt market.

As you know I disagree that they control their own debt market so I stick to my assessment.  I know they both like Wall St but the time will come when they will have no choice.

[Libertarian666]

My proposed change for Social Security is that anyone anytime can opt out of the system in exchange for never ever being able to collect, essentially forfeiting all the money they were already taxed. People who had been paying into the system for a few years or more who opted out would basically represent a 100% win for the government since these people could be written out of the pool of future payees. I would allow the same terms for Medicare. This proposal could be pitched as a way to shore up the systems since there would be fewer people collecting.

Nice try but it would fall apart as soon as CNN started running specials on granny eating cat food.

I also think that once they put Obamacare to bed the Democrats will be going after 401Ks, IRAs, SEP-IRAs etc like some European countries are doing. The first move will be an "option" for people to convert their various holdings into T-bonds.  Eventually the option will become an obligation.

Mdraf,

Do your really think that any admin, democrat or republican, would upset that Wall Street trough that is 401k plans?  They may have different methods of showing it, but both sides love Wall Street.  There'd be so little to be gained by forcing people to buy treasuries when they can control their own debt market.

Oh, that's easy. All they have to do is pay Wall Street big commissions on the Treasury sales, et voila!

[MediumTex]

Nice try but it would fall apart as soon as CNN started running specials on granny eating cat food.

I also think that once they put Obamacare to bed the Democrats will be going after 401Ks, IRAs, SEP-IRAs etc like some European countries are doing. The first move will be an "option" for people to convert their various holdings into T-bonds.  Eventually the option will become an obligation.

Mdraf,

Do your really think that any admin, democrat or republican, would upset that Wall Street trough that is 401k plans?  They may have different methods of showing it, but both sides love Wall Street.  There'd be so little to be gained by forcing people to buy treasuries when they can control their own debt market.

Oh, that's easy. All they have to do is pay Wall Street big commissions on the Treasury sales, et voila!

There is more to it than just commissions.

Wall Street loves retirement plans because it gives them a huge pool of money to repeatedly profit from, and not just through commissions, but through the opportunity to always have "dumb money" to sell stocks to when they are high and to buy from when they are low.

If you read our PP book, you may recall the "401(k)asino" illustration, and that's not too far off the mark.  Wall Street loves suckers who will come into the casino without fully grasping the enormity of the house advantage and play basically until they are broke (or at least until they have severely underperformed the market, potentially for most of their careers).

The degree to which this makes mandatory treasury-backed annuities unlikely is hard to fully convey.  I'm telling you, though, it's DOA.  An optional treasury-backed annuity would actually be a REALLY nice option for a plan design like a 401(k), simply because most participants don't understand how to make a lump sum last a lifetime, but the insurance industry will strongly oppose this as well because it would seriously eat into their annuity business.

When I read the "government is going to confiscate retirement accounts" stories, I marvel at how little the reporters seem to understand how all of this works.

[Libertarian666]

Mdraf,

Do your really think that any admin, democrat or republican, would upset that Wall Street trough that is 401k plans?  They may have different methods of showing it, but both sides love Wall Street.  There'd be so little to be gained by forcing people to buy treasuries when they can control their own debt market.

Oh, that's easy. All they have to do is pay Wall Street big commissions on the Treasury sales, et voila!

There is more to it than just commissions.

Wall Street loves retirement plans because it gives them a huge pool of money to repeatedly profit from, and not just through commissions, but through the opportunity to always have "dumb money" to sell stocks to when they are high and to buy from when they are low.

If you read our PP book, you may recall the "401(k)asino" illustration, and that's not too far off the mark.  Wall Street loves suckers who will come into the casino without fully grasping the enormity of the house advantage and play basically until they are broke (or at least until they have severely underperformed the market, potentially for most of their careers).

The degree to which this makes mandatory treasury-backed annuities unlikely is hard to fully convey.  I'm telling you, though, it's DOA.  An optional treasury-backed annuity would actually be a REALLY nice option for a plan design like a 401(k), simply because most participants don't understand how to make a lump sum last a lifetime, but the insurance industry will strongly oppose this as well because it would seriously eat into their annuity business.

When I read the "government is going to confiscate retirement accounts" stories, I marvel at how little the reporters seem to understand how all of this works.

I think the government already has a plan like that. It's called, let me see now... oh yes, it's called Social Security.

[Mdraf]

You can use the same arguments about Obamacare but they rammed it through against the wishes of the insurance industry, big pharma, the AMA etc.
Your point about the average person not being able to nurse a 401k nest egg is absolutely true and that's where they will start...with a convincing argument.
France just started.

And techno is right. It will turn into Social Security II, and they will use the funds (leaving a lockbox) to spend and spend.  Asset "swap" be damned.

[Pointedstick]

Are you kidding? The insurance industry loved Obamacare. It forced everyone to buy their product! If anything, I think they're more likely to mandate that people set aside a percentage of their salary in 401ks. Wall St would jizz itself over something like that.

[MediumTex]

You can use the same arguments about Obamacare but they rammed it through against the wishes of the insurance industry, big pharma, the AMA etc.
Your point about the average person not being able to nurse a 401k nest egg is absolutely true and that's where they will start...with a convincing argument.
France just started.

And techno is right. It will turn into Social Security II, and they will use the funds (leaving a lockbox) to spend and spend.  Asset "swap" be damned.

Just take what I'm saying FWIW, but I live in this area professionally, and what's actually happening is WAY different from the way the media is portraying it.

As far as Obamacare and the insurance industry, I would say the insurance industry made out like bandits when you consider that a single payer system was a legitimate alternative.

[Libertarian666]

Are you kidding? The insurance industry loved Obamacare. It forced everyone to buy their product! If anything, I think they're more likely to mandate that people set aside a percentage of their salary in 401ks. Wall St would jizz itself over something like that.

Right on all counts.

[Mdraf]

, but I live in this area professionally, and what's actually happening is WAY different from the way the media is portraying it.

I didn't know that. In that case I defer to your judgement. But aren't the insurance companies now obligated to refund premiums if they exceed some ratio of benefits? And since they will have to cover pre-existing how in the world can they calculate and do any budgeting?

[Pointedstick]

Are you kidding? The insurance industry loved Obamacare. It forced everyone to buy their product! If anything, I think they're more likely to mandate that people set aside a percentage of their salary in 401ks. Wall St would jizz itself over something like that.

Right on all counts.

I could very easily see a Social Security opt-out that came at the expense of being required to save 6% in a 401k. Perhaps a part of this hypothetical law would mandate a percentage of wall street profits made on these 401ks be directed into the social Security Trust fund. That sounds like exactly the sort of cronyistic, corportist law that seems very possible to me.

[Kshartle]

Are you kidding? The insurance industry loved Obamacare. It forced everyone to buy their product! If anything, I think they're more likely to mandate that people set aside a percentage of their salary in 401ks. Wall St would jizz itself over something like that.

Right on all counts.

Time will tell if that's true.

I disagree personally. Many will opt and take the penalty. Many employers are going to drop healthcare offerings if they can and people would be smart to not buy any.

Since there is no pre-existing condition requirement you can just wait until you're sick to buy. Insurance is being made largely obsolete by Obamacare.

I think this is going to destroy private insurance and is paving the way for complete government take over of another industry. It will do as good with it as it does with others.

[MediumTex]

, but I live in this area professionally, and what's actually happening is WAY different from the way the media is portraying it.

I didn't know that. In that case I defer to your judgement. But aren't the insurance companies now obligated to refund premiums if they exceed some ratio of benefits? And since they will have to cover pre-existing how in the world can they calculate and do any budgeting?

I'm mostly talking about the retirement plan side, but the caps on insurance profits under Obamacare are not that big a deal when you consider that the alternative was NO profits (or vastly reduced profits) under a single payer system.

As far as doing projections, it's not a big deal once you know the risk pool you are insuring.

[MediumTex]

Are you kidding? The insurance industry loved Obamacare. It forced everyone to buy their product! If anything, I think they're more likely to mandate that people set aside a percentage of their salary in 401ks. Wall St would jizz itself over something like that.

Right on all counts.

Time will tell if that's true.

I disagree personally. Many will opt and take the penalty. Many employers are going to drop healthcare offerings if they can and people would be smart to not buy any.

Since there is no pre-existing condition requirement you can just wait until you're sick to buy. Insurance is being made largely obsolete by Obamacare.

I think this is going to destroy private insurance and is paving the way for complete government take over of another industry. It will do as good with it as it does with others.

How is the requirement that everyone purchase insurance going to destroy the insurance industry?

If I were an insurance company, I would be tickled pink to have the IRS as my collection agency telling people to buy my product or go to jail.

Has the universal requirement that drivers buy liability insurance been bad for the car insurers?  Judging by GEICO's lavish spending on entertaining commercials I would say that the margins in that business are large and they are very much enjoying the government mandate to buy car insurance as a condition of being a driver.

[Pointedstick]

Obamacare basically said to the insurers, "we'll make everyone buy your product if you stop turning some people away." Car insurance is already like that. Having a couple of accidents on your record is the "pre-existing condition" of the auto world.

It seems to work much better for car insurance though. My policy is barely $40 a month for one car and two drivers. Totally affordable. I sincerely doubt my hypothetical Obamacare premium is going to be any less than ten times that amount.

[Kshartle]

Right on all counts.

Time will tell if that's true.

I disagree personally. Many will opt and take the penalty. Many employers are going to drop healthcare offerings if they can and people would be smart to not buy any.

Since there is no pre-existing condition requirement you can just wait until you're sick to buy. Insurance is being made largely obsolete by Obamacare.

I think this is going to destroy private insurance and is paving the way for complete government take over of another industry. It will do as good with it as it does with others.

How is the requirement that everyone purchase insurance going to destroy the insurance industry?

If I were an insurance company, I would be tickled pink to have the IRS as my collection agency telling people to buy my product or go to jail.

Has the universal requirement that drivers buy liability insurance been bad for the car insurers?  Judging by GEICO's lavish spending on entertaining commercials I would say that the margins in that business are large and they are very much enjoying the government mandate to buy car insurance as a condition of being a driver.

It's not a requirement. You can just pay a much less expensive penalty and buy insurance when you're sick. Of course then it's no longer insurance, it's a loss to the "insurer". People will figure that out quick I think.

[Kshartle]

Right on all counts.

Time will tell if that's true.

I disagree personally. Many will opt and take the penalty. Many employers are going to drop healthcare offerings if they can and people would be smart to not buy any.

Since there is no pre-existing condition requirement you can just wait until you're sick to buy. Insurance is being made largely obsolete by Obamacare.

I think this is going to destroy private insurance and is paving the way for complete government take over of another industry. It will do as good with it as it does with others.

How is the requirement that everyone purchase insurance going to destroy the insurance industry?

If I were an insurance company, I would be tickled pink to have the IRS as my collection agency telling people to buy my product or go to jail.

Has the universal requirement that drivers buy liability insurance been bad for the car insurers?  Judging by GEICO's lavish spending on entertaining commercials I would say that the margins in that business are large and they are very much enjoying the government mandate to buy car insurance as a condition of being a driver.

It's nothing like car insurance. I can't buy a Geico policy after I crash my car and have them pay for the repair.

[Libertarian666]

Time will tell if that's true.

I disagree personally. Many will opt and take the penalty. Many employers are going to drop healthcare offerings if they can and people would be smart to not buy any.

Since there is no pre-existing condition requirement you can just wait until you're sick to buy. Insurance is being made largely obsolete by Obamacare.

I think this is going to destroy private insurance and is paving the way for complete government take over of another industry. It will do as good with it as it does with others.

How is the requirement that everyone purchase insurance going to destroy the insurance industry?

If I were an insurance company, I would be tickled pink to have the IRS as my collection agency telling people to buy my product or go to jail.

Has the universal requirement that drivers buy liability insurance been bad for the car insurers?  Judging by GEICO's lavish spending on entertaining commercials I would say that the margins in that business are large and they are very much enjoying the government mandate to buy car insurance as a condition of being a driver.

It's not a requirement. You can just pay a much less expensive penalty and buy insurance when you're sick. Of course then it's no longer insurance, it's a loss to the "insurer". People will figure that out quick I think.

Only until they make it illegal not to buy.
You read it here first.

[Kshartle]

You guys need to remember the story about A taking from B to give to C.

B will not stand still.

B is the young and healthy and C are the sick and old.

Obamacare is just a big welfare scheme. It will fail and take the insurance industry down with it to pave the way for total federal take over.

Don't focus on the mandate alone. Focus on the fact that the insurers are now in the welfare business.

[MediumTex]

It's nothing like car insurance. I can't buy a Geico policy after I crash my car and have them pay for the repair.

You can't do that this with insurance under Obamacare either.

If I break my arm and go to the hospital and have it set and a cast put on it and go buy an Obamacare policy the next day, they aren't going to pay anything on my broken arm claim for the services I received at the hospital before I bought the policy.

What you are talking about is if I'm a reckless driver (i.e., likely to have a lot of claims) and a I wreck my car today and go buy a car insurance policy tomorrow, are they going to cover the claims from my reckless driving going forward from the effective date of my policy, and the answer is yes.

Think of having cancer as being a reckless driver.

[Kshartle]

It's nothing like car insurance. I can't buy a Geico policy after I crash my car and have them pay for the repair.

You can't do that this with insurance under Obamacare either.

If I break my arm and go to the hospital and have it set and a cast put on it and go buy an Obamacare policy the next day, they aren't going to pay anything on my broken arm claim for the services I received at the hospital before I bought the policy.

What you are talking about is if I'm a reckless driver (i.e., likely to have a lot of claims) and a I wreck my car today and go buy a car insurance policy tomorrow, are they going to cover the claims from my reckless driving going forward from the effective date of my policy, and the answer is yes.

Think of having cancer as being a reckless driver.

Yes I completely understand all this. Your analogy makes my point entirely.

Yes some emergency care might not be covered with a posthumous policy purchase, but this will not be a compelling reason for people to purchase insurance. Who is going to pay several thousand a year, just to be able to get some emergency care costs lowered? This is a by-product of insurance but not the main purpose. When people pay thousands in premiums annually it's for protection in the event of major debilitating diseases such as cancer which you mentioned.

There might be some people so foolish as to waste money getting covered for emergencies but emergencies are such a tiny part of overall medical costs I don't think it's going to be sufficient to compel people. Humans are smart enough to get this. Friends, family and others who understand that pre-existing conditions will not preclude them from getting insurance will be informing millions of people, particularly the young and healthy to not buy. If young people aren't buying into the welfare ponzi scheme how will insurance companies be able to afford the costs of old and sick welfare patients? They will go broke.

People figure out how to get over on the system ALL THE TIME.  Unless I’m misinterpreting the law this is a glaring loophole that many will try to exploit. Practically everyone wants everything for free. If people can wait until their sick to sign up and pay that’s what they’ll do. It’s what I intend to do.