2020 Elections

[Parasaurolophus]

A decent retirement residence (WITHOUT nursing care) runs $5k per MONTH around here. Any care needed on top of that could multiply that number.

Which is why you avoid going into for-profit elder care for as long as you possibly can (or: at all, if you can get into a government care facility). But the point is that you don't spend 30-40 years in there. And if you have $1 mil in savings, or earn more than 2% interest on your money, or get a pension/social security (or CPP) or whatever on top of it, you're more than good to go. With a million dollars, you're good to go for 16 years at $5k a month.

[clean]

Cry me a river and work until 65-75 like the rest of us, who then make do with meagre payments from investments, social security, and employer pensions (if we get them). If you have $2.5 mil socked away earning 2% interest, that still leaves you with $40k a year just from the interest. Plus your pension, etc.

But it's silly for us to just postulate wildly. Let's pick a plan and look at its costing mechanisms instead.

I am one of the new 401K (or 403b in my case) millionaires.  I have no pension of any kind.  What is in my account is all that I will have to live on for the rest of my life plus the life of my bride to be (10 years younger than I).  Further, my 403b account is far and above the largest asset I have.  Adding $10000 to my tax bill is a huge percentage increase in my tax rate, not to mention a huge increase in the actual tax bill. 

For someone earning $50,000, taxing 10K is already a 20% tax... on 50 Fucking K!!  I suppose that you will still tax them for their share of state and federal income taxex, not to mention sales and property taxes, otherwise who will you tax to educate the primary school aged children? 

Wealth and Income are not the same thing!  Would you argue that  anyone else living on 50K pay 20% of their income to educate other's children? 

[Parasaurolophus]

Cry me a river and work until 65-75 like the rest of us, who then make do with meagre payments from investments, social security, and employer pensions (if we get them). If you have $2.5 mil socked away earning 2% interest, that still leaves you with $40k a year just from the interest. Plus your pension, etc.

But it's silly for us to just postulate wildly. Let's pick a plan and look at its costing mechanisms instead.

I am one of the new 401K (or 403b in my case) millionaires.  I have no pension of any kind.  What is in my account is all that I will have to live on for the rest of my life plus the life of my bride to be (10 years younger than I).  Further, my 403b account is far and above the largest asset I have.  Adding $10000 to my tax bill is a huge percentage increase in my tax rate, not to mention a huge increase in the actual tax bill. 

For someone earning $50,000, taxing 10K is already a 20% tax... on 50 Fucking K!!  I suppose that you will still tax them for their share of state and federal income taxex, not to mention sales and property taxes, otherwise who will you tax to educate the primary school aged children? 

Wealth and Income are not the same thing!  Would you argue that  anyone else living on 50K pay 20% of their income to educate other's children?

You're right, wealth and income are separate. But if you have accumulated principle of $1 mil (presumably in addition to a home!), and you're earning $50k interest just by having it sit in a bank account, then I'm not at all worried about your retirement. I'd be even less worried about you in a country with a robust social safety net that included universal healthcare and elder care, as some candidates are proposing. All my worry is taken up by the hundreds of millions of people who are worse off than you.

And again, let's be clear. We're not discussing any actual plan. We're discussing numbers pulled out of the air. I'm not an actuary or an economist. I have no idea what the best way of funding the plan is. I'm simply pointing out that even with our magic air-numbers, it's doable. Smart people with experience and the appropriate training can hammer out details which will be broadly workable and will fairly distribute both the benefits and the costs. In particular, they can tell us how to fairly scale up so that the 1.3 million decamillionaires contribute more than the mere millionaires.

Under the current system, the costs are mostly externalized or offloaded onto the people least able to afford them. And that's a  recipe for misery.

[clean]

quote]Cry me a river and work until 65-75 like the rest of us, who then make do with meagre payments from investments, social security, and employer pensions[/quote]

I have saved and saved so that I do NOT have to "work until 65-75 like the rest of us".  Isnt it interesting that we are NOW advocating working until 75 when in other parts of this and the last forum, there are advocates for the return of Mandatory Retirement because the 'old people' should make way for the fresh blood... that the tenured owe a duty to make way for the new crop on the job market.  But then IF we do manage to scrimp and save our way to being a paper millionaire in wealth terms so that we live on 50K (less than median household income in the US), we have to pay 1% of our wealth each year; 20% of our meager earnings.  Oh, and social security, assuming our state pays into it and we qualify, is also taxed!  What a wonderful world you are creating. 

IF these are the new rules of the game then the 'winner' is the old fart that keeps on teaching, doing the bare minimum of research, and spends as much time as he/she desires on conspicuous consumption (lest we build taxable wealth) and traveling as much and as often as possible on short trips, as we wont be able to travel in the retirement we now wont enjoy... long weekends here, Christmas Break there, Summers somewhere else.... After all I must be relaxed enough to publish my one paper every 2 years or is the minimum 3 years?   Clearly this is the outcome that must be chosen to optimize the new objective functions  by taking 20% of the meager $50K in income derived from the evil one who dared acquire 2.5million in the example quoted above. 

Remember, that the $2.5 million is at least observable.  Those on a state pension have no such 'wealth'. They simply have a promised lifetime income. But that is not shown as a balance anywhere.  My balance is all that I have and when it is gone so is the income.  Someone who ends a 30 year career making 100K may be promised $60K a year in retirement benefits FOR LIFE, but they would not be subject to the $10K a year surtax because they will not, on paper, show the source of that income as wealth, so they are Not (evil) millionaires.
Oh, and should the market tank, so will my paper 403b status

[Parasaurolophus]

Once again: we're not talking about any actual plans. We're talking purely abstractly about numbers pulled from the air. As long as we're doing that, we're free to stipulate whatever we want. Pick a candidate's free college plan, and we can talk about its funding mechanisms in as much detail as you like (/as much detail as they've given us).

Here, I'll help. Here's the Sanders plan, and here's the Warren plan. Here's Biden's, and here's Buttigieg's.. Bloomberg's will be released later today.

Which one do you want to talk about? Or should we continue discussing this in purely abstract, made-up terms and then straw-man the candidates on that basis?

[mahagonny]

Most of us will live longer than we should. That runs into money. I'm giving this serious thought, regarding myself. We seem to think we owe it to the Almighty to stick around, often to the point of ridiculousness.

[dismalist]

Most of us will live longer than we should. That runs into money. I'm giving this serious thought, regarding myself. We seem to think we owe it to the Almighty to stick around, often to the point of ridiculousness.

Exactly, Mahagonny! Speaking with Bismarck: The trick is knowing when to stop. :-)

[marshwiggle]

Once again: we're not talking about any actual plans. We're talking purely abstractly about numbers pulled from the air. As long as we're doing that, we're free to stipulate whatever we want. Pick a candidate's free college plan, and we can talk about its funding mechanisms in as much detail as you like (/as much detail as they've given us).

Here, I'll help. Here's the Sanders plan, and here's the Warren plan. Here's Biden's, and here's Buttigieg's.. Bloomberg's will be released later today.

Which one do you want to talk about? Or should we continue discussing this in purely abstract, made-up terms and then straw-man the candidates on that basis?

Sanders and Warren both include:

Cancel all student loan debt for the some 45 million Americans who owe about $1.6 trillion and place a cap on student loan interest rates going forward at 1.88 percent.

Pocket change; easy-peasy

[Parasaurolophus]

Pocket change; easy-peasy

Well, that's money that's already been spent, so yeah. Easy peasy.

[marshwiggle]

Pocket change; easy-peasy

Well, that's money that's already been spent, so yeah. Easy peasy.

Already? By the students, yes, but it needs to be paid back to who they borrowed it from; or should the government just tell banks to eat the loss? That will certainly make government loan guarantees in the future worth their weight in rabbit pellets.

[Parasaurolophus]

Already? By the students, yes, but it needs to be paid back to who they borrowed it from; or should the government just tell banks to eat the loss? That will certainly make government loan guarantees in the future worth their weight in rabbit pellets.

We're quickly entering territory about which I know very little, so I'll gladly defer to those in the know. But my understanding is that the Federal Direct Student Loan Program is (1) directly administered by the federal government, and thus directly lends the money to students (in other words, it's already spent) and (2) is currently worth about $1 trillion.

[dismalist]

Already? By the students, yes, but it needs to be paid back to who they borrowed it from; or should the government just tell banks to eat the loss? That will certainly make government loan guarantees in the future worth their weight in rabbit pellets.

We're quickly entering territory about which I know very little, so I'll gladly defer to those in the know. But my understanding is that the Federal Direct Student Loan Program is (1) directly administered by the federal government, and thus directly lends the money to students (in other words, it's already spent) and (2) is currently worth about $1 trillion.

Marsh is right. While the money has already been spent, it was loaned; thus it must be paid back. The only question is who will pay it back -- to banks, to the government, to whomever. Who whom? :-)

[marshwiggle]

Already? By the students, yes, but it needs to be paid back to who they borrowed it from; or should the government just tell banks to eat the loss? That will certainly make government loan guarantees in the future worth their weight in rabbit pellets.

We're quickly entering territory about which I know very little, so I'll gladly defer to those in the know. But my understanding is that the Federal Direct Student Loan Program is (1) directly administered by the federal government, and thus directly lends the money to students (in other words, it's already spent) and (2) is currently worth about $1 trillion.

Marsh is right. While the money has already been spent, it was loaned; thus it must be paid back. The only question is who will pay it back -- to banks, to the government, to whomever. Who whom? :-)

For perspective, from thebalance.com:

The Iraq War was a military conflict that lasted seven years, from 2003 to 2011, and cost $1.06 trillion.

So the student debt is equal to the cost of the Iraq war. Would the same people who consider that amount of student loan forgiveness a bargain consider the Iraq war to be similarly inexpensive?

[Parasaurolophus]

Well, what were the returns on the Iraq war? Qui bono?

And who benefits/is harmed by loan forgiveness?


To my mind, one of those looks like an investment (with fairly predictable returns), and the other like setting money (and, more importantly, one million people, their country, and a whole region of the world) on fire. I know that Dick Cheney, Halliburton, and Blackwater did pretty well out of it, but I wouldn't consider that a victory for the American people.

[Anselm]

Most people will be able to pay off their loans on time.  A small minority are in trouble and need some relief.   In the long run we need to get to the root of the problem which is the high cost of higher ed and too many people spending too long in school.   If we can bail out the big banks and home owners then I think we can lend a hand to people drowning in debt.  Some of those loans never should have been allowed in the first place.  Bring back old fashioned fiduciary common sense in lending.     Just don't touch my retirement funds