Social Security, stocks link carries risk

[papau]

http://www.boston.com/business/personalfinance/articles/2005/02/02/social_security_stocks_link_carries_risk/

Social Security, stocks link carries risk
By Charles Stein, Globe Staff | February 2, 2005

Third in a series of occasional articles examining the economic and political stakes involved in the Bush administration's proposed overhaul of Social Security.

Over the past 80 years, owning stocks has been a good deal for investors. On average, stocks have returned about 10 percent a year since 1926.

So if Americans invest in stocks through private accounts as part of an overhaul of the Social Security system, they can expect returns of around 10 percent, right?

Not necessarily, say many academics and economists, who concede that while market investments may perform well in the future, good returns are far from guaranteed.

''It is not as if they are a fact of nature," said Robert Shiller, a Yale University economist.

Over the long run, the ''total return" from stocks (meaning their dividends plus price appreciation) easily beat more conservative investments like government bonds. But stocks have higher risk. And when those risks are properly accounted for, say economists, the returns don't look anywhere near as good.<snip>

[havocmom]

1. When CEOs are more concerned with selling paper (stocks) than with

providing goods/services the business is supposedly doing and sound long range policies regarding business/employee responsibilities, too many companies are not worth investing in.

They aren't 'taking care of business' anymore. They are just looking for investors. They have blown off/fleeced too many middle class and workers who invested and they are looking for a new pool of cash. They do not have any real ideas/innovations as far as creating product/service.

They are vampires looking for new blood.

[whistle]

3. It's the pyramid scheme/network marketing mentality of...

...today's CEOs. They are way overpaid relative to the products and services they produce and seem to carry no responsibility whatsoever to the customers of their businesses and those who work for the companies they run. The entire system of this house of cards will come crashing down around everyone and who will come out whole from this is anyones guess.

[havocmom]

4. ABSOLUTELY a pyramid scheme! And if they can't get more suckers,

err, investors into the game on a regular basis, it all comes down. You are SOOOOO right!

[whistle]

2. The democratic party must take a "zero tolerance" stand....

...on Social Security privatization and focus reform on getting all income classes to pay their fair share of the social security burden. There are over 130,356,000 non-farm employees earning an average of nearly $20.00 per hour. That represents $5,422,809,600,000.00 in wages of which social security contributions are 6.20% by the employee and 6.20% by the employer for a total of 12.40%. Applied across all wage earnings the annual contribution is $672,428,390,400.00 and with just over 37,300,000 social security recipients each receiving $840.00 or less per month $296,444,390,400.00 in surplus each year from now until forever.

So whats the beef, tell Bush and the republicans to go somewhere else to steal, perhaps from all of the churches that are receiving untold tax exemptions for political influence.