Your Questions About What Is Driving The Stock Market Today

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Daniel asks…

can you liberals please explain this to me?

Is the Reagan Era Officially Over?

Sen. Chuck Schumer has called the recent Democratic takeover of Congress the end of the Reagan era.
Friday, December 1, 2006
Star Parker – Scripps Howard News Service

Sen. Chuck Schumer has called the recent Democratic takeover of Congress the end of the Reagan era.

If we believe a red flag that the Wall Street Journal has run up about a possible Republican capitulation with the new Democratic majority on Social Security reform, our own Republican president might prove Schumer right.

The Wall Street Journal, and other sources, now report that the Bush administration is expressing openness to forget the idea of private ownership as the basis for Social Security reform, and to work with Democrats to “save” Social Security as it is with tax increases and benefit cuts.

Badly needed reform of our wounded and limping Social Security system has been seriously hampered by what I call the politics of cynicism.

These politics are driven by politicians primarily motivated by protecting their own power and interests as opposed to those of their constituents.

What‘s my proof that Social Security reform is driven by this cynical brand of politics?

No one could possibly argue that Social Security is a good program today. If we did not have it, and any politician tried to propose it and get it passed, he or she would be laughed out of Washington.

Social Security is a unique government program in that every taxpayer can personally evaluate it by asking the simple questions – What am I paying, What am I getting, and Is it worth it?

The Heritage Foundation’s Social Security calculator tells me, for example, that a 25 year old male earning $31,000 can expect, based on the Social Security benefit he’ll receive, almost a negative one percent return on the money he puts in over his working life.

If he purchased a diversified portfolio of stocks and bonds over this same period with this same amount of money, this guy could get an annuity five to six times greater than this Social Security benefit. But even a bank CD would produce a monthly payment that could double Social Security.

There are other relevant points that anyone who has been following this debate can recite. With a private account this guy owns his money. Under Social Security, he doesn’t even have a legal right to the benefit. Which is material because the government is constantly changing the rules.

Can you imagine getting a letter from your bank or broker saying they are lowering the return on your investment because they can’t afford to pay you what they promised?

But, this is what is about to happen, again, with Social Security.

Not only are the returns to taxpayers negative, but they are guaranteed, beyond any question, to get worse. The system is bankrupt and can only continue in its current form through some combination of tax increases and benefit cuts. Which will drive what individuals get for what they put in even further south.

Why, then, does there seem to be a political consensus to save this monstrosity?

Politicians will tell you it’s because the American people want it. The polls say so.

And indeed they do. But the fact is taxpayers support this status quo out of fear and not knowledge.

Certainly, no sane individual would buy a program that has the personal investment economics that I just described.

When President Bush proposed changing the program to one of ownership and private accounts, the Democratic Party launched major league into the politics of cynicism. The message that working Americans heard was that they would be kicked off a government program guaranteeing them a payment at retirement in exchange for taking their money and investing it in the stock market.

Is it any wonder that many dived for cover?

I call this the politics of cynicism because there is not a single Democratic senator or congressman who would purchase an insurance policy with the type of legal and economic realities of Social Security. Shut the door and one by one they know the truth.

The Democrats’ campaign to “save Social Security” has really been a campaign to save their own butts.

To have endorsed the president’s reform would have been an endorsement of a fundamental move away from welfare state politics that has been the bread and butter of the Democratic Party.

Now, playing on fears and not the real interests of working Americans, and the inability of Republicans to stick to and sell their message, the Democrats have won.

The real victims are the low and middle income Americans whose hard earned money is being sucked into this black hole that will only get deeper and blacker. This is happening while Democrats bewail wage and wealth stagnation at the lower end of our income spectrum.

Is a Republican White House, for fear that it will look like it did nothing on Social Security, about to join Democrats in the ranks of the politics of cynicism?

The Reagan era is still alive for this writer. Let’s hope it’s still alive in the Bush White House.

Photo Copyright Getty Images

Copyright Scripps Howard News Service 2006
you want Bush to “work” with you but you pick the things you your self think is stupid and nobody would do. you just want to make sure the service state stays in tact is how I read it but Im a stupid conservative.
obviously not one of you read this….

Justin answers:

You are absolutely correct. I wonder how many congressmen have diversified portfolio’s, and why they don’t figure out a way to wean us off the Social Security to a system of mandatory private accounts. I’d bet most have mutual funds where they see 8-12% gains a year. Is it right that our money goes to retired people? Before I get labeled uncaring, I’ll tell people that I don’t want my children supporting me in retirement. I’d rather they invest the money in mutual funds for their own retirement.

Some numbers for some perspective. If you are employed and make merely 20k a year, you pay $1530 into social security and medicare a year. And your employer matches it. If that money, not the employer’s money, just the employee’s money went to a mutual fund, using very conservative figures (conservative small c) of 8% return, which is low, ask a broker, then from 20-60 years old, at retirement, you have $445,103 at retirement. Consider that is never getting a raise making over 20K a year. If you use the median income about 40K, at retirement you have, $890,206. Which a person can pass on to their children. And that is using the low 8% return.

Knowing this, how can politicians not be serious about private accounts? This shouldn’t be about Republicans and Democrats, it should be about the numbers.

Joseph asks…

Do you believe – Obama Is In Trouble?

Tapscott’s Copy Desk – Obama Is In Trouble

POSTED March 6, 2009 | 5:13 PM

Did you feel it? The political ground shifting beneath President Barack Obama since his speech last week to Congress? It’s been downhill since and I’m not referring mainly to the Dow Jones record-setting dive. The pivot point of the shift was the speech, or rather what the speech did to the evolving public narrative of Obama.
Let’s review:
* Since the first of the year, Rush Limbaugh’s audience has exploded , according to Howard Kurtz of The Washington Post, even as his daily assaults on Obama have intensified. The conservative Talk Radio maestro has become quite possibly the most listened-to radio personality in America since before Paul Harvey (God rest his soul).
Demand for his air time hs suddenly become so intense, Limbaugh told The Examiner’s Byron York earlier today, that his network sold 80 percent as much advertising in January 2009 as it did in all of 2008, and expects to sell-out the year by the end of March. That was before Obama and White House chief of staff Rahm Emanuel launched an explicit counter-attack against Limbaugh that seems only to be making him bigger.
* Glenn Beck’s eminently forgettable presence on CNN has been transformed, according to The Los Angeles Times, by his move to Fox News where his main theme has been variations on this question – Wake Up! Wake UP! What in Heaven’s name does Barack Obama think he is doing to America? Beck has a tough time slot from which to win big ratings because he’s in the middle of evening drive-time. Even so, in a very short period of time at Fox, his audience has grown to the point that it is now exceeded only by those of Bill O’Reilly and Sean Hannity.
* Obama remains personally popular with the public, but worries and even outright opposition to some of his cornerstone proposals are growing. Democrats in Congress are even beginning to express in public print their worries that Obama has reached too far with the $787 billion economic stimulus package, the $410 billion omnibus spending bill and the $3.6 trillion budget proposal (and the trillions more senior aides whisper are coming in further bailouts, loan guarantees, “tax cuts” that are really just grants, and other spending accountrements of Leviathan Unleashed.)
* Paralleling these developments, a potentially devastatng conservative case against Obama is coming together rapidly. Two influential columns this week tell the tale: On Thursday, Daniel Henninger offers this crucial observation in a WSJ piece otherwise devoted to asking why Republicans aren’t more eagerly and quickly taking advantage of the fact the Obama Democrats have all but declared war on the 75 percent of the U.S. economy that is private and therefore productive of the nation’s wealth:
“Beyond the stock market, there is a reason why, despite much goodwill toward his presidency, the Obama response to the faltering economy has left many feeling undone. There isn’t much in his plan to stir the national soul. It’s about ‘sacrifice’ now so that we can live for a future of small electric cars and windmills. This may move the Democratic Party’s faith communities, but it cannot revive a great nation. If the Democrats want to embrace market failure as a basis for their ideology, let them have it. As politics, it’s a downer.”
The second column appeared today in The Washington Post and was written by Charles Krauthammer. Obama’s mastery of public speaking has heretofore served to deflect attention away from the details of what he is actually proposing. And there is in those details, according to Krauthammer, a fundamental deception: Obama summons visions of catastrophe that are the result of too little government regulation of the financial markets and he offers as a solution vastly more government regulation of …. health care, energy and education.
The ‘day of reckoning’ has now arrived. And because ‘it is only by understanding how we arrived at this moment that we’ll be able to lift ourselves out of this predicament,’ Obama has come to redeem us with his far-seeing program of universal, heavily nationalized health care; a cap-and-trade tax on energy; and a major federalization of education with universal access to college as the goal.
“Amazing. As an explanation of our current economic difficulties, this is total fantasy. As a cure for rapidly growing joblessness, a massive destruction of wealth, a deepening worldwide recession, this is perhaps the greatest non sequitur ever foisted upon the American people,” Krauthammer said.
In other words, Krauthammer said, Obama tries to have it both ways, with the alleged errors of deregulation being compounded into the worst economic crisis since the Great Depression by America’s failure to nationalize health care, shift our economy to alternative energy sources and give everybody a free pass to college. Obama is trying to make the cause and the cure synonymous. “Clever politics, but intellectually dish

Justin answers:

We are in trouble for allowing Obama to be elected, and I agree with Krauthammer.

The media and the liberal lunatics have elected a marxist into office who doesn’t have a clue on how our great country can be successful, Obama ‘knows’ only one thing, how to WASTE Trillions upon Trillions of our hard earned money.

George asks…

For people who say “the GOP has no ideas,” what do you think about these?

In 2013, when President Mitch Daniels, former Indiana governor, is counting his blessings, at the top of his list will be the name of his vice president: Paul Ryan. The former congressman from Wisconsin will have come to office with ideas for steering the federal government to solvency.

Not that Daniels has ever been bereft of ideas. Under him, Indiana property taxes have been cut 30 percent and for the first time, Standard & Poor’s has raised the state’s credit rating to AAA. But in January 2010, Ryan released an updated version of his “Roadmap for America’s Future,” a cure for the most completely predictable major problem that has ever afflicted America.

Some calamities — the 1929 stock market crash, Pearl Harbor, 9/11 — have come like summer lightning, as bolts from the blue. The looming crisis of America’s Ponzi entitlement structure is different. Driven by the demographics of an aging population, its causes, timing and scope are known.

Funding entitlements — especially medical care and pensions for the elderly — requires reinvigorating the economy. Ryan’s map connects three destinations — economic vitality, diminished public debt, and health and retirement security.

To make the economy — on which all else hinges — hum, Ryan proposes tax reform. Masochists would be permitted to continue paying income taxes under the current system. Others could use a radically simplified code, filing a form that fits on a postcard. It would have just two rates: 10 percent on incomes up to $100,000 for joint filers and $50,000 for single filers; 25 percent on higher incomes. There would be no deductions, credits or exclusions, other than the health care tax credit (see below).

Today‘s tax system was shaped by sadists who were trying to be nice: Every wrinkle in the code was put there to benefit this or that interest. Since the 1986 tax simplification, the code has been recomplicated more than 14,000 times — more than once a day.

At the 2004 Republican convention, thunderous applause greeted George W. Bush’s statement that the code is “a complicated mess” and a “drag on our economy” and his promise to “reform and simplify” it. But his next paragraphs proposed more complications to incentivize this and that behavior for the greater good.

Ryan would eliminate taxes on interest, capital gains, dividends and death. The corporate income tax, the world’s second highest, would be replaced by an 8.5 percent business consumption tax. Because this would be about half the average tax burden that other nations place on corporations, U.S. companies would instantly become more competitive — and more able and eager to hire.

Medicare and Social Security would be preserved for those currently receiving benefits, or becoming eligible in the next 10 years (those 55 and older today). Both programs would be made permanently solvent.

Universal access to affordable health care would be guaranteed by refundable tax credits ($2,300 for individuals, $5,700 for families) for purchasing portable coverage in any state. As persons under 55 became Medicare eligible, they would receive payments averaging $11,000 a year, indexed to inflation and pegged to income, with low-income people receiving more support.

Ryan’s plan would fund medical savings accounts from which low-income people would pay minor out-of-pocket medical expenses. All Americans, regardless of income, would be allowed to establish MSAs — tax-preferred accounts for paying such expenses.

Ryan’s plan would allow workers under 55 the choice of investing more than one-third of their current Social Security taxes in personal retirement accounts similar to the Thrift Savings Plan long available to, and immensely popular with, federal employees. This investment would be inheritable property, guaranteeing that individuals will never lose the ability to dispose every dollar they put into these accounts.

Ryan would raise the retirement age. If, when Congress created Social Security in 1935, it had indexed the retirement age (then 65) to life expectancy, today the age would be in the mid-70s. The system was never intended to do what it is doing — subsidizing retirements that extend from one-third to one-half of retirees’ adult lives.

Compare Ryan’s lucid map to the Democrats’ impenetrable labyrinth of health care legislation. Republicans are frequently criticized as “the party of no.” But because most new ideas are injurious, rejection is an important function in politics. It is, however, insufficient. Fortunately, Ryan, assisted by Republican representatives Devin Nunes of California and Jeb Hensarling of Texas, has become a think tank, refuting the idea that Republicans lack ideas.

Justin answers:

Gee isn’t that nice. A $2,300 tax ‘break’ to help pay for a $350,000 major hospitalization bill.

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