Help me battle my teacher's indoctrination

[Low Key]

Good point. I forgot people in college always told 100% objective stories. Especially regarding things they disagree with. My bad.

[PLOlover]

[ QUOTE ]
In the heritage example you arent taking into account post-retirement cost of living adjusments, which increase the payouts.

[/ QUOTE ]

[ QUOTE ]
so 15 years retirement
paid in max min
290k 61k
15 year payout max min
376k 154k

so 10 years retirement
paid in max min
290k 61k
10 year payout max min
250k 103k

[/ QUOTE ]

lets take the max contrib, 10 year retirement. guy pays in 290k. now some of those dollars are 1960 dollars, some are 1980 dollars, etc. right or wrong? i'm not sure.

now take the payout of 250k. those are all in 2008 dollars. I'm pretty sure of that.

so my question is, can we convert the contributed to constant dollars? hard I know cause they're from all different years. now the payout dollars are already in constant 2008 dollars, which would be easy to convert to the standard constant 1982 dollars or whataever the benchmark is.

so it seems to me that
a) contrib 290k already in constant dollars in which case if they're in constant 2008 dollars then it's a simple 290:250 ratio in which case obviously you're getting a negative rate of return cause you're getting less back than you put in. also note if they are in constant dollars of any other (earlier) year, they will be worth more in constant 2008 dollars, so this is lowest possible.


b) contrib 290k is simple the sum of the dollars paid in at the time, which, when converted to constant 2008 dollars, would make it way bigger, at least 500k, which means the ratio would be 500:250, which means that in constant dollars for every dollar you put in you will get 50 cents back.

see where I'm going with this?

[ QUOTE ]
In the heritage example you arent taking into account post-retirement cost of living adjusments, which increase the payouts.

[/ QUOTE ]

yes but if 2088 monthly in 2008 is 3000 monthly in 2015, isn't that just another way of saying that in 2015 you get 2088 "2008" dollars?

[Low Key]

[ QUOTE ]
[ QUOTE ]
In the heritage example you arent taking into account post-retirement cost of living adjusments, which increase the payouts.

[/ QUOTE ]

[ QUOTE ]
so 15 years retirement
paid in max min
290k 61k
15 year payout max min
376k 154k

so 10 years retirement
paid in max min
290k 61k
10 year payout max min
250k 103k

[/ QUOTE ]

lets take the max contrib, 10 year retirement. guy pays in 290k. now some of those dollars are 1960 dollars, some are 1980 dollars, etc. right or wrong? i'm not sure.

now take the payout of 250k. those are all in 2008 dollars. I'm pretty sure of that.

so my question is, can we convert the contributed to constant dollars? hard I know cause they're from all different years. now the payout dollars are already in constant 2008 dollars, which would be easy to convert to the standard constant 1982 dollars or whataever the benchmark is.

so it seems to me that
a) contrib 290k already in constant dollars in which case if they're in constant 2008 dollars then it's a simple 290:250 ratio in which case obviously you're getting a negative rate of return cause you're getting less back than you put in. also note if they are in constant dollars of any other (earlier) year, they will be worth more in constant 2008 dollars, so this is lowest possible.


b) contrib 290k is simple the sum of the dollars paid in at the time, which, when converted to constant 2008 dollars, would make it way bigger, at least 500k, which means the ratio would be 500:250, which means that in constant dollars for every dollar you put in you will get 50 cents back.

see where I'm going with this?

[ QUOTE ]
In the heritage example you arent taking into account post-retirement cost of living adjusments, which increase the payouts.

[/ QUOTE ]

yes but if 2088 monthly in 2008 is 3000 monthly in 2015, isn't that just another way of saying that in 2015 you get 2088 "2008" dollars?

[/ QUOTE ]

You know what? I will paypal the OP $10 if he takes all this and reads it at his teacher, and videotapes the whole thing and puts it on youtube. Seriously. Ten bucks. And it could be any of the exceedingly long and detailed, broken down posts about social security, complete with numbers and everything. Ten bucks... Just something to consider.

If the teacher cuts him off and points out that it's not an Econ class, he only gets $5.

You'd have to include some footage proving it was the school you go to, but I'm not asking for much. Just a little proof.

[AlexM]

[ QUOTE ]
Good point. I forgot people in college always told 100% objective stories. Especially regarding things they disagree with. My bad.

[/ QUOTE ]

Of course, I never said anything like that. If the situation is as you describe, the OP is a complete retard, and I tend to put a low chance on complete retardation in any random person.

[Copernicus]

[ QUOTE ]
[ QUOTE ]
In the heritage example you arent taking into account post-retirement cost of living adjusments, which increase the payouts.

[/ QUOTE ]

[ QUOTE ]
so 15 years retirement
paid in max min
290k 61k
15 year payout max min
376k 154k

so 10 years retirement
paid in max min
290k 61k
10 year payout max min
250k 103k

[/ QUOTE ]

lets take the max contrib, 10 year retirement. guy pays in 290k. now some of those dollars are 1960 dollars, some are 1980 dollars, etc. right or wrong? i'm not sure.

now take the payout of 250k. those are all in 2008 dollars. I'm pretty sure of that.

so my question is, can we convert the contributed to constant dollars? hard I know cause they're from all different years. now the payout dollars are already in constant 2008 dollars, which would be easy to convert to the standard constant 1982 dollars or whataever the benchmark is.

so it seems to me that
a) contrib 290k already in constant dollars in which case if they're in constant 2008 dollars then it's a simple 290:250 ratio in which case obviously you're getting a negative rate of return cause you're getting less back than you put in. also note if they are in constant dollars of any other (earlier) year, they will be worth more in constant 2008 dollars, so this is lowest possible.


b) contrib 290k is simple the sum of the dollars paid in at the time, which, when converted to constant 2008 dollars, would make it way bigger, at least 500k, which means the ratio would be 500:250, which means that in constant dollars for every dollar you put in you will get 50 cents back.

see where I'm going with this?

[ QUOTE ]
In the heritage example you arent taking into account post-retirement cost of living adjusments, which increase the payouts.

[/ QUOTE ]

yes but if 2088 monthly in 2008 is 3000 monthly in 2015, isn't that just another way of saying that in 2015 you get 2088 "2008" dollars?

[/ QUOTE ]

Truthfully Im not following your verbal math. the important thing is the ROR on the contributions that equates to the payouts. (An actuarial equivalence is preferable to a simple "he lives 15 years", but its close enough).

Once you get that ROR, you compare it to reasonable rates of return (which include compensation for inflation). Converting to "constant dollars" is irrelevant, because the invested dollars were subject to exactly the same inflation whether they were invested privately or "invested" through the SS system. If youre going to adjust both scenarios the same way, theres no reason to adjust at all.

[jogsxyz]

[ QUOTE ]


His numbers of 1% vs 20-30% fees for public vs private handling of SS is ludicrous, and he should be embarassed for using them.

[/ QUOTE ]

That's 20 to 30 basis points or 0.2-0.3% fees. Vanguard manages money for 18 basis points.

[Seether]

Really who the hell are you to come and attack my character and insinuate I am lying while having no clue who I am? Before I had this teacher I would have thought I would have to be making this stuff up. He has managed to bring up his social security numbers vs wall street firms number in both of my classes. Also not once has he ever qualified anything he has said in the class as simply his opinion which I would have NO PROBLEM with at all. Really the way his tangents go once he starts he will hit like 10 different subjects in 10 minutes, make unsubstantiated claims about each topic and move on. And *gasp* I even agree with an occasional unsubstantiated claim. I would have no problem hearing his viewpoint if he wasn't blatantly intellectually dishonest.


Also since you seem to think that I am embellishing, what would be my motive? I really don't see what angle I could be pushing here.

[PLOlover]

[ QUOTE ]
Once you get that ROR, you compare it to reasonable rates of return (which include compensation for inflation). Converting to "constant dollars" is irrelevant, because the invested dollars were subject to exactly the same inflation whether they were invested privately or "invested" through the SS system. If youre going to adjust both scenarios the same way, theres no reason to adjust at all.

[/ QUOTE ]

ok just answer this.

guy pays in 290k dollars. if he lives ten years gov pays him 250k dollars. how is that a good deal?

------------

about inflation though, here's the question. two guys are sent to prison for 30 years.
a) works 15 years, and then prison for 30 years, then when he gets out he draws SS.
b) goes to prison for 30 years, works 15 years, when he gets out he draws SS.

for the sake of argument, let's say they both maxed out their SS contrib every year (white collar crim i guess).

same age.

do they get the same benefits? kinda sloppy question, length of investment differs too I guess.

[Low Key]

[ QUOTE ]
what would be my motive?

[/ QUOTE ]

Man you people really hate anyhow who's willing to play devil's advocate.

Your motive? Let's take a look at the thread's title: "Help me battle my teacher's indoctrination"

Working under the assumption that you merely disagree with your teacher (which I've never said I think is true, just that it's a possibility that those involved should consider), your motive could be to simply prove him wrong, or one up him, or however you want that phrased.

The only reason I think of this as a possibility is because of your own admissions. You claim he's wrong on these topics, but shortly after, you claim that you don't understand the topics very well.

If he's really brining up social security in his other class, the foreign relations one, he's just a friggin' nutter-butter.

As far as confronting him in class goes, I don't see that as being the most productive route. First, because it may be easy for you to become flustered while dealing with his inflamitory socialist views, while I'm sure he's had more than a fair share of students question him and honed his distract/change the topic/look at the cute puppy/I love children why don't you form of arguing. So, if you have so little belief that your fellow student body views this man as anything but a purely objective academic demigod, what are the chances that his BS way of arguing works on them too?

Second, he runs the class, so I bet he wouldn't be above pulling the "we need to move on to another subject" card.

Third, if you do get flustered but continue to prod, it may end up making you look like the big mean capitalist picking on the poor, down-trodden, worked his way up in this country immigrant. Granted, this is a great way to make lots of new Republican friends, but in the end, it may do more to hurt your point of view than to help it. (I of course use "may" here because I don't understand the whole situation as well as I could. None of us do, because we don't know what the other classmates think as of yet)

Maybe the best thing to do would be to record him saying some of these things, presenting them as anything but opinion, find proof that he's wrong, then present it to someone in charge at his dept at the school. Show how he's not presenting incorrect information as subjective. I bet someone there might care.

(See what I did here, I not only played devil's advocate by arguing against you, but also god's advocate, by arguing for you.)

[Copernicus]

[ QUOTE ]
[ QUOTE ]
Once you get that ROR, you compare it to reasonable rates of return (which include compensation for inflation). Converting to "constant dollars" is irrelevant, because the invested dollars were subject to exactly the same inflation whether they were invested privately or "invested" through the SS system. If youre going to adjust both scenarios the same way, theres no reason to adjust at all.

[/ QUOTE ]

ok just answer this.

guy pays in 290k dollars. if he lives ten years gov pays him 250k dollars. how is that a good deal?

------------

about inflation though, here's the question. two guys are sent to prison for 30 years.
a) works 15 years, and then prison for 30 years, then when he gets out he draws SS.
b) goes to prison for 30 years, works 15 years, when he gets out he draws SS.

for the sake of argument, let's say they both maxed out their SS contrib every year (white collar crim i guess).

same age.

do they get the same benefits? kinda sloppy question, length of investment differs too I guess.

[/ QUOTE ]

On the second question, assuming constant wage inflation, they get pretty much the same benefits, although 15 year careers dont max out on benefits even if they max out on earnings.

As far as the 290 vs 250 question goes, if those are the exact circumstances, then obviously he didnt make out well (although you still apparently understand that the 250 is understated because of the COLAs and that needs to be included in the analysis). More importantly, there are some participants in similar circumstances who pay in 290 and are paid 500 (married with a non-working spouse), others with eligible children who are paid more, and many who pay in a lot less, become disabled, and receive the same 250.
If you compare SS vs privatization, you also have those who take the 290 and turn it into 200, or 150. People generally suck at investing. There are also those who take the 290, turn it into 400, draw down equivalent amounts to their SS benefit, and then live to 100 but were broke when they were 90.

SS (like any annuity program) contains elements of insurance. You have picked the worst case to make your comparison.