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Tommy Thompson is My Generation's Best Bet

The last four years have been very frustrating for me as a youth. Under President Obama, I’ve seen the national debt and deficit skyrocket to unprecedented levels. I’ve seen him refuse to take action on the looming debt and entitlement crises. It is frightening to think that when I retire, programs like Medicare and Social Security will not be there to aid me unless they are reformed. Unfortunately for my generation, this President has kicked this and many other problems down the road.

Moreover, he passed a misguided healthcare law that will only burden the nation’s youth with more debt and more uncertainty regarding their healthcare. Obamacare’s negative effects will also carry over into the business world, where job creators fear that it will stagnate hiring. President Obama has simply failed to provide any hope for the future. Instead, he has placed us on a path of recklessness on which this country’s great reputation and public perception have only decreased. If I have any hope of succeeding, this needs to change.

The President is right when he says that this is a “Do-Nothing Congress.” It is the Democratically controlled U.S. Senate, however, that does nothing. It is the Senate that has blocked countless economic bills that the House passed. That being said, I am very confident that Tommy Thompson will be that crucial Senate vote to put this country back on a path of fiscal discipline and prosperity. He will draw upon his vast experience and robust record to kick-start the economy and repeal and replace Obamacare. He is the best candidate to help my generation because he has done it before. The Tommy years were great years for Wisconsin and we, the youth, would only benefit from having a man like that represent us. 

James R Hoffa

12:50 am on Wednesday, August 8, 2012

Your assessment of Obama and the Senate is dead-on - well done.

Thompson, however, is a mixed bag, which is why he is now facing a challenging three-way primary race. While the Thompson years were indeed pretty good years for the state at the time, they also greatly contributed to the debt burden that the state now faces today. Thompson also exponentially grew the size of the state government during his tenure.

While everyone is aware of the good things that he did for the state, including welfare reform, Tommy hasn't really demonstrated that he learned anything from the errors he made as governor. I believe this to be a critical mistake on his part during this race. He has also developed quite a love of the bottle.

While Neumann talks a good game, he just comes off as being untrustworthy and too self-absorbed.

While Fitzgerald is probably the most consistent candidate of those with a record that can be scrutinized, he has very little presence and traction going into this primary.

That leaves Hovde. Many like the 'fresh air' quality and real world experience that he brings to the race, much in the vein of Ron Johnson. The only thing upon which we can fairly assess Hovde is on the platform he's presented to us. If you like the platform, then perhaps you should think about giving Hovde a chance to prove himself to us.

Regardless of who wins the primary, ABB anyone but Barack, anyone but Baldwin, will apply come November!

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Randy1949

9:24 am on Wednesday, August 8, 2012

@JRH -- You forget that while Thompson 'reformed' welfare, he did it by making it worthwhile for a single mother on AFDC to work by providing what the low income jobs wouldn't -- BadgerCare, child-care subsidies, and food stamps. That actually costs the taxpayers more than just paying them to stay home and take care of their kids. It hasn't exactly encourage people to stop having children they can't afford to take care of either.

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mau

5:13 pm on Thursday, August 9, 2012

Obama just undid, by the power of the pen, the welfare reforms Tommy did on the State level and Clinton followed up on at the Federal level.

Again I agree, ABB.

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The Anti-Alinsky

10:48 am on Saturday, August 11, 2012

The idea behind Thompson's welfare reform was to get people into the workplace. This was supposed to relieve welfare roles while much of the cost to BadgerCare, child-care subsidies...Once they were at an acceptable level of self-sufficiency, they would no longer need ANY government support.

Typical of any program begun by Republican's the Democrats overloaded it with more supplements and exceptions that it is back to where it was in the 1980.

Agree, ABB

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Randy1949

10:57 am on Saturday, August 11, 2012

@Anti-Alinski -- Bull. Businesses just took advantage of things like BadgerCare to not pay less in benefits and salary so that more people needed those subsidies. Walmart, anyone?

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The Anti-Alinsky

9:09 pm on Saturday, August 11, 2012

Randy, the Bull is coming from your end. You cite Wal-Mart, but many of the people hired by Wal-Mart are not looking for full time work. They are the stay at home moms that are looking to pick up a few extra dollars while the kids are in school, or the retiree that is both bored and looking for a way to fund their vacations.

BadgerCare itself was originally not meant to survive this long. It was in fact the Democrats that have expanded the program. Another well intentioned and good idea corrupted by the Liberals into a bloated government program.

Randy1949

9:19 am on Wednesday, August 8, 2012

"It is frightening to think that when I retire, programs like Medicare and Social Security will not be there to aid me unless they are reformed."

That's what I believed when I was your age. (I assume you're younger.) Social Security was 'reformed' by doubling the FICA, and the resulting surplus promptly used to fund lower income taxes. You should be more afraid of the proposed 'reforms' to these programs than anything else.

By the time you're ready for retirement (and may your individual investments prosper, because, like me, you will need them) the Boomers will be gone. The donkey will have moved through the boa-constrictor, and the crisis of too few workers for every retiree will have passed. Don't kill the programs through 'reforms' that will only benefit Wall Street and the medical insurance industry.

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Ricardo Tapia

11:14 am on Wednesday, August 8, 2012

When my generation retires, Social Security will not provide for it like it did for past generations unless it is reformed. The Social Security Trust Fund is expected to run out in 2038 and at this pace, my generation will only receive around 2/3 the benefits that we earned. It is true, eventually demographics will adjust and the worker to beneficiary ratio will even out. However, there is no way to get around the fact that there are only three potential income earners for every retiree. This is in large contrast to the 16:1 ratio that once existed. I personally do not believe it is fair for my generation to have contributed so much to the system only to receive partial benefits in return. Thus, reform is the only route. Reforming this, and other entitlement programs, does not mean 'killing' them. I encourage you to be more optimistic about finding a viable solution. At this point, the most reasonable answer seems to be a partial privatization of Social Security. After all, this country cannot afford to dip into general revenues to cover the costs considering our massive debt. This article gives a much more in-depth explanation of the problem: http://dailycaller.com/2010/08/16/the-social-security-crisis-is-real/

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Randy1949

12:54 pm on Wednesday, August 8, 2012

@Ricardo Tapia -- I hope you realize that a large amount of that debt the country owes is to the SS trust fund. The surplus in the trust fund has been used to run the country for the past few decades, so I think turnabout is fair play. And what, exactly, do you mean by 'reform'? My idea of reform would be raising the income cap on SSI, because $106K is not what it used to be. Reform would also include a tightening of what is considered a 'disability'.

It's your generation I'm worried about -- paying the same FICA for lesser returns, although I'm beginning to hear some grumbling about 'taxpayers' having to support us greedy Boomers in our retirements. They forget we supported the generations before us. And seriously, any retirement plan must include both SSI and private savings that are invested at whatever risk the individual is comfortable with. We've seen that the stock market often doesn't provide a better rate of return than the government bonds the FICA is invested in.

As for Medicare, the voucher will be adequate only for younger retirees in good health. Imagine trying to make up the difference if your retirement income from SSI and IRAs is not that generous.

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CowDung

10:53 am on Thursday, August 9, 2012

Randy:

The proposed voucher can be used to buy Medicare. Why do you think that it won't be big enough to cover the costs for anyone but young and healthy retirees?

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Ricardo Tapia

11:54 am on Thursday, August 9, 2012

Randy, I realize that the SS Trust Fund is essentially a farce. Imaginary or not, though, once it runs out the situation will get far worse. Like I said, by reform I mean some form of partial privatization. The Ryan Plan is currently the best answer although I realize it is not perfect. Raising the income cap on SSI would seemingly only raise the debt since it is funded by general revenues. I agree with your statement on disabilities, though. Moreover, I do not think your generation is greedy at all. Your generation certainly supported others but you must admit that the burden is much heavier on my generation (I am 21 by the way).
I agree with your comment about the stock market's volatility; therein lies the biggest problem with privatization. It will inevitably favor those with the most financial flexibility. On the other hand, if played correctly, the market could yield much more money than any government bond. It would also greatly remove the burden currently placed on the back of the federal government and taxpayers. I, for one, am willing to take this risk, especially if it means saving the program.

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Ricardo Tapia

11:57 am on Thursday, August 9, 2012

By the way, Randy, I would definitely be interested in reading your blog. I would greatly appreciate it if you posted the link.

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Randy1949

12:11 pm on Thursday, August 9, 2012

Is the trust fund really a farce, Richard? If so, it's the biggest, most regressive tax hike ever foisted on the working classes, since FICA begins on the first dollar earned, and for my generation, it doubled. Supposedly, this was to provide for the Boomer 'bubble' once we all hit retirement age. By law, it's been invested at a fixed rate. I've learned over the course of my financial life never to sneer at fixed rates. They seem boring and inadequate -- until you experience spectacular losses. They are part of a balanced savings plan.

"Raising the income cap on SSI would seemingly only raise the debt since it is funded by general revenues."

Could you explain that statement? I don't quite follow. The income cap would mean the amount of earnings subject to FICA deductions. I don't see how that is funded by general revenues.

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Ricardo Tapia

12:26 pm on Thursday, August 9, 2012

Randy, by farce I meant that there is disagreement whether the Trust Fund has actually been kept intact or whether we have dipped into it to fund other operations. By law, of course, its funds should be solely reserved for SS.
To clear things up, are you saying that we should lift the cap on taxable income concerning the Social Security tax? The rich already see the smallest return on their contributions, granted they do not need it like others. On principle I would oppose this since it would amount to a tax increase. Furthermore, it would be a tough political sell, almsot impossible.

Johnny Blade

11:23 am on Wednesday, August 8, 2012

There will be a currency crisis way before SS goes under. They are devaluing the dollar at an astounding pace .. so you will get your SS check but it will not buy a damn thing

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morninmist

1:29 pm on Wednesday, August 8, 2012

Tammy has the mojo. Go Tammy GO!

Ashton Giese @Occupy6Nov
Yay! GO Tammy livewire.talkingpointsmemo.com/entries/poll-t… #wipolitics
about 4 hours ago
Ashton Giese @Occupy6Nov
Loving the new ad Tammy! Go Baldwin 2012 #wipolitics jsonline.com/blogs/news/164…

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Avenging Angel

5:09 pm on Wednesday, August 8, 2012

This is why the Dems have been getting their collective rear ends kicked.

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Steve ®

9:21 am on Thursday, August 9, 2012

Don't tell them, let them continue

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jukap29

10:16 am on Thursday, August 9, 2012

i love watching social networking monkies who think they're tweets and likes actually mean anything...

feigned outrage and raised awareness accomplish a lot of hopey changey BS and we see what that's gotten us over the past 4 years!

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Randy1949

11:00 am on Thursday, August 9, 2012

I love watching where my education tax dollars have gone -- into young people like jukap29 who can't spell such simple words as 'monkeys' or 'their' and can't use capital letters, but they think they know it all.

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jukap29

11:06 am on Thursday, August 9, 2012

there, their, they're my lil grammar nazi, i'm a product of Illinois schools sadly and down there they fina teach you bout dat social justice, not real facts like readin, ritin, and rithamtic!

hey hey we're the monkees, people say we monkey around!

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CowDung

11:08 am on Thursday, August 9, 2012

You do have to admit that he makes a valid point about the 'tweeters' though, Randy...

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Randy1949

11:12 am on Thursday, August 9, 2012

I wouldn't know, Cow Dung. I don't tweet. I blog. Mostly in complete sentences.

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Bob McBride

11:19 am on Thursday, August 9, 2012

While we're picking nits here, when did posting in the comments section attached to an article or blog become known, itself, as blogging?

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Randy1949

11:24 am on Thursday, August 9, 2012

Bob McBride -- I mean that, rather than tweet, I actually have blogs in which I write opinions and other material using passable English and spelling. Not that I'm telling you where to find them.

I don't consider comments like this one to be blogging.

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CowDung

11:26 am on Thursday, August 9, 2012

I don't tweet either Randy, but it seems rather obvious that 'tweeters' tend to have an inflated sense of importance regarding their tweets.

I wonder if the average person actually takes the time to read any of the Twitter stuff that morninmist posts on here...

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Bob McBride

11:35 am on Thursday, August 9, 2012

Not to worry, Randy. I won't be pestering you for the links.

I've seen other people use that term to refer to posting in the comment section as well. Your mention, which I apparently misinterpreted, was the 2nd one in so many days. Just wanted to make sure I hadn't missed out on yet another misappropriation of the term.

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Bob McBride

11:36 am on Thursday, August 9, 2012

We could take a poll on that, CowDung - and then tweet the results.

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CowDung

11:42 am on Thursday, August 9, 2012

I got the same impression on the 'blog' thing from the other thread, Bob--it isn't just you...

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Randy1949

11:47 am on Thursday, August 9, 2012

You'd be bored to tears, Bob, by what I write. But I do try to do it in complete sentences with proper English and well-though out arguments, just as I try to do even in comments here on Patch. It seems to be a lost art.

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CowDung

11:50 am on Thursday, August 9, 2012

Amen to that.

It is good to see people that still communicate online in full sentences and reasonably correct grammar.

Dave

10:26 am on Thursday, August 9, 2012

No one man can bring down Congress we need to MARCH and take it Back

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Rachel Holley Sciortino

10:38 am on Thursday, August 9, 2012

Dear Ricardo, Nice job parroting what you heard at the dinner table. I find it HILARIOUS that in your first paragraph you complain of "entitlement crises" just before lamenting the loss of your future entitlements (medicare and ss). So.... today's old people shouldn't have them -- so that you can??? Nice thinking, but you're young and presumably healthy-- time to get a job and start saving. That's what the smart money (and people) have been doing all along. Relying on medicare and ss for old age is a dangerous risk, always has been. As for healthcare -- be glad you'll be guaranteed healthcare when you're young -- you could end up like me with a chronic condition at 22 an no health insurance. As an adult I had a low paying/no benefit first 'real' job. I amassed thousands of dollars of medical debt and though I paid it off eventually -- it took many years. It would have been nice to have insurance then. It would have been even nicer if my next employer had covered me despite my ‘pre-existing condition” but they didn’t have to. So I paid out of pocket for years, and when I finally got good job at a company that covered me – I was afraid to leave for fear of losing my health insurance again. Even though no one thinks they'll get sick or have an accident when their young -- it happens. Trust me. Finaly, it's unlikely that the president will dramatically affect your ability to live, work, thrive in life. Don't blame politics. Row your own boat and stop whining.

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jukap29

10:45 am on Thursday, August 9, 2012

I'm glad you single Ricardo's programs and situation out rather than focus on the MAJORITY of entitlement spending (Welfare, foodstamps, etc). Ricardo will get a job, why does the president feel it's ok to invite more able bodied people onto the dole and then remove the requirements for work Rachel, hmm? and why is it alright for Ricardo to just stfu and PAY into something he'll never get but we allow virtual baby factories and worthless sperm donors to proliferate while the real working class has to sit by and watch their liberties slip away.

i suppose you'd have us all indentured servants to big daddy gubamint and just be happy with the lot we're lucky enough to get dropped from the oligarch's table...

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Randy1949

11:07 am on Thursday, August 9, 2012

@Jukap29 -- do you know what the percentage of federal expenditures on 'Welfare', food stamps, and Medicaid is? It's less than 15%, to the 33% that SSI and Medicare cost -- hardly a majority. (Of course FICA accounts for 40% of federal revenue, so to date SSI and Medicare have more than paid for themselves.)

I agree that able-bodied adults should work for a living, but we have 8% unemployment as it is, and programs like food stamps allow employers to hire for a lot less than they otherwise would have to pay.

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Ricardo Tapia

11:29 am on Thursday, August 9, 2012

Rachel, it's interesting how personal your comment was--Im rowing my boat just fine, thanks for your concern. Of course, I do not intend to ever need the entitlements; however, I speak on behalf of my entire generation when I speak about the entitlement crisis. When did I ever say today's senior citizens should not have these programs so that my generation could? The Paul Ryan plan, for example, will not even touch Social Security for today's senior citizens. Moreover, I am not encouraging anyone to rely on SS and Medicare. On the contrary, I wish no one needed them, but obviously this is not the case for some unfortunate Americans. That being said, regardless if I ever need them, it is simply wrong for my generation to have paid so much into these programs and not see a reasonable return like the past generations did. This is all I ask--for legislators to reform these entitlements in a way as to ensure that our contributions eventually see equal returns. They need to be viable for the future. Until then, yes, we are in an entitlement crisis. Furthermore, I assume you are a proponent of the President's healthcare law. All I will say about this is simply that any law that adds at least $300-500 billion dollars in debt over the next ten years is not good policy. I agree that the current system is broken, but the real solution is in creating more market based reforms with a better focus on preventative care.

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Greg

11:30 am on Thursday, August 9, 2012

Rachel, Your advice of "time to get a job and start saving" is exactly what Ricardo is talking about. By privatizing some of the entitlements a person pays into their future rather than the existing black hole. Don't worry about your piece of the pie, the reforms will not push you off of a cliff.
I think it is great that you were able to work your way through your health insurance problems and your story does a good job of pointing out the need for health care reform. I think there will always remain a problem of perspective and personal responsibility. When you finally got a good job and then the employer took over the massive burden of your health, you seemed to prioritize leaving over any loyalty. The taker mentality can never be satisfied with any type of reform.

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Randy1949

11:43 am on Thursday, August 9, 2012

Two things, Ricardo -- First, how long do you think it will be before resentment sets in towards those current seniors who are getting the benefits they worked for and were promised? That would include me, at the supposedly safe age of 63, but not a close friend aged 54. I'm already hearing the generational warfare rumblings.

Second, what reforms to you propose for Social Security? We already have the traditional FICA that provides for a not terribly luxurious benefit, especially if you were low-income for much of your working life. My generation and yours already has the option of 'privatization' in the form of IRAs and 401Ks. Do you want a Social Security contributor to have more control over the level of investment risk in his or her contributions? It looks wonderful, but we all know what has happened to everyone's 401Ks and IRAs over the past four years. That's why I find myself actually needing my modest Social Security benefit and Medicare once I finally reach the age where I can claim them.

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CowDung

11:48 am on Thursday, August 9, 2012

Take a look at the plan that GW Bush put out for consideration a few years ago. The idea was that a percentage of the SS tax could be put into a private retirement savings account. Participation was optional, and one wasn't able to put 100% of their SS tax into it. If they didn't participate, then nothing would change for them. If they did participate, the contributor could control the percentage of money they put into the private account. SS would still pay retirement benefits, but at a level according to their contributions to SS.

It really didn't seem nearly as unreasonable as the Left seems to claim it is.

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Randy1949

11:56 am on Thursday, August 9, 2012

It doesn't seem like such a bad idea, Cow Dung, until you remember how well Wall Street took care of our investment money during the last decade. They gambled, cashed in, and left the rest of us holding the bag.

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Ricardo Tapia

12:17 pm on Thursday, August 9, 2012

Randy, I can only speak for myself when I say this but I will certainly not encourage any grumblings regarding generational warfare.
I realize that many are still skittish about the stock market considering the 2008 economic crisis--especially those who had a lot invested. This sentiment is akin to the generation that lost so much during the Great Depression. That being said, crises of this magnitude are not common. We should not assume that these things will happen often. One might say that recessions of lesser magnitudes happen all the time, which they do. But like I said, I think properly managed investments can survive these minor dips. Again, this is a risk I am willing to take. All the potential benefits, both for the people and federal government, are simply too good to pass up. As a conservative, I tend to favor solutions that place more of the responsibility on the individual than the government, which this solution does.

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CowDung

12:26 pm on Thursday, August 9, 2012

Randy:

One doesn't have to put all their investments into stocks. The whole point of it is to control one's own destiny. If people invest like they do their 401(k), it shouldn't be a big deal if we have a market downturn. Younger people invest in higher risk, higher return stuff. When the market is down, there is time to recover before they have to draw out the funds. Older people invest in low risk, lower return stuff. Market downturns won't significantly affect their portfolio.

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Randy1949

12:33 pm on Thursday, August 9, 2012

Ricardo, I'm skittish about the stock market because of a much longer perspective than you. I wasn't in the market for the big 'junk bond' crash of 1987. It was the lowering of bank interest rates after that debacle that forced me into the market. I've been hammered twice -- once in 2001 and again in 2008, losing one third of my portfolio's worth each time. Each time I rode it out, but there comes a time when you're forced to liquidate, and it isn't always at a good point.

And I ask you -- what will happen to the Social Security trust fund when money is siphoned off into privatization and subject to market fluctuations? We already have privatization that puts responsibility on the individual rather than the government -- in the form of IRAs and 401Ks. The irony is that the less you make, the less you have left over to take advantage of these things, and the less you get in Social Security benefits.

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James R Hoffa

12:43 pm on Thursday, August 9, 2012

@Randy1949 -

But Wall Street wouldn't be controlling the privatized sum - the individual FICA taxpayer would be controlling where the money would be invested. Did you honestly not understand how that part of the plan would work?

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Randy1949

12:49 pm on Thursday, August 9, 2012

Yes, Hoffa, I understood. So just where should the privatized money be invested, then, if not in the market? In bank accounts that pay a fraction of a percent? Bonds? What are they paying these days? Not a whole lot. What is going to perform better than the Treasury notes the Social Security Trust Fund is invested in now?

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Randy1949

12:53 pm on Thursday, August 9, 2012

@Cow Dung, see what I said to Hoffa. Time was, older people invested in 'safe' bonds. But even old people need a decent rate of return on their retirement money, and you sure don't get it in banks anymore. I don't know what bonds are paying these days. Not the nine percent I got back in the 90s.

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Craig

12:57 pm on Thursday, August 9, 2012

Rachel: Pre-existing conditions are, and have been covered by employer offered group health plans. The bigger issue if for those who become sick and can't work- faced with losing their insurance or paying COBRA until it runs out. If they do not recover, then it is hard to find insurance with a pre-existing condition. Add to the problem applying for Social Security. You payed into the plan for disability coverage, but they can take 5 years to approve your payments. By this point many people are bankrupt and homeless. Good Ole Government.
If you had purchased a Disability plan privately and they took 5 years to pay you, the courts would punish them severely.

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James R Hoffa

1:20 pm on Thursday, August 9, 2012

@Randy1949 -

It sounds to Hoffa like your biggest gripe overall is with artificially low interest rates. And yet, I never hear you pointing the finger at Ben Bernanke - instead it's always somehow the Republicans' fault according to you.

BTW - In order to pull any real money out of the market today, you have to be an active and intelligent investor. In the words of the great Ron Popeil, you just can't 'set it and forget it,' and expect your initial investment to grow into some large nest egg by the time you're ready to take it out. You have to trade on the swings or stick to low growth high divided yield investments. You absolutely cannot be a lazy or foolish investor though and expect it to work to your advantage. That attitude is no different than the one that said that real estate prices would only ever increase - and where did that get those who bought into that myth?

Perhaps what you're saying is that the average person is too stupid/lazy/foolish to properly play the market. But just because someone is stupid/lazy/foolish, does that mean that we should take away their autonomy over the use of their own money and instead entrust it to the government to invest and doll out as it deems appropriate?

Why are you so in favor of having the federal government treat everyone as if they're little children that can't be trusted. Why can't we treat adults like adults? If you lose all your money - too bad, so sad. At least the choice was yours!

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Randy1949

1:23 pm on Thursday, August 9, 2012

@JRH -- Hmmm . . . California. Looks like what we used to call a junk bond. Great interest rates but an even higher possibility of default.

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James R Hoffa

1:37 pm on Thursday, August 9, 2012

@Randy1949 -

"... but an even higher possibility of default."

How could you say this? Cali is the liberal utopia of our nation. Those are your fellow Democrats that are issuing those bonds. Are you saying that their word and fiscal policies aren't good enough for you to invest your retirement money in their bonds? Or what about the bonds that the City of Milwaukee issued under Barrett?

It's funny how you'll constantly vote for the Democrats, but refuse to put your retirement money where your political ideology mouth is, isn't it?

I think that you've just been Hoffa'd ;-)

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Randy1949

1:43 pm on Thursday, August 9, 2012

Hoffa, I may be liberal, but I'm not an idiot. I wouldn't have voted for Ralph Nader either. California is in the same league.

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James R Hoffa

3:22 pm on Thursday, August 9, 2012

@Randy1949 -

You believe in their fiscal policy positions enough to trust them with your vote, but not enough to invest your own money in those fiscal policy positions?

Isn't that a textbook example of EXTREME HYPOCRISY?

Craig

12:49 pm on Thursday, August 9, 2012

Randy, I have sympathy for you. Timing is everything, and when one becomes close to the age where they need to withdraw funds, they should shift the portfolio to the safe side. Anyone selling investments must advise the client of the risks- this includes the possibility of losing all of the investment. I don't believe the market has bottomed yet, so my approach is investing in treasuries or safe alternatives, and not in stocks at this point. In a 401(k) plan this will make you lose money, but it is a minimal loss. For example: A 401(k) plan has higher costs than most mutual funds but the costs are hidden and not disclosed. Usually it is close to 1.5% costs to maintain the account. If Treauries are paying 1%, then you are losing .5% of the balance in the account. Few 401(k) plans offer safe options that pay enough to offset the hidden fees in them.
BTW: Obama promised to fix Wall Street. 401(k) plans should have to disclose the costs to the participants, but BO had an epic fail for us on that one also.

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Randy1949

1:01 pm on Thursday, August 9, 2012

The average investor doesn't have a crystal ball, although I've sometimes suspected that some very big money people know ahead of time when to go to cash. Because market volatility is the friend of people who can sell out and buy back in at the bottom.

All my money, including a rolled over retirement plan, is in IRAs, invested in low-fee, well managed mutual funds, index funds for the most part. But even those get hit in a downturn.

And please, would you like to tell me what the 'safe' side is? A money market fund that makes less than one percent? That's actually losing money when you have inflation.

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Ricardo Tapia

1:06 pm on Thursday, August 9, 2012

Randy, I do not have too much to say apart from what those above me wrote. They made the case very well. However, we keep returning to the same point. We have limited options available in order to save SS. We will either have to pass a large tax increase, cut benefits, or both. This is why I favor partial privatization--because the alternatives are far worse.

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Randy1949

1:19 pm on Thursday, August 9, 2012

@Ricardo -- Do you mean yet another FICA increase or income tax increases? There's a difference. And what will happen to those people who choose too much risk in their privatized portfolios and lose? Not to mention the loss of money from the system if that happens.

This is not a new idea. My boss, when I was your age, told me how much better he could do with his FICA money if he could invest it on his own. I daresay he was right, but I really think he was more interested in not having to pay his portion of mine. Just as some people in the government are not eager to return the borrowed money to the Social Security Trust Fund.

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Craig

3:51 pm on Thursday, August 9, 2012

Randy, there are annuities paying 3-4% today, that are considered extreemly safe. The reason for low interest rates is to keep the National Debt from snowballing even faster. Sadly, this is like the Gvt. cutting off our nose to spite their face. I understand the issue with money markets, but taking risk one is adverse to is malpractice on the part of a planner.
My belief about privatization of SS is this: I think it was an attempt to prop up Wall Street long before Wall Street was in trouble. Wall Street is like a giant Ponzi/ Pyramid- the more buyers, the higher the prices.
BTW: You CAN get financial advice for free- many people work on commission. Mutual Funds have fees that are used in part to pay the Agent an annual fee. It wouldn't hurt to get free advice, and you don't have to do anything but listen. You can use FINRA Broker Check to make sure you have an upstanding person to work with.
Now to piss off my GOP friends: The way to help SS stay liquid is to take the cap off the tax. Why should someone earning $80k pay SSI taxes on it all but someone making $300k only pays on the first $90k?

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James R Hoffa

4:37 pm on Thursday, August 9, 2012

@Craig -

To answer the question you posed - because they wouldn't be getting any extra benefits back for the increased amount that they're investing into the program.

Remember, the whole point of SSI is this: the government didn't think that people were responsible enough with their own money to properly save for retirement. So, instead of treating us like adults and allowing us to fail or succeed on our own merits, the government instead treats us like irresponsible children and takes a portion of our earnings and sets it aside for us, deciding how and when they will start dolling it back out to us.

It's really personally insultive if you think about it. That's why it should have been an optional participation program since its inception.

Randy1949

1:34 pm on Thursday, August 9, 2012

"It sounds to Hoffa like your biggest gripe overall is with artificially low interest rates. And yet, I never hear you pointing the finger at Ben Bernanke - instead it's always somehow the Republicans' fault according to you."

Nope. Interest rates have been dropping for the past twenty years or more. Neither party is innocent in this. It's been making money for some people while leaving others out in the cold. Bernanke can go suck a pickle, and so can Alan Greenspan before him.

But frankly, Hoffa, I see no difference between private money managers and the government, other than the private ones skim off a profit. That goes for any kind of investment or insurance or annuity or whatever. You see Government as someone who takes your money and gives it to someone else. I see the private side as someone who takes my money and keeps a buttload for themselves. Not too much difference.

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James R Hoffa

3:25 pm on Thursday, August 9, 2012

@Randy1949 -

Why does an individual need a private money manager? Hoffa manages his own investments, thank you very much. Why can't people just take personal responsibility for educating themselves about investment markets and manage their own money? If some people want to be lazy or stupid and pay someone else to do that for them, well, that's an individual prerogative - more power to them, but then they can't bitch about the fees they're paying.

The point is - I should have the option and choice to be treated like an adult and investment my retirement money myself if I choose to do so. And if I make poor decisions and lose it all, oh well, that was my choice and I have no one to blame but myself.

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Randy1949

3:41 pm on Thursday, August 9, 2012

Hoffa, by 'private money managers' I mean entities like banks, insurance companies, etc. The bank holds my money safely (I hope) lends it out to people and pays me part of the interest earned on it. I buy a Vanguard mutual fund. Someone manages that fund, and I pay a modest fee for that service. I purchase a whole-life insurance policy or perhaps an annuity from an entity like Metropolitan Life. They see to it that the money is there for me as per contract, and they take a profit for themselves. Same with medical insurance or auto insurance.

The government does the same thing with Social Security. It's a publicly administered annuity, dependent on lifetime contributions to determine benefits. It's invested conservatively in T-bills.

You talk about poor decisions, but when it comes to investment, it's usually someone else's poor decisions that make a company go bankrupt or default on its obligations. Often those responsible got away with their money before it all fell apart.

So I take it you object to Social Security on principle, as it isn't completely voluntary.

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James R Hoffa

4:52 pm on Thursday, August 9, 2012

@Randy1949 -

Hoffa only makes direct investments through private investment accounts held by companies such as Scottrade. The only fees he pays are the commissions on the purchasing or sale of investment securities, which are tax deductible as an expense.

Hoffa does believe that SSI should be a voluntary opt-in program, as opposed to a compulsory program.

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Randy1949

5:38 pm on Thursday, August 9, 2012

So you deal in individual stocks. That's all well and good, but you still have no control over someone at a company making a bone-headed decision that sends the stock tumbling.

And Randy suspects that Hoffa objects more to the compulsory employer matching contribution to FICA than the employee contribution. There are a lot of things in this society that are compulsory.

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James R Hoffa

7:20 pm on Thursday, August 9, 2012

@Randy1949 -

But I do have control over when I buy and sell the securities and what securities I'm dealing with. Hoffa's rule of thumb is don't hold anything longer than 1 year and 1 day, just long enough to qualify for long term cap gains as opposed to short term taxation. Even then, many of Hoffa's trades are done in less than a year's time. That's why Hoffa is so excited about Romney's tax plan which will eliminate the cap gains all together for guys like you and Hoffa - we'll finally have a chance to really play the market for all it's worth without the heavy burden of additional taxation! This gives us a chance to elevate ourselves to Romney like levels!

Hoffa could be looking at an early retirement under Romney!

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Randy1949

7:36 pm on Thursday, August 9, 2012

Hoffa, you do realize that Mitt Romney makes most of his income from capital gains, which means he'd be cutting his own taxes to practically zero. By all means, let's let the people who actually work for a living pay the taxes. That's what the 'little people' are for.

Steve ®

3:29 pm on Thursday, August 9, 2012

I know of a good idea. Lets' take $1 trillion + out of the private economy, pass it around to all our friends. Require that it be used in ways that fit our mold, minority companies, local work force, green energy, electric cars etc and just watch the economy EXPLODE in growth!!!!!

Why are we not trying this already?!?!?!?!?!

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Randy1949

3:48 pm on Thursday, August 9, 2012

@JRH -- "Randy1949 - You believe in their fiscal policy positions enough to trust them with your vote, but not enough to invest your own money in those fiscal policy positions?

Isn't that a textbook example of EXTREME HYPOCRISY?"

You're making quite an assumption when you insist that the school board of wherever it was in California are all Democrats. I didn't vote for that school board and I sure didn't vote for the investment company that set them up with those crappy bonds. The investment firm is making a tidy sum, I notice, and those folks tend to be politically conservative types.

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James R Hoffa

4:46 pm on Thursday, August 9, 2012

@Randy1949 -

"You're making quite an assumption when you insist that the school board of wherever it was in California are all Democrats."

Typically, school board members do not run on party affiliations. However, you'll note that the Cities and Townships in which those school districts operate are all historically and currently controlled by Democrats, so I would think that's a pretty safe assumption to make, wouldn't you?

"The investment firm is making a tidy sum, I notice, and those folks tend to be politically conservative types."

Indeed they are, and it's the Democrats that are giving them the business. The investment banks gave more money to Obama's 2008 campaign, the only modern major party candidate to receive the endorsement of the Communist Party USA, than any other Presidential campaign in our nation's history!

Also, did you notice how much those school administrators are taking down in base salary alone - the top guy is banking $286k/yr. while over a dozen others are at $227k/yr, exclusive of benefits!

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Randy1949

5:31 pm on Thursday, August 9, 2012

I reiterate, Hoffa, I did not and would not vote for them. I would not have voted for some Southern Democrats either.

I would also like to draw your attention to this article: http://brookfield-wi.patch.com/articles/waukesha-school-district-budget-reduces-costs-proposes-tax-rate-increase

Property taxes are going up despite Walker's 'tools' and because of the decreased federal and state aid.

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James R Hoffa

6:03 pm on Thursday, August 9, 2012

@Randy1949 -

The numbers in that article make no sense. The board/administration sold the media and the people a bunch of crap.

"In the preliminary budget, the tax levy for the district is estimated to be $83 million, a decrease of $891,000 from last year’s levy. Assuming a 2 percent decrease in equalized property value throughout the district, the resulting tax rate would be $9.33 per $1,000 of property value. Last year's tax rate was $9.24 per $1,000 of property value."

So, if the overall amount being collected from property taxes went down by $891k, then how on earth could property taxes go up unless you're working with less taxable property in general? Did the government buy up a bunch of private property in the district? This makes no sense. Yes, I understand that property values decreased, but even so, if the overall amount your collecting is less than the previous year, than the taxes paid by each property owner would be less assuming that you're working with the same amount of taxable private property, right? So what happened to the taxable private property in your district?

Total Reduction in State & Federal Aid & Local Property Tax Collections:
$891,000 less in property tax collections
$670,000 less in state and federal aid
$4M less in federal aid (majority Obama stimulus money)
Total: $5,561,000 less in revenues

"With this proposed budget, the district reduced costs by $9.6 million."

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James R Hoffa

6:05 pm on Thursday, August 9, 2012

So, if the district cut costs by $9.6M and only lost $5.561M in revenues with the increased property tax levy in their new budget, then where did the other $4.039M in savings go???

Sure looks to Hoffa that if they really cut $9.6M from the budget as they claimed, then there was no need to raise property taxes - in fact, they could have lowered them, as Walker intended.

They may be doing what Burlington Area SD did - raising the max allowed now to set the baseline higher for future increases permitted under the new tax freeze law. While they claim that the money will be set aside in a rainy day fund, the people of BASD weren't buying it and voted the incumbents up for re-election out in favor of fiscal conservatives!

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Randy1949

6:18 pm on Thursday, August 9, 2012

You're right, Hoffa, the numbers don't add up. The thing that caught my attention was the increased rate per thousand, which with my assessment creeping back up is going to hit me hard.

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James R Hoffa

6:27 pm on Thursday, August 9, 2012

@Randy1949 -

So why don't you file a lawsuit against the school board?

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Randy1949

6:40 pm on Thursday, August 9, 2012

Sure, Hoffa. Know any good lawyers?

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James R Hoffa

7:15 pm on Thursday, August 9, 2012

@Randy1949 -

Hoffa's been down that road personally - it's very difficult to find a court that's willing to find an offense egregious enough to overcome the defense of governmental immunity. Hoffa was unsuccessful in the past. You'd have to find a smoking gun before any decent lawyer would even be willing to consider taking on such a case.

Sorry - I understand your gripe, and it's legitimate. But it's not Walker's fault. If you want to change things, you'll have to play the system - get involved, go to meetings, demand answers and the truth, run for the board, etc.

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Randy1949

7:23 pm on Thursday, August 9, 2012

I was joking, Hoffa. On what grounds would anyone sue? Generally speaking, if you live on an 'expensive' property, you have the income to pay the property tax. but not always, and that's when the system become unfair.

So when does this 'freeze' on raising taxes begin? I didn't know the school boards got a grace year to jack things up

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James R Hoffa

11:45 pm on Thursday, August 9, 2012

@Randy1949 -

Violation of public disclosure and open records (FOIA) laws, fraud, gross negligence, embezzlement, etc. They are very difficult cases to win unless you have the proverbial smoking gun. And most of the time if a good one is initiated by a private citizen, the state will intervene and take over the prosecution, adding criminal charges to the civil charges.

The freeze regarding school district levy's is different than the general freeze applying to municipal governments. It's actually a very complicated formula laid out in Subchapter VII, Revenue Limits, of Chapter 121, School Finance, of the Wisconsin Statutes.

https://docs.legis.wisconsin.gov/statutes/statutes/121/VII/90

State Assemblyman Robin Vos attempts to explain how it works here, although even Hoffa can't make very much out of Vos's explanation:

http://legis.wisconsin.gov/assembly/vos/eupdates/Pages/Property%20Taxes.aspx

Randy1949

10:35 am on Saturday, August 11, 2012

@JRH --"State Assemblyman Robin Vos attempts to explain how it works here, although even Hoffa can't make very much out of Vos's explanation:

http://legis.wisconsin.gov/assembly/vos/eupdates/Pages/Property%20Taxes.aspx";

I read it, admittedly not in depth. But what I deduced is that the school districts are limited to a certain amount. Presumably there's an increase built in to account for inflation. And when the districts suffer a decrease in federal and state aid, they are allowed to make up the difference from property taxes. Which is how it has worked all along.

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James R Hoffa

12:46 pm on Saturday, August 11, 2012

@Randy1949 -

Yeah, I got that much as well. Hoffa was trying to figure out how much tighter the new freeze was over the old limits. If you look at the statute, you'll see that Walker's budget added some new calculations into the formula and that it uses 2012 as a new baseline - which is how the BASD board was explaining it at the meeting Hoffa attended. For the next several years going forward, schools will be severely limited as to how much revenue they can raise locally, working off that baseline, absent a public referendum.

That's why the BASD board claimed that they raised near the max allowed this year - to establish a high baseline so they wouldn't short change themselves in the years going forward under the new limits. They 'promised' that any excess funds collected this year would be put in a segregated rainy-day fund, but the board has a history of breaking such promises and spending money like it burns a hole in their pocket, so the two incumbents up for re-election got voted out in the last election, with the fiscal conservative candidates winning those seats.

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