San Diego Housing Market News and Analysis

Wow. Just wow.

Maybe I should stop contributing to 401k. I can see that in future I will be offered choice of 401K or social security!

I vaguely remember hearing something similar some time back when about Venezuela screwing people out of pensions.

Two of the five countries are Eeastern, one is Central and two are Western European countries.

What France and Ireland did is not that much different from Social Security trust fund's mandate to invest in government bonds.

Back in 1997 Hungary did what Bush II tried and failed to achieve - they privatized a third of their Social Security funds. They are simply canceling the program, which was a high cost/high fee/low return (big surprise). The voluntary retirement accounts are not affected by this.

As a side note, almost all former Soviet-dominated countries practice very brutal form of Capitalism. The social net that we have here is more similar to what they had until 1990's than what they have now.

Argentina seized pensions a couple years ago, no? And Team Obama seized the value from GM bond holders, yes? And the "conservative" Supreme Court OK'ed the Kelo decision, no? State of CA seizes the contents of bank safety deposit boxes after some ridiculously short period of no access, yes? Seizing appears to be an approved meme among govt folk. And it has precedent, FDR seized private gold.

An elder relative, a wise man, has been telling me for years to avoid govt constrained pension plans (401K, IRA, etc). He says "take the tax hit up front, put it in real property, preferably out of the country." I.e., US Feds probably won't seize your foreign acreage. Just hold it, and sell when you need the cash, with no silly age requirements.

How about when the government bails out private pensions?

Don't you think that the value of the your 401k has been help up by Federal action?

There is much divisible privately held residential and agricultural land. To develop it the owner must.
Dedicate as much as 60% of the land as "open space"
Hire a biologist.
Hire an archeologist who could potentially trigger a huge review(this is churning work).
Hire engineers/surveyors(these things can be done with legal descriptions only)
Hire a fire hazard study consultant(or something like that)
Pay tens of thousand for review of this work by local governments and perhaps also the state, depending on some circumstances.

It has not always been this way and there is much of the U.S where a subdivision can be done on paper for chicken feed, compared to what it takes around here. One day someone will be able to buy the open space back into use(or it will be given to Corky Mcmillin) and the biological studies (which are mostly just churning work) will be rendered irrelevant.

I call this Confiscation.

Hey Brian.......THE GOVERNMENT MONEY COMES FROM US, THE TAX PAYERS! They produce nothing, just redistribute from producers while they take a cut. Essentially what the article is about. So quit acting like they gave this money out of charity that they actually generated through production.

In the short term, yes.

In the long term (the timeline that matters), absolutely not.

"The Irish government plans to institute a tax on private pensions to drive jobs growth, according to its jobs program strategy, delivered today."

Read more: http://www.businessinsider.com/irish-bom...

I hope this does not catch on here. First they came for the pensions, then the 401's, next they took the safety deposit boxes....

It depends what your timeline is. If you only have 20 to 30 to live, I think that you should be glad that the government didn't let the system collapse in 2008.

Ireland has some of the lowest corporate rates in the developed world.

from the article you quoted:

Unwilling to budge on the country's low corporate tax rate, Enda Kenny's Irish government has chosen to target pensioners for funds to grow the economy. Whether it turns out to be an example to other countries seeking alternative ways to raise revenues with aging populations is yet unknown.

By the time I retire Social Security will almost certainly be what it probably should have been to begin with and that is a safety net.

Thus if I have saved and invested wisely I doubt I will qualify.

I am fine with this, but let me save my own money and stop contributing as much into a fund which many have lamented is everyones play thing.

This explains why your perspective is different from many of ours, brian. Since you are childless, you tend not to worry about what happens after you die. For the rest of us, it matters greatly.

Just an interesting observation that helps explain why you think all the intervention "saved" us. It didn't, and perhaps you know that, but you (and/or your children -- since you don't have any) don't plan on being around to suffer the consequences, apparently.

Better start eating more junk food. ;)

That's not even in the issue, in my opinion. There is no chance that things will be better 20 years from now because people's 401ks were propped up today. Long-term prosperity is based on productivity growth, and the stuff of this bailout (unsound money, massive debt accrual and deficits, handouts to incompetent and semi-corrupt companies that should have gone bankrupt, etc etc)... that's not good for productivity growth.

CA renter, I plan on being around another 60 years to 70 years, possibly more if there are good medical advances. ;)

Mabye I'll adopt a child from Cambodia and give him my money or my debts, and our cummulative debts.

We will need population growth to pay for the debts for sure.

Time will tell...

I actually was not referring to myself, but to people in their 50s, at the peak earning years. Generally people die in the 70s to early 80s.

They don't have enough time to recover from a collapse in the value of their assets or from layoffs. Those folks are becoming empty-nesters and need to start downsizing and making plans for retirement. They should be thankful the government saved the economy.

BTW, government action is necessary not just economically but for social harmony as well. Imagine the social unrest if unemployment hits 20% or above.

Could you please elaborate on that?

Do you think that we are in for lost two decades like Japan?

Could not agree more.

I've always favored some type of government action, mostly in the form of WPA-type programs, and increasing funding for R&D in energy, healthcare, and transportation technology. I've also suggested that the government fully back the FDIC, SIPC, PBGC, and possibly other pension programs (but only up to the previous limits).

In other words, cover those who were prudent, and who didn't have anything to do with causing the "financial crisis," and try to keep unemployment as low as possible during the deleveraging period. Fix the *cause* of the crisis, while trying to mitigate the damage to those who were not directly involved in the mortgage/credit market. Mortgage borrowers and lenders (and those who traded related securities) are NOT in this "protected" group.

What I do not approve of are the bailouts of the very people who got us into this mess. This cannot be stated emphatically enough.

x3

Agreed.

I agree with you.... but that's the path not taken. What's done is done.

Letting the financial sector collapse in 2008 would have required the government nationalize all the big banks and socialize the economy. No chance that would happen in America.

Up until the collapse of Lehman, the people in charge though that the market + some government and Fed tweeking could handle it.

I'm not saying that the bailout programs that we got were the best solutions. But bailouts of some sorts were absolutely necessary.

Rich, I agree completely with your statement. But, in all honesty, can we look forward to productivity growth? Until 30 years go, prosperity resulted from what we manufactured here and sold here and elsewhere in the world. Since then, domestic productivity has been steadily reduced as more corporations moved operations and jobs overseas. The "prosperity" of the 90s and aughts resulted, in large part, from lax monetary policy, widespread speculation, and limitless lending. The employment during this time didn't come from long-term manufacturing jobs, but from home construction and "service" industries that were the first to fall when the bottom fell out of housing and credit dried up, i.e. the sources of revenue for those industries.

To my rather unsophisticated way of thinking, a return to prosperity as we've known it is not possible. I don't care how low the corporate tax rate goes, corporations are going to continue moving jobs overseas. Americans cannot live on minimum wage, not that it matters since corporations are able to pay much, much less than that to their workers in third-world nations. Manufacturing jobs that provided much of the prosperity of the past are a thing of the past.

To be honest, the loss of manufacturing jobs not only should have been foreseen by the government, but should have been part of a conscious effort to change the labor landscape of our nation in order to meet the challenges of the future. The boomer generation witnessed the enormous amount of postwar technological development, and produced the largest and best-educated labor force ever. We were in a prime position to move from a manufacturing economy to one based on technological development. However, we stood idly by, not only watching other nations surpass us in research and development, but also keeping our children from a place at the table, by neglecting to educate them to a competitive level. With completely straight faces, we continue to claim credit for winning WWII and landing on the moon - feats that were, in fact, accomplished by our parents and grandparents.

I agree completely with your argument. But, without a major course correction (and possibly not even with that), I just don't see us avoiding a collision with the iceberg. And, yes, Brian, I see a "lost decades" scenario.

Makes you want to put your savings under the mattress so no one knows how much you saved!!

Oh wait, it might burn in a house fire, better put it in a safe deposit box.

Oh wait, it is illegal to put cash into a safe deposit box.

Well I guess it doesn't matter either way because its value would inflate away over time, so you MUST keep it on deposit somewhere.

On the other hand, if you save in Gold, no one knows what you have and it retains value.

Oh, but Gold is a dead asset, it pays no interest!

Gold does not need to pay interest as it is not a depreciating asset as a dollar is.

Just keep in mind that in the late sixties 20 ounces of gold was the equivalent of the Dow Jones industrial average.

Today the Dow is worth about 9 ounces of gold. So in 1960s if you had chosen 20 ounces of gold you'd have 28k and if you had chosen the Dow you'd have 13000.

Sounds like Gold was the better deal to me.

Oh wait, don't forget that over the years the Dow was manipulated. Companies that fell in value were removed and replaced. Xerox was an example as was now defunct AMC motors. If the original Dow 30 was still in place it would be worth only a couple K.

It is true that the Dow stocks pay dividends and that needs to be put into the calculation and at the very most makes the manipulated Dow issue mute in comparison to Gold.

So the choice is to have numbers on a statement that are subject to Government inflation and confiscation or a chunk of Gold "that you can't eat".

It is true you can't eat Gold but you can trade it for a thousand loafs of bread!

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Don't just blame the financial industry.

We had growth thanks to tech as well. That is bright area of our economy.

But we have other growth sectors that are killing our long-term future: 1)the prison/criminal system, 2) the military/security industrial complex, 3) and the medical industry.

We got the majority of Americans medicated on something or other and using more and more medical services. Imagine a population of obese, sick people. That can't be very productive.

That was a great post by Eavesdropper.

Yes, we had technological advances in the 90s, but this past decade has done very little in comparision. We've made some improvements on the developments from the 90s, and we have more "games," and our widgets work a bit faster (but not as fast as they could without those games), but we've not invented or improved upon anything, to my knowledge, that is equivalent to what we saw during the 90s. I'm not a techie, though, so would love to hear what was invented or developed over the past decade -- in the U.S. -- that is going to make our future so much better.

Perhaps if we had nationalized the banking system in 2008, we could have removed the profit motive that has made the financial sector grow to such a disproportionate size -- and caused all our bubbles, and resultant busts. We could, instead, have focused on the REAL economy -- developments that would have improved the lives of our citizens and people around the world, in addition to producing profits that are based on something tangible.