Squirrels have 'bush'y tails

Q to ask:

"If private accounts(4%) are adopted, then less money will be going towards social security's future obligations (12.6% - 4% = 8.6%). What measures will be taken to meet those obligations to make up for the money placed into private accounts?"

I figure you would like that Q because of where you stand politically. Private accounts alone won't solve a current shortfall. Raising taxes, raising the retirement age, et al are offered as alternatives to private accounts. I am curious if we adopt private accounts Right Now, will predicted shortfalls be entirely avoided, and if not, will they be small enough to be solved with last drastic measures.

I would ask something along the lines:

"There seems to be a contradiction. On the one hand, private accounts are a bad alternative because Americans are poor investors who will lose the farm. On the other hand, everyone will opt for the private accounts in lieu of the current system. If it is such a bad plan, then why do even the Democrats concede the private accounts will be so popular?"

But that is a softball I would serve up to Bush.

I thought that G Dubs only takes pre-screened questions at those kind of events.

Usually the question is something along the lines of "I think you are doing a great job and I pray every night to Jesus that your will is acomplished".

ok, the thing is, you need to start off your question being all nice and praising, and then turn around and ask him something serious, like:

"Mr. President, first I want to say that I really appreciate all the work you're doing to educate the public about the problems with social security. I see a lot of people every day who depend on Social Security and I like how you're working to make sure that I am going to have money to rely on when it's time for me to retire. My question, though, is about private accounts. While I like the idea of having control of my own money, what happens if there is a stock market crash or something disastrous like that? Will I end up losing some or all of the money that I put into the private account?"

ben and scott I like both of your suggestions. Scott, I've been reading alot in the washington post today, and it seems that most democrats are now against the private accounts, and alot of the republicans are starting to turn against it as well. Because of that I think I'll do a question that steers clear of political references. Ben, good point about starting off with a little ass-kissing. Avram, you might also be correct about the preordained questioning. Just so the world knows, if they hand me an index card with a pre-written question on it, I'm still going to ask. I mean how often do you get a chance to talk to a president, even if it is someone elses words?

also, Ben, i was discussing your exact question with scott last night. His answer was basically that if there is a stock market crash it doesnt matter, because you have the accounts longterm, and longterm gains in the stock market will cancel out the crash (correct me if I'm wrong scott). My response to that is that you never can tell what the stock market is going to do. It is a good question for the pres... ben you are currently in the lead for which question im gonna ask.

hooray! and as for whether the stock market gains in the long term, that may be true, but at the same time, if i've got an estimated 100,000 worth of stock when i'm 64, and it crashes, and now i've got, say, 20,000 when i turn 65 as opposed to the 100,000 i though i'd have, well, that ain't good.

I wish instead of doing the stock market you could take your money and bet on sports. I'd retire off the next world cup. Sports gambling I can do, the stock market, I'm not so sure about.

Sure, the stock market over the long haul rises ON AVERAGE. There are still plenty of stocks that will lose money. Just that the number of stocks that gain money over the long term are more than those that lose money. Even if the market is gaining money on average, if your portfolio is full of Enrons and Tycos you are a big loser.

In response to Ben's worries, as with any investment portfolio or 401k, etc., you need different strategies for different stages in your life. In your twenties and 30 you can have a more aggressive approach to building wealth since you have plenty of time to rebound from a crash. When you get into your 60's you'd probably want to move most of your portfolio out of riskier stocks and into stuff like bonds, treasury bills, and money markets that have more short term security (but less money making potential).

People like us will probably be able to save more money than SSA would pay us. The problem I could see is that you'll get uneducated 50 year old workers who realize they don't have enough saved up and they will invest in riskier options. Then if the market crashes, the people affected will be older, less educated, poorer people.

Bush is all about less regulations. This is kinda scary if he is trying to get millions of more people in the market. We know who is looking out for the CEOs and the brokers, and the bankers, etc. Who is gonna be looking out for the small investor?

right on av... this plan definately helps the big investors. They will see the value of their already plentiful shares rise as millions of americans buy into the stock market. I consider myself a pretty well educated guy, and yet I still have little understanding of the stock market. What are people from inner city baltimore, or Nowheresville Wyoming going to do about investing their money? They can either go at it on their own, with the likely chance of makeing poor decisions, or they can pay a big mutual fund company, such as Fidelity Investments to make the decisions for them. I imagine the mutual fund companies are salavating at the commisions they are going to make.

Something that I really do not understand, is why a middle class or higher social class person actually needs the Social Security. The major problem, from what I can see, is that no one wants to "share." But then again why should you have to share your earnings, and your money, with complete strangers. The private account thing only solves the SS problem for the middle/upper class, the two groups who really do not need any of it. If people want to hold their own private account, then let banks do it, that is not the governments job. I say just cut the people off that do not really need the SS, sure it sucks that these lower class/poor people are getting your hard earned cash, but your little ammounts of cash, would be considered by them as a fortune

Oh, so that being said, my question would be...

G-dub whats your least favorite salty snack and why?

Really though, I would prolly just go with the index card.

Financial management firms will get a big boost. But, they are being compensated by getting us a little richer. If people just put their money in a mutual fund indexed to the Dow Jones or S&P they would make a much higher return than is being earned by our current system. Ok, so the mutual fund provider gets some extra cash - so what? This will probably create jobs. Are we all of a sudden against creating jobs? These firms aren't getting rich at our expense, they are getting rich because they are helping us get rich. Its a win-win.

And Ben, like I said to Trevor, if the market crashes 80% in one year private accounts are the least of our problems. We probably just got attacked by aliens or something.

I would not be surprised at all Trevor, if this Town Hall descends into a debate on G'itmo. That's my prediction. Half the questions are about G'itmo. Yes, off topic. Quite a bit. I wouldn't be surprised.

Hey Trev, who is Jared?

jared is my little brother (who is starting school at the university of maryland in a few months... go Jared!). All this talk about putting our money in "mutual funds indexed to the Dow Jones or S&P" makes no sense to me, as in I don't know what it means. I'm thinking the average american has neither a business degree nor a financial advisor. How is the average american supposed to make the educated decisions you are expecting them to make?

oh, I am not against the financial management companies getting money, nor am I against them creating new jobs. I was just commenting on that and wondering if there is some way I can invest in the financial company itself (not their mutual fund, but actual shares of Mutual of Omaha or whatever)? Do they trade shares of them on the stock market? It seems like it would be a good buy. On that note, does anyone else remember those Mutual of Omaha commercials they always had before documentries on PBS. What ever happened to Mutual of Omaha? They funded some of my favorite childhood learning.

Mutual of Omaha Warren is Buffett's darling. His shares trade under Berkshire Hathaway, ticker BRK-A. Go to Yahoo finance and enter in the ticker. Now Berk-Hatha is unusual - they never split the stock - and is trading at $83,000 a share.

An index fund is a fund (provided by all the major mutual fund firms) is supposed to mimic the performance of a certain index, say the S&P 500 Index. The fund will go out and invest in stocks in equal weights to their weight within the S&P 500. The fund is ranked based on how identically its performance matches the performance of the index it is supposed to match. The benefit to the small investor is, instead of going out and investing in 500 different stocks, you can invest in a lone mutual fund which does that for you at greatly reduced cost.

Mutual of Omaha Warren is Buffett's darling.

should read

Mutual of Omaha is Warren Buffett's darling.