Friday, September 01, 2006

Wal-mart and Social Security

Ok, I’m annoyed.

I’m an accountant in real life so when people talk about money and retirement and savings and stuff my ears perk up.  Why?  Because most people who talk about money and retirement and savings and stuff—even those who get paid for it—don’t know squat about money and retirement and savings and stuff.  What they know is numbers and bank accounts. 

As an example, a “good financial advisor” might tell you that if you can borrow $50,000 at 2% and earn 5%, you should borrow the money and invest it to take the 3% profit and pay off the loan incrementally.  The math says that’s a good plan.  A really good financial advisor will tell you to not only fire that guy but to kick him in the nuts as well because not only are you not guaranteed a 5% return, you’re not guaranteed a 2% cost either.  Also, the $50,000 will look an awful lot like $40,000 once you’re done spending the first $10,000 off the top (don’t lie, you’ll do it…  $50,000 in the bank looks an awful lot like at least 1 vacation, a new car, and a rainy day fund) and even if you do get a 5% return all of that 3% of “profit” will go towards paying down the debt, and then some.  A really good financial advisor will tell you to spend less than you earn and put away $125 each month so that at the end of the year you’ll have $1500 (3% of 50k) PLUS INTEREST that’s working for you, not CitiBank, because you know CitiBank will be taking that money and investing it for real returns and laughing at you.  There’s a reason CitiBank lives in a giant glass tower and you live in a refrigerator box.


So that brings me to Wal-Mart and Social Security.  I just read a little screed about some lady who’s 75 with 2 surgically replaced knees and HAS to work at Wal-Mart to make ends meet.  She’s a 15 year employee who’s probably going to die there greeting people at the door.  That’s unfortunate, but it’s not the tragedy.

Over the last 15 years she didn’t save a dime.  She probably didn’t make enough to save much, such is the life of a shift worker at WalMart.  That’s not even the real tragedy, though.

The tragedy is that she was counting on Social Security and Medicare to take care of things in her sunset years because she’s paid her dues all her life.  The tragedy is that Social Security is not and cannot take of her even though she expected it to (wrongly, but that’s another discussion), and it promised that it would (also wrongly, but again-another discussion).  The even greater tragedy is that people like me who are planning on not getting one red cent from the government (because people like me know that the government can neither be relied upon nor should be relied upon) are going to be getting a social security check at the expense of taking care of people like her who truly need the government to step in and make sure she doesn’t have to die in a Wal-Mart.  People like me are going to drain the system getting cute little checks that will fund a dinner out or two each month while people like her who absolutely need these checks in order to make sure they eat at all will be working at Wal-Mart for the rest of her life.

Aside from the fact that companies like Wal-Mart job the system and pay too little for too long and screw all of us into paying too much in hidden costs for cheap goods and services (hidden costs like social security in lieu of a real pension or living wages and medicare instead of insurance) and that prop up evil empires like communist China, the fact people are being given blank checks and told “the government will take care of you” even though everybody and their dog knows that the government cannot and will not do it even though it’s going to promise to keep giving people like me who don’t need the money cute little checks and make grandma eat alpo for the duration of their lives is an absolute god awful tragedy of Homeric proportions!!!!



(Blue Bell ice cream theme song… blue bell…  blue bell…  best ice cream in the country…)


Anyway, when I read sob stories about people having to live the rest of their retired lives in near poverty while working on knees that have been reconstructed, my hackles get raised.  It’s not enough that they live their entire lives not making enough to save money (people who simply choose to be lazy and not save, I have a different lack of sympathy for you), but when they finally reach their retirement years that should be spent relaxing they discover that the retirement insurance—their Social “Security”—is no retirement at all.  It’s not even enough to starve on.  Meanwhile, the guy down the street who did save and is drawing a pension is getting the same benefit.  While you’re starving and working yourself literally to death, those with plenty are getting paid even more.  For no other reason at all, that is the absolute best reason for reform of the social security system.  I don’t care if I get a check.  I’m already resigned to the fact that I won’t be getting anything from the SSA.  However, now is the time to act to ensure that there is something there for those who really do need to get something—and only those who need assistance will receive it.


Happy labor day.


Blogger Steve Bezner said...

The taxes on that 3% gain will also lower the return to something around 2.5%. Of course, not too many bankers are going to loan the 50k without some collateral, which you might put to better use in the first place.

Yeah, I love analyzing these types of games as well. And agree with your assessment of firing him. ;)

8:20 AM  

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