The Observation Deck

Senior citizens must be either really naive or incredibly complacent.

Our country (by way of the Fed), in an effort to recapitalize the banks and prevent interest rates from swallowing up our federal government, has reduced the rate of interest one can safely earn on a LIFETIME of savings to, well, almost nothing. Today, a safe rate of return that does not lock you into years of duration commitment pays well under one percent. It was just 3-4 years ago that you could get around six percent. Heck I’m old enough to remember when banks were required by law to pay 5.25% on savings accounts.

Seniors should be SCREAMING FROM THE ROOFTOPS. Seniors should be effing pi$$ed as all get out. I guess there must be two types of seniors, (1) those that have more than they will ever need, and (2) those that have nothing and are on the dole. Because any senior in between is getting reamed in a really big way.

Any senior that has saved, say, $500,000 and was planning on earning $30,000 a year on it has seen their rate of return shrink to practically nothing. What our country has done to them is nothing short of the confiscation of their entire life savings. When you are in your 60’s, 70’s and up, your savings are worth what they earn. And when the potential earning fall by say 80%, the value of your savings falls by 80%. Which is exactly what has happened.

Someone please tell me why DC is not fending off a national mall full of seniors….

If one had invested in long term cds a few years ago, one would still be earning at the higher rate. And when those cds mature, no law says you have to renew them; you are supposed to be able to look around and find a more lucrative conservative investment. In case you haven't noticed, the stock market did very well the last year.

And I don't think all seniors are suffering; their mortages are paid, they get all kinds of special deals, and they don't have big families to support.

People who panicked and sold their investments at the bottom of the market, and those who have lost jobs, are suffering, and I think they will benefit from the low interest rates as they rebuild their lives

Tim -

WTH are you referring to when you say seniors on the dole.

First of all that's slang in England. Second, Social Security isn't a handout, it's something we paid into and no matter what is claimed, we did our jobs, many of them. Paid into it faithfully out of our hard earned paychecks and I for one, don't expect to be treated that way.

You should be ashamed of yourself.

That's not the truth Roy. There is an account and it is solvent.

The shortfalls have always been reported because conservatives want to put their hands in the cookie jar.

In many ways social security is very like the dole, or at least more like the dole than an annuity or other insurance program.

Constant and generous cost of living allowances are something you would expect in the dole, but not from an annuity.

Skewing of benefits in favor of lower income people is a feature of social security that seems very like the dole.

I think few actuaries would consider any part of social security truly solvent, unless they were government employees paid to say it is solvent. Its a government program and few if any of them are solvent.

There is no actual fund because social security buys government bonds rather than holding or investing the money. So what they actually have is a stack of IOUs backed by the full faith and credit of the US government, that same government that recently considered again whether to raise the limit on the national debt; if they hadn't raised it, they would have had to start defaulting on those bonds. There are few prospects that congress will get spending under control and be able to pay off some of those bonds.

And if they had not done a lot of tinkering with social security in recent years, they would be even closer to insolvency. One might have noticed that they recently raised the full-benefit retirement age by two years; who knows how far they will raise it by the time our kids want to retire.

Running a program like social security is certainly not easy. You can't predict a lot of events that will impact it, like a baby boom, or bust, or a war, or people living longer.

I don't understand why shortfalls have been reported because conservatives want to get their hands in the cookie jar. Is that supposed to make sense?

the seniors were not very smart. it was easier to trick them into voting for Ronald Reagan. The Reagan-Greenspan team initiated the same formula we've been using for the last 30 years: lower interest rates continually.

The Seniors are still not very smart. they keep voting for the guy who reminds them the most of Ronald Reagan.

Social Security is still running at a surplus. if it is not running at a surplus, it is just running like the rest of the Federal Government. Reagan proved deficits don't matter.

Kasich goes out of his way to ask fundholders from asia or europe to build factories in Ohio. American big Fundholders have little industrial talent: they invest their funds in bidding up commodities and stocks and derivatives. or paying folks in asia and south america to do it.

every dollar you save outsourcing manufacturing means x-times that many dollars being spent on rent, crime, remedial education, fat camps, sprawl, Mtv Reality programming, and trash collection.

Jimmy Carter was the last reasonably intelligent and decent President we had. Ronald Reagan ushered in the age of Voodoo economics.

with todays media, Only Republicans can get away with raising taxes. Only Democrats can get away with cutting programs. Bill Clinton was a hillbilly, so that gave him extra pull with republican voters.

All five of the last presidents have embraced Globalism and free trade deals: All of the last five presidents were enemies of America.

I don’t normally resurrect dead threads, but I just read an article that reminded me of the thread I started a little while back. It regarded the damage being caused to the financial well-being of many senior citizens, and all savers, by the Fed’s current zero interest rate policy (“ZIRP”). And specifically, the Fed’s recent assertion that ZIRP will be enforced for at least two more years (which was intended, and apparently has, “calmed” the stock market).

Below is the link to the article I just read….

Bernanke Pledges to Screw Your Grandmother for at Least Two More Years

If after reading this article you are not INCREDIBLY pissed off, then either you do not have a conscience or you do not have a clue....

The money quotes….

“In 2007, before the Wall Street created financial collapse, savers and risk averse senior citizens could earn 5% in a money market fund, 5.5% in a 2 year CD and 6% in a 5 year CD. Fast forward four years to 2011. Savers and seniors are getting average interest rates on 6-month CDs this week of 0.58% nationwide, according to Bankrate.com. Rates on one-year CDs fell this week to 0.86%, while 5- year CDs fetched 2.04%. Money market funds are paying a pitiful 0.16% on average. The widow that was able to generate a risk free $6,000 per year only four years ago has only been able to generate less than $500 per year for the last three years. In addition, the government manipulated CPI, as calculated by the drones at the Bureau of Labor Statistics, was used to deny senior citizens an increase in their Social Security payments for the last two years. Meanwhile, the prices of food, fuel, clothing, insurance, medical care, and local taxes have been skyrocketing due to Federal Reserve created inflation. Do you think the number of Americans on food stamps surging from 26.3 million in 2007 to 45.8 million today has anything to do with Bernanke’s zero interest rate, inflationary policies?”

“I wonder what goes through Ben Bernanke’s mind as he sits in his gold plated boardroom in the majestic Marriner Eccles building in Washington DC and decides to screw grandmothers in order to further enrich Wall Street bankers. He just pledged to keep interest rates at zero percent for two more years. Ben is a supposedly book smart man. Does he have no guilt or shame for what he has wrought? How does he sleep at night knowing he has created bloody revolutions around the globe due to his inflationary zero interest policy? People are dying because he has decided that an elite group of Wall Street bankers who recklessly brought down the worldwide financial system in 2008 deserve to be kept alive and enriched at the expense of the many.”

what were the interest yields on all those bonds and big contracts that re-capitalized banks and businesses during the new deal and world war II and the interstate highway building era?