Interestingly, laypeople and engineer types sometimes diverge significantly in their verdict. I remember one guy who was on a jury where the defendant incinerated his wife's body. Hung jury because the laypeople didn't believe he'd killed her.
Proving someone incinerated someone's body doesn't prove anything about who (if anyone) killed that person. However, the act of incinerating the body may, when considered with other evidence, contribute to a guilty verdict on the murder charge.
For example, suppose the prosecutor makes a very good case but the defendant claims (but can offer no evidence beyond his own word) that he was at home watching TV when the murder occurred and he didn't even know the victim was dead until after the police cuffed him and arrested him. In this case, if the prosecutor proves that the defendant in fact incinerated the body before being arrested and knew whose body it was (disproving the defendant's claim that he had no idea the victim was dead), the jury is well within its "rights" to attach little if any weight to the remainder of the defendant's alibi (that he was watching TV at the time of the murder).
then the juror who attempted an overt nullification may force a mistrial.
But if, once the jury begins deliberations, that juror convinces enough (generally "all") of the other jurors to follow their lead and return a "not guilty" verdict, it's completely over for that charge. The defendant can't be tried again for the same charge even if it becomes clear that one or more jurors contributed to the "not guilty" verdict for the "wrong" reason.
If, during deliberations, other jurors report to the judge that the "jury nullification guy" is refusing to deliberate, he may be kicked off the jury and replaced by an alternate and the deliberations would start over.
My concern is that the more the government constrains the investment choices and ability to shift among them in an effort to forcibly reduce risk, the more people are going to expect guaranteed returns if those restrictions result in real losses.
About the only "guaranteed" returns are on US bonds and those returns are only guaranteed through maturity and may be negative after inflation is taken into account (esp. on long term bonds). Although, of course, even these are only "guaranteed" because of an overall assumption that if the US actually defaults permanently on principal or interest, everyone in the US will have more to worry about than the returns on financial investments.
Of course, even SS benefits are not "guaranteed", they are only as safe as the last crop of politicians that were elected into office think they need to be. The older masses think, perhaps rightfully, that it's unlikely that SS benefits will be cut significantly in their lifetime because they comprise a strong voting block (also, holding this notion is attractive because any other conclusion is just too depressing).
The assumption that broad US stock indexes are "safe" and, over the long term, give a positive return just because it has in the past is not an indicator of future performance. The past results are from times when the US was the dominant economic and military power in the world. It's most likely, IMHO, that the US is now early in a long steady and permanent (in human generation terms) decline relative to the rest of the world. This is in part due to the increasing power of other economies with large populations (China and India) on the world stage. It is also partially due to an actual decline in education/work ethic in the US culture (imagine the horrible position the US would be in if we didn't import STEM students and workers) and, increasingly, the US's historical role as an immigrant magnet will weaken as there's more free countries (so the desire to escape oppression is not as strong) and as there are more high value opportunities in the country the person already lives.
For "past performance" predicting "future performance", one only needs to look at the US residential real estate market for a cautionary tale. For many decades, it was widely claimed and believed that housing was a good (i.e., across the broad market, always yielding positive real returns after general inflation was considered) investment over the mid-term or longer time frame. Entire generations were raised believing this was a tautology. This helped prop the market up in spite of the impossibility of it remaining true in the long term (since salaries necessarily track inflation roughly, if inflation and therefore salary growth is I% and housing appreciation is H% and H>I, eventually houses would cost more than the lifetime earnings of most families and the game has to end as there's no money left for food and all the suckers die of starvation in their McMansions). This was a self fulfilling prophecy which is now terminated because several generations have just seen actual evidence it's not true and now view home ownership as the risk it is -- it's a place to live, not an investment vehicle for the individual "homeowner". The stock market is similar -- it's a bit of a Ponzi scheme -- we all agree that somehow the value of Google is 200B USD (i.e., almost $30 for every human on earth including starving infants living in refugee camps; or, almost $640 for every human in the US) rather than demanding that dividends from profits give a continuing return greater than inflation (speculation about Google's future market value in twenty years is, just that, speculation). (Yes, in spite of this, I do invest in stocks in spite of all this -- I'll play the game, but know I can lose big time if I miss the eventual paradigm shift).
Also, SS retirement benefits include a strongly progressive attribute. Roughly speaking, under current law, the first dollar a worker (and employer) pay into SS returns six time
If one of the available investments includes very low risk but low yield (say treasuries) investments which seems entirely appropriate (esp. as one nears retirement), transferring funds into that investment surely would be allowed. As a result, the common, but often destructive, panic reaction in a down market would still be available.
If the Fed401(k) prevented transfers among available investments it would not only distort the equity markets, it would also implicitly make the government responsible for the resulting investment results. Remember that Freddie and Fannie were not government agencies anymore nor was there any requirement to bail them out, yet the Feds did. I'm pretty sure the Fed would end up with little political choice but to do the same to Fed401(k) holders if they constrained investors choices such that investors unnecessarily lost a significant portion of their retirement savings.
Also, isn't participation in TSP voluntary? That's quite different than a program w/mandatory participation by all workers.
Very true. It doesn't apply to my area however - partially because an annual 10% equity hit is so high due to high housing prices. Of course, in this area, housing isn't likely to drop by quite that much on an annual basis before the market stabilizes.
Although, the analysis in my personal case is somewhat colored by the fact that I'm willing to rent a place that I would never be willing to buy due to age, condition, proximity to where I might be working three years from now, and/or neighborhood so it's not quite a Toyota to Toyota comparison.
Likewise, the top 1% are almost the only people making any fucking income above the poverty line, or even any money at all, so are, in fact, almost the only people paying income tax.
The first hint that perhaps the entire comment should be ignored is the sophisticated approach of resorting to profanity rather than logic.
The second hint is that this claim is ridiculous - check here for a quick summary or here for more details on who/how many pay what in income taxes.
The housing crash was almost entirely due to circumstances that couldn't be foreseen by anyone even if they did pay attention.
The underlying broken mechanism that allowed the housing bubble was hard to understand in advance unless one was quite sophisticated. I will admit that I was scratching my head in amazement that these ridiculous loans were being made because I didn't research the underlying games (CDOs etc) that made it possible to, seemingly, offload the risk to someone else.
However, simple math showed that real (post inflation) real estate appreciation could not continue anywhere near the rates of the early/mid 2000's. Continued appreciation at that rate for a few more years would have resulted in housing prices so high that, at historical interest rates, virtually no one would have been able to buy their first house even if they spent 100% of their income on mortgage payments. Without new entrants into the market to (at least) replace those that die, the supply would quickly outstrip demand and housing prices would have to correct to some extent.
It was obvious that people were buying homes that they could not afford (no down, liar loans, ARMs with resets five years down the road) and that these sales only made sense if the buyer was relying on continued dramatic appreciation so they could flip the place for a big profit. From this, one could easily anticipate a significant correction (since, as discussed above, that appreciation just couldn't continue). True, the exact timing and magnitude of the crash was probably impossible to predict, but clearly buying a home was a speculative act and it didn't take more than a high school education to realize that. The speculative nature was quite unfortunate for those that for some reason had to buy a house (such as there just being no rentals available in the area they worked).
For future reference, housing prices can never outstrip general wage inflation for an extended period of time. Cultural shifts (most notably in this case, many more dual income households in 2000 than in 1960 so instead of a house having to be affordable on one income, it now had to be affordable on two incomes) can result in relatively permanent real appreciation. However, the number of such cultural shifts that support price increases (rather than, for example, decreases) are limited.
And, no, this is not theoretical. We sold our primary residence of over 20 years at nearly the top of the local market (within a couple months probably - by the time it closed, the buyer almost certainly could not have sold it for what they paid) and became (and remain) happy renters until the correction is over - hopefully within five years although it's hard to know given the overhang of underwater mortgages nationwide. The exact timing was luck (and we cut it scary close it turns out), but it was clearly time to bail out and bail out we did.
Agreed that in the short term (ten years) there's little concern that the US government won't pay its debt no matter what it takes -- the only risk to a ten year treasury bond held to maturity is inflation (which, BTW, is significant). If you have cash and have to store it somewhere "safe", there are few other alternatives.
That however says little about the outlook for the US economy thirty or fifty years from now.
It was most certainly cashflow negative during the 2011 "payroll tax holiday".
Okay - I'd believe that if one ignores that a transfer from the general fund to the SS trust fund was made to offset the tax holiday. This is mostly semantics - a tweak to the income tax code could have had nearly the same net effect (assuming that the tweak allowed for a refundable credit even though no taxes were due). Sticking the SS trust fund in the middle was mostly an accounting simplicity and a way to have a immediate stimulus effect instead of delaying it for most people until April and avoiding "requiring" some people who normally don't file income taxes to do so just in order to get the credit. It was not really a change to Social Security taxation, benefits, or funding except in name only.
There has never been a 20-year period in which sticks performed less when than the effective returns of Social Security
Not long ago, one probably could have said "There has never been a 20-year period in which real returns on residential real estate performed less then than the effective returns of Social Security". Past performance does not predict future gains.
and as one nears retirement the plan can force you into bonds.
This is devastating to someone who is forced to move stock holdings out of a extended down market to put it into bonds. People consistently make this mistake with their 401(k)s without any prompting - why force everyone of a certain age band to do so?
It's really hard to under-perform your "investment" in Social Security
In the aggregate, it's true that historically that's been the case. For a particular individual however it's very easy. Surely in a Fed401(k), a person would be allowed to move from stocks to bonds (or cash) whenever they wanted (else, it would be pretty stupid to pretend that the Fed401(k) actually had much in the way of personal choice in it). I've known a lot of people that foolish either overreacted to a big market drop and got out of stocks at just the wrong time or who stupidly invested inappropriate amounts of money in "hot" stocks. Those that picked Apple, IBM, and Google did well; those that picked WebVan, Pets.com, and the "original" GM pretty much lost it all. The folks who do well (either by insight or by luck) of course retire MUCH more comfortably than they could have on SS. Unfortunately, for every one of those, even to maintain historical average yields, there will be others who are nearly destitute by retirement.
Remember, Warren Buffet's picks are included in the averages! For every win he makes, someone loses relative to the "average". Be very careful with "averages". This is part of the reason that Monte Carlo simulations for retirement planning are, rightfully, now very popular -- they can show up the devastating deviations from variations in the "market average" over time pretty bluntly. This is also the reason that the low yields for SS make some sense - they are very low risk and hence have very poor returns. In the absence of structural collapse that makes it impossible for SS to meet its obligations (not an impossibility, but such an event would probably result in a collapse of the US stock market as well, thereby invalidating assumptions about the alternatives), the only real risk to SS is political. The political risk to SS is small for people who are over perhaps more than 40 years old and don't live too long beyond their "average life expectancy" as these groups, and the next wave who is desperately hoping that SS will help them (although they will be wrong). will have enough political influence to keep SS from being decimated until they die. However, for those under some age, perhaps 40, the outlook could be quite grim as by the time they hit 69 years old, they will be outnumbered by voters who know they will see not a penny from SS
IIRC, SS wasn't cash flow negative in 2011 - but only because of the income from interest on the funny bonds. But, there's no question about the trend as you say.
Although I've liked the notion of a Federally mandated 401(k), I don't think it's practical. The average person's education and math skills in the US are simply inadequate (thanks in part to our failed education system and the low expectations US society/culture has for children). My guess is that if one picks a random sample out of the US population aged 18 or over, well over half could not explain compounded interest, let alone compute it - and that understanding seems to be necessary but nowhere nearly sufficient skill to manage one's own investments.
While it's tempting to think that individuals would take "individual responsibility" for their retirement via a "Fed401(k)", it won't end up that way. Those that lose money or realize inadequate returns (due to bad investment decisions, being taken advantage of, or just bad luck) will need money to retire on and, ultimately, we are not going to let them starve in the streets (at least until the entire US economy collapses relative to the world so a large proportion of the population is in such a state) and the government will have to step in. At that point, the government will have no funds set aside for such purposes.
The fact that the government limits the investment options will make the government even more responsible for dealing with the problem. The money the "little guy" lost will be sucked up by the investment banks/fund managers etc. and eventually will have to be replenished by the government -- i.e., this will ultimately result in a massive transfer of wealth from the taxpayer to the corporate world with the average worker as an intermediary. But, the banks and investment houses would love it -- a whole crop of ignorant suckers they can suck money from for decades!
Also, SS benefits are highly progressive and a Fed401(k) would not replicate this without a lot of politically unpopular tweaking. Roughly speaking, the first penny an employee and employer pay in SS payroll tax returns six times the retirement benefit as the last penny put in before the cap. As well, SS retirement benefits are taxable if one has sufficient outside income (including required 401(k) and IRA distributions, work, other investment income - including tax exempt interest) which results in benefits paid to people who DO plan for their own retirement routing some of the SS benefits being routed into the Federal general fund - another "progressive" (depending on how one uses that term) feature of SS.
Unfortunately, due in a significant part to programs spawned directly or indirectly from the New Deal and Great Society, generations of Americans have lost the notion of "individual responsibility" and expect that the government will take care of them even if they don't plan ahead. I don't see how to turn this around except by a horribly painful realignment of necessity - i.e., something worse than the Great Depression. Unlike Greece, whose citizens can still expect to be slackers sucking at the government teat, in the current economy there's no one that could afford to bail the US out. Perhaps, by the collapse, the US will be small enough in economic and population terms that we can get UN food rations distributed in our refugee camps - if China and India are in a good mood that year.
Generally that's correct. But this analysis overlooks the fact that if SS funds were not loaned back the government...
The government would have to borrow this money somewhere else. This would probably drive up interest costs for US debt as the quantity sold would have to increase., and
SS would have to do something with those funds - they could just park them and let inflation eat away at them or invest them somewhere safe. Where would the "safest" place be? Well, US Federal debt would be the obvious choice (Solyndra, Pets.com, and WebVan.com may not be great places). They could either buy these at auction, or the secondary market.
This alternative is more similar than dissimilar to what is being done currently.
One can argue if US Federal debt is the "safest" place to protect principal, but it's generally accepted to be at this time.
Also, the SSA can "sell" these bonds -- just only back to the Federal government. In other words "redeem". To date, SS still has a surplus so there has not been a need for redemption.
Unions also suck at negotiating for some of their members. Such members often include the hardest working, smartest, most knowledgeable, and/or most ambitious workers who do not get premium pay for their skills and instead get paid the same as the bozo next to them.
An easy system can dramatically increase compliance.
I lived in an area that implemented a program to pick up presorted recyclables. The resident sorted recyclables into three bins - maybe paper, glass, metal (it's been a long time). Hardly anyone bothered.
Then they implemented the Green Bin (plant waste from yard), Blue Bin (clean mixed recyclables), and Black Bin (other trash and garbage). The three bin system for all waste was well tolerated and most people do make an attempt to get it right.
The carbon in most material that can be composted originates from plant life (unlike, for example, plastics made from petroleum). These materials temporarily sequester carbon and it is released eventually. So, at least from the carbon standpoint, burning such materials seems no worse than composting them.
As far as other pollutants, clean efficient incineration will minimize the pollutants - however, most people don't have such incineration facilities available to them in/around their own home.
If, for some reason, the compostable material contains toxins (heavy metals for example), burning them could release those into the air, composting them could end up with with them in human and wildlife food chain. In this case, it seems like a properly designed and maintained land fill would be a better place in the short term (decades or centuries).
And in this case, I would argue that it's not a backup until there are two backup copies, one preferably off-site. This is really more of an archival operation - the primary is about to be destroyed seemingly making the first backup the primary.
If the data on these machines wasn't already backed up as part of normal ops, one wonders why the data is suddenly so important now. Perhaps there's a good reason for this though (legal or some other PHB thing).
Excess capacity costs money. Money is borrowed directly or indirectly. Those who loan it expect a return on investment (if borrowed from a bank, they expect interest, if borrowed from shareholders indirectly, they want ROI).
Since "excess" capacity has negative ROI, a company would rarely choose to implement it intentionally. Usually excess capacity arises from bad planning.
You know, golf and tennis are "white folk" sports also. It's unfortunate that the Williams sisters and Tiger Woods didn't know that -- they could have saved themselves from the agony of success.
The point I meant to make is that I've had fairly good luck with offshoring because the goal was not "saving money" - it was to expand the available highly skilled candidate pool. I.e., not expecting to pay less (although five or ten years ago, one could) and not lowering standards for offshore developers.
Also, I should have clarified, my comments were relevant only to India where there isn't a language barrier (or, that unfortunate cultural trait prevalent in some countries of nodding [figuratively over a phone call] in agreement while not agreeing with, or maybe even understanding, a word the other person is saying).
Good luck on that getting something on time -- sounds like you may want to schedule 80 weeks soon and/or find another job before the fecal matter hits the rotating air circulation device:(
If the main criteria for hiring is "cheap" and/or the goal is "offload work no one wants to do" and/or you treat the offshore developers as "out of sight, out of mind" and/or as "second class citizens", you may not do so well offshore. However, if you hire to high standards, pay well, and give the offshore teams interesting work, it can be a great source of talent. Obviously remote development shifted 12 hours brings its own challenges and opportunities and that needs to be factored in.
In recent years, as India's own software industry expands, it appears that more great developers in India are choosing to stay home rather than pursue the painful US immigration process. The unmistakable gradual, yet likely irreversible IMHO, decline of the US (both in relative and absolute terms) probably contributes to this as well. This of course means there are more good offshore developers and less in the US and the offshore developers are costing more.
(For example, on the "cost more" issue, I know of one large company with substantial development operations worldwide whose recent US raise pool was 3% while the raise pool for India was substantially over 10%.)
(And, to the AC who is going to ask if I'm in middle management or related to one of the CxOs - Nope, I'm a developer/sometimes first level manager.)
I've heard that claim before by a zealot who was defending not doing design with the absurd justification that went something like "customers don't buy designs so they don't add customer value". Well, guess what, customers don't buy C++ code either so all that time specifying the algorithm in C++ is, like design, non-CVA.
Even if one wants to count time spent writing C++ code as CVA, it seems clear that most time spent thinking between typing lines of code is indistinguishable from design (since, that's the activity the brain is doing that time if one is competent in the language and tools) so needs to be counted as non-CVA.
Pedantic agile zealots are among the most annoying people in the world.
If you can't trust your first level managers to understand who is contributing w/o a pile of metrics, there is a simple solution -- get new managers.
ICs will game metrics much more than managers. Good managers rarely have a vested interest in favoring one developer over another except to the extent that one developer contributes more than another to getting reliable systems meeting requirements to the customer.
If you have metrics that "managers can't game", it means that ICs can game them because they must be very objective (i.e., your review is 2.954 because your $METRIC1 was 68, your $METRIC2 was 93, your $METRIC3 was 17).
Once you give anyone a list of metrics they will be measured by for raises, bonuses, and promotions, they will optimize for "good metrics" rather than actually keeping the customer happy. As well, since such metrics must include quite a few "quality" measures, this easily result in in-fighting within the team. Alan will say "No, this bug isn't attributable to me, it's attributable to Jim because the documentation on his method doesn't make it clear enough that division by zero is undefined". Whoever wins this battle (after arbitration is complete and the appropriate developer's $METRIC_QUAL has been decremented) will find it harder to work with the other developer in the future.
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Proving someone incinerated someone's body doesn't prove anything about who (if anyone) killed that person. However, the act of incinerating the body may, when considered with other evidence, contribute to a guilty verdict on the murder charge.
For example, suppose the prosecutor makes a very good case but the defendant claims (but can offer no evidence beyond his own word) that he was at home watching TV when the murder occurred and he didn't even know the victim was dead until after the police cuffed him and arrested him. In this case, if the prosecutor proves that the defendant in fact incinerated the body before being arrested and knew whose body it was (disproving the defendant's claim that he had no idea the victim was dead), the jury is well within its "rights" to attach little if any weight to the remainder of the defendant's alibi (that he was watching TV at the time of the murder).
But if, once the jury begins deliberations, that juror convinces enough (generally "all") of the other jurors to follow their lead and return a "not guilty" verdict, it's completely over for that charge. The defendant can't be tried again for the same charge even if it becomes clear that one or more jurors contributed to the "not guilty" verdict for the "wrong" reason.
If, during deliberations, other jurors report to the judge that the "jury nullification guy" is refusing to deliberate, he may be kicked off the jury and replaced by an alternate and the deliberations would start over.
My concern is that the more the government constrains the investment choices and ability to shift among them in an effort to forcibly reduce risk, the more people are going to expect guaranteed returns if those restrictions result in real losses.
About the only "guaranteed" returns are on US bonds and those returns are only guaranteed through maturity and may be negative after inflation is taken into account (esp. on long term bonds). Although, of course, even these are only "guaranteed" because of an overall assumption that if the US actually defaults permanently on principal or interest, everyone in the US will have more to worry about than the returns on financial investments.
Of course, even SS benefits are not "guaranteed", they are only as safe as the last crop of politicians that were elected into office think they need to be. The older masses think, perhaps rightfully, that it's unlikely that SS benefits will be cut significantly in their lifetime because they comprise a strong voting block (also, holding this notion is attractive because any other conclusion is just too depressing).
The assumption that broad US stock indexes are "safe" and, over the long term, give a positive return just because it has in the past is not an indicator of future performance. The past results are from times when the US was the dominant economic and military power in the world. It's most likely, IMHO, that the US is now early in a long steady and permanent (in human generation terms) decline relative to the rest of the world. This is in part due to the increasing power of other economies with large populations (China and India) on the world stage. It is also partially due to an actual decline in education/work ethic in the US culture (imagine the horrible position the US would be in if we didn't import STEM students and workers) and, increasingly, the US's historical role as an immigrant magnet will weaken as there's more free countries (so the desire to escape oppression is not as strong) and as there are more high value opportunities in the country the person already lives.
For "past performance" predicting "future performance", one only needs to look at the US residential real estate market for a cautionary tale. For many decades, it was widely claimed and believed that housing was a good (i.e., across the broad market, always yielding positive real returns after general inflation was considered) investment over the mid-term or longer time frame. Entire generations were raised believing this was a tautology. This helped prop the market up in spite of the impossibility of it remaining true in the long term (since salaries necessarily track inflation roughly, if inflation and therefore salary growth is I% and housing appreciation is H% and H>I, eventually houses would cost more than the lifetime earnings of most families and the game has to end as there's no money left for food and all the suckers die of starvation in their McMansions). This was a self fulfilling prophecy which is now terminated because several generations have just seen actual evidence it's not true and now view home ownership as the risk it is -- it's a place to live, not an investment vehicle for the individual "homeowner". The stock market is similar -- it's a bit of a Ponzi scheme -- we all agree that somehow the value of Google is 200B USD (i.e., almost $30 for every human on earth including starving infants living in refugee camps; or, almost $640 for every human in the US) rather than demanding that dividends from profits give a continuing return greater than inflation (speculation about Google's future market value in twenty years is, just that, speculation). (Yes, in spite of this, I do invest in stocks in spite of all this -- I'll play the game, but know I can lose big time if I miss the eventual paradigm shift).
Also, SS retirement benefits include a strongly progressive attribute. Roughly speaking, under current law, the first dollar a worker (and employer) pay into SS returns six time
If one of the available investments includes very low risk but low yield (say treasuries) investments which seems entirely appropriate (esp. as one nears retirement), transferring funds into that investment surely would be allowed. As a result, the common, but often destructive, panic reaction in a down market would still be available.
If the Fed401(k) prevented transfers among available investments it would not only distort the equity markets, it would also implicitly make the government responsible for the resulting investment results. Remember that Freddie and Fannie were not government agencies anymore nor was there any requirement to bail them out, yet the Feds did. I'm pretty sure the Fed would end up with little political choice but to do the same to Fed401(k) holders if they constrained investors choices such that investors unnecessarily lost a significant portion of their retirement savings.
Also, isn't participation in TSP voluntary? That's quite different than a program w/mandatory participation by all workers.
Very true. It doesn't apply to my area however - partially because an annual 10% equity hit is so high due to high housing prices. Of course, in this area, housing isn't likely to drop by quite that much on an annual basis before the market stabilizes.
Although, the analysis in my personal case is somewhat colored by the fact that I'm willing to rent a place that I would never be willing to buy due to age, condition, proximity to where I might be working three years from now, and/or neighborhood so it's not quite a Toyota to Toyota comparison.
The first hint that perhaps the entire comment should be ignored is the sophisticated approach of resorting to profanity rather than logic.
The second hint is that this claim is ridiculous - check here for a quick summary or here for more details on who/how many pay what in income taxes.
The underlying broken mechanism that allowed the housing bubble was hard to understand in advance unless one was quite sophisticated. I will admit that I was scratching my head in amazement that these ridiculous loans were being made because I didn't research the underlying games (CDOs etc) that made it possible to, seemingly, offload the risk to someone else.
However, simple math showed that real (post inflation) real estate appreciation could not continue anywhere near the rates of the early/mid 2000's. Continued appreciation at that rate for a few more years would have resulted in housing prices so high that, at historical interest rates, virtually no one would have been able to buy their first house even if they spent 100% of their income on mortgage payments. Without new entrants into the market to (at least) replace those that die, the supply would quickly outstrip demand and housing prices would have to correct to some extent.
It was obvious that people were buying homes that they could not afford (no down, liar loans, ARMs with resets five years down the road) and that these sales only made sense if the buyer was relying on continued dramatic appreciation so they could flip the place for a big profit. From this, one could easily anticipate a significant correction (since, as discussed above, that appreciation just couldn't continue). True, the exact timing and magnitude of the crash was probably impossible to predict, but clearly buying a home was a speculative act and it didn't take more than a high school education to realize that. The speculative nature was quite unfortunate for those that for some reason had to buy a house (such as there just being no rentals available in the area they worked).
For future reference, housing prices can never outstrip general wage inflation for an extended period of time. Cultural shifts (most notably in this case, many more dual income households in 2000 than in 1960 so instead of a house having to be affordable on one income, it now had to be affordable on two incomes) can result in relatively permanent real appreciation. However, the number of such cultural shifts that support price increases (rather than, for example, decreases) are limited.
And, no, this is not theoretical. We sold our primary residence of over 20 years at nearly the top of the local market (within a couple months probably - by the time it closed, the buyer almost certainly could not have sold it for what they paid) and became (and remain) happy renters until the correction is over - hopefully within five years although it's hard to know given the overhang of underwater mortgages nationwide. The exact timing was luck (and we cut it scary close it turns out), but it was clearly time to bail out and bail out we did.
Agreed that in the short term (ten years) there's little concern that the US government won't pay its debt no matter what it takes -- the only risk to a ten year treasury bond held to maturity is inflation (which, BTW, is significant). If you have cash and have to store it somewhere "safe", there are few other alternatives.
That however says little about the outlook for the US economy thirty or fifty years from now.
Okay -- I give up. /. seems to have no idea where "Reply to This" should go in deeply nested threads :(
Argh... I wanted to put this reply here but somehow it ended up a level.
Okay - I'd believe that if one ignores that a transfer from the general fund to the SS trust fund was made to offset the tax holiday. This is mostly semantics - a tweak to the income tax code could have had nearly the same net effect (assuming that the tweak allowed for a refundable credit even though no taxes were due). Sticking the SS trust fund in the middle was mostly an accounting simplicity and a way to have a immediate stimulus effect instead of delaying it for most people until April and avoiding "requiring" some people who normally don't file income taxes to do so just in order to get the credit. It was not really a change to Social Security taxation, benefits, or funding except in name only.
Not long ago, one probably could have said "There has never been a 20-year period in which real returns on residential real estate performed less then than the effective returns of Social Security". Past performance does not predict future gains.
This is devastating to someone who is forced to move stock holdings out of a extended down market to put it into bonds. People consistently make this mistake with their 401(k)s without any prompting - why force everyone of a certain age band to do so?
In the aggregate, it's true that historically that's been the case. For a particular individual however it's very easy. Surely in a Fed401(k), a person would be allowed to move from stocks to bonds (or cash) whenever they wanted (else, it would be pretty stupid to pretend that the Fed401(k) actually had much in the way of personal choice in it). I've known a lot of people that foolish either overreacted to a big market drop and got out of stocks at just the wrong time or who stupidly invested inappropriate amounts of money in "hot" stocks. Those that picked Apple, IBM, and Google did well; those that picked WebVan, Pets.com, and the "original" GM pretty much lost it all. The folks who do well (either by insight or by luck) of course retire MUCH more comfortably than they could have on SS. Unfortunately, for every one of those, even to maintain historical average yields, there will be others who are nearly destitute by retirement.
Remember, Warren Buffet's picks are included in the averages! For every win he makes, someone loses relative to the "average". Be very careful with "averages". This is part of the reason that Monte Carlo simulations for retirement planning are, rightfully, now very popular -- they can show up the devastating deviations from variations in the "market average" over time pretty bluntly. This is also the reason that the low yields for SS make some sense - they are very low risk and hence have very poor returns. In the absence of structural collapse that makes it impossible for SS to meet its obligations (not an impossibility, but such an event would probably result in a collapse of the US stock market as well, thereby invalidating assumptions about the alternatives), the only real risk to SS is political. The political risk to SS is small for people who are over perhaps more than 40 years old and don't live too long beyond their "average life expectancy" as these groups, and the next wave who is desperately hoping that SS will help them (although they will be wrong). will have enough political influence to keep SS from being decimated until they die. However, for those under some age, perhaps 40, the outlook could be quite grim as by the time they hit 69 years old, they will be outnumbered by voters who know they will see not a penny from SS
IIRC, SS wasn't cash flow negative in 2011 - but only because of the income from interest on the funny bonds. But, there's no question about the trend as you say.
Although I've liked the notion of a Federally mandated 401(k), I don't think it's practical. The average person's education and math skills in the US are simply inadequate (thanks in part to our failed education system and the low expectations US society/culture has for children). My guess is that if one picks a random sample out of the US population aged 18 or over, well over half could not explain compounded interest, let alone compute it - and that understanding seems to be necessary but nowhere nearly sufficient skill to manage one's own investments.
While it's tempting to think that individuals would take "individual responsibility" for their retirement via a "Fed401(k)", it won't end up that way. Those that lose money or realize inadequate returns (due to bad investment decisions, being taken advantage of, or just bad luck) will need money to retire on and, ultimately, we are not going to let them starve in the streets (at least until the entire US economy collapses relative to the world so a large proportion of the population is in such a state) and the government will have to step in. At that point, the government will have no funds set aside for such purposes.
The fact that the government limits the investment options will make the government even more responsible for dealing with the problem. The money the "little guy" lost will be sucked up by the investment banks/fund managers etc. and eventually will have to be replenished by the government -- i.e., this will ultimately result in a massive transfer of wealth from the taxpayer to the corporate world with the average worker as an intermediary. But, the banks and investment houses would love it -- a whole crop of ignorant suckers they can suck money from for decades!
Also, SS benefits are highly progressive and a Fed401(k) would not replicate this without a lot of politically unpopular tweaking. Roughly speaking, the first penny an employee and employer pay in SS payroll tax returns six times the retirement benefit as the last penny put in before the cap. As well, SS retirement benefits are taxable if one has sufficient outside income (including required 401(k) and IRA distributions, work, other investment income - including tax exempt interest) which results in benefits paid to people who DO plan for their own retirement routing some of the SS benefits being routed into the Federal general fund - another "progressive" (depending on how one uses that term) feature of SS.
Unfortunately, due in a significant part to programs spawned directly or indirectly from the New Deal and Great Society, generations of Americans have lost the notion of "individual responsibility" and expect that the government will take care of them even if they don't plan ahead. I don't see how to turn this around except by a horribly painful realignment of necessity - i.e., something worse than the Great Depression. Unlike Greece, whose citizens can still expect to be slackers sucking at the government teat, in the current economy there's no one that could afford to bail the US out. Perhaps, by the collapse, the US will be small enough in economic and population terms that we can get UN food rations distributed in our refugee camps - if China and India are in a good mood that year.
Generally that's correct. But this analysis overlooks the fact that if SS funds were not loaned back the government...
This alternative is more similar than dissimilar to what is being done currently. One can argue if US Federal debt is the "safest" place to protect principal, but it's generally accepted to be at this time.
Also, the SSA can "sell" these bonds -- just only back to the Federal government. In other words "redeem". To date, SS still has a surplus so there has not been a need for redemption.
Unions also suck at negotiating for some of their members. Such members often include the hardest working, smartest, most knowledgeable, and/or most ambitious workers who do not get premium pay for their skills and instead get paid the same as the bozo next to them.
An easy system can dramatically increase compliance.
I lived in an area that implemented a program to pick up presorted recyclables. The resident sorted recyclables into three bins - maybe paper, glass, metal (it's been a long time). Hardly anyone bothered.
Then they implemented the Green Bin (plant waste from yard), Blue Bin (clean mixed recyclables), and Black Bin (other trash and garbage). The three bin system for all waste was well tolerated and most people do make an attempt to get it right.
The carbon in most material that can be composted originates from plant life (unlike, for example, plastics made from petroleum). These materials temporarily sequester carbon and it is released eventually. So, at least from the carbon standpoint, burning such materials seems no worse than composting them.
As far as other pollutants, clean efficient incineration will minimize the pollutants - however, most people don't have such incineration facilities available to them in/around their own home.
If, for some reason, the compostable material contains toxins (heavy metals for example), burning them could release those into the air, composting them could end up with with them in human and wildlife food chain. In this case, it seems like a properly designed and maintained land fill would be a better place in the short term (decades or centuries).
And in this case, I would argue that it's not a backup until there are two backup copies, one preferably off-site. This is really more of an archival operation - the primary is about to be destroyed seemingly making the first backup the primary.
If the data on these machines wasn't already backed up as part of normal ops, one wonders why the data is suddenly so important now. Perhaps there's a good reason for this though (legal or some other PHB thing).
Excess capacity costs money. Money is borrowed directly or indirectly. Those who loan it expect a return on investment (if borrowed from a bank, they expect interest, if borrowed from shareholders indirectly, they want ROI).
Since "excess" capacity has negative ROI, a company would rarely choose to implement it intentionally. Usually excess capacity arises from bad planning.
But the lawyers are exploiting a legal system created by a government run by lawyers so it's hard to distance the two.
No, liability is independent of the ability to compensate victims (for the latter, insurance is sometimes a factor).
You know, golf and tennis are "white folk" sports also. It's unfortunate that the Williams sisters and Tiger Woods didn't know that -- they could have saved themselves from the agony of success.
I understand.
:(
The point I meant to make is that I've had fairly good luck with offshoring because the goal was not "saving money" - it was to expand the available highly skilled candidate pool. I.e., not expecting to pay less (although five or ten years ago, one could) and not lowering standards for offshore developers.
Also, I should have clarified, my comments were relevant only to India where there isn't a language barrier (or, that unfortunate cultural trait prevalent in some countries of nodding [figuratively over a phone call] in agreement while not agreeing with, or maybe even understanding, a word the other person is saying).
Good luck on that getting something on time -- sounds like you may want to schedule 80 weeks soon and/or find another job before the fecal matter hits the rotating air circulation device
+1
If the main criteria for hiring is "cheap" and/or the goal is "offload work no one wants to do" and/or you treat the offshore developers as "out of sight, out of mind" and/or as "second class citizens", you may not do so well offshore. However, if you hire to high standards, pay well, and give the offshore teams interesting work, it can be a great source of talent. Obviously remote development shifted 12 hours brings its own challenges and opportunities and that needs to be factored in.
In recent years, as India's own software industry expands, it appears that more great developers in India are choosing to stay home rather than pursue the painful US immigration process. The unmistakable gradual, yet likely irreversible IMHO, decline of the US (both in relative and absolute terms) probably contributes to this as well. This of course means there are more good offshore developers and less in the US and the offshore developers are costing more.
(For example, on the "cost more" issue, I know of one large company with substantial development operations worldwide whose recent US raise pool was 3% while the raise pool for India was substantially over 10%.)
(And, to the AC who is going to ask if I'm in middle management or related to one of the CxOs - Nope, I'm a developer/sometimes first level manager.)
I've heard that claim before by a zealot who was defending not doing design with the absurd justification that went something like "customers don't buy designs so they don't add customer value". Well, guess what, customers don't buy C++ code either so all that time specifying the algorithm in C++ is, like design, non-CVA.
Even if one wants to count time spent writing C++ code as CVA, it seems clear that most time spent thinking between typing lines of code is indistinguishable from design (since, that's the activity the brain is doing that time if one is competent in the language and tools) so needs to be counted as non-CVA.
Pedantic agile zealots are among the most annoying people in the world.
If you can't trust your first level managers to understand who is contributing w/o a pile of metrics, there is a simple solution -- get new managers.
ICs will game metrics much more than managers. Good managers rarely have a vested interest in favoring one developer over another except to the extent that one developer contributes more than another to getting reliable systems meeting requirements to the customer.
If you have metrics that "managers can't game", it means that ICs can game them because they must be very objective (i.e., your review is 2.954 because your $METRIC1 was 68, your $METRIC2 was 93, your $METRIC3 was 17).
Once you give anyone a list of metrics they will be measured by for raises, bonuses, and promotions, they will optimize for "good metrics" rather than actually keeping the customer happy. As well, since such metrics must include quite a few "quality" measures, this easily result in in-fighting within the team. Alan will say "No, this bug isn't attributable to me, it's attributable to Jim because the documentation on his method doesn't make it clear enough that division by zero is undefined". Whoever wins this battle (after arbitration is complete and the appropriate developer's $METRIC_QUAL has been decremented) will find it harder to work with the other developer in the future.