IRAs, QRPs and MRDs, Oh My! What About ACPs, NGPs and MRPDs? Oh, YES!!! - Caught between a ROC and a hard-headed place.

   (Commentary posted by Roger Erickson)



When talking with most varieties of financial, legal, political and policy planners, one quickly becomes familiar with the following terms.

IRAs = individual retirement accounts
QRPs = qualified retirement plans
MRDs = minimum required distributions

IRA? QRP? MRD? First thing to note is that these are all "micro" or individual process terms. And note also that so much of our national policy process revolves around trying to organize our aggregate as a collection of independent parts.

Instead of as "a more perfect union?"

What about parallel macro mgt?

ACP? - aggregate continuation process?
NGP? - national growth plan?
MRPD? - minimum required policy evolution?

Please, remind me why we communally fought a war for aggregate independence ..... and wrote a US Constitution?

Are we all to act only as a collection of contentious, non-cooperating hermits, and do ALL planning accordingly? That requires only micro-cephalic* planning. Every man for himself.

Are we to eschew macro-cephalic** or aggregate planning and policy development? Are dancers, sportspeople & soldiers the only ones who know that there is no "I" in team? Really? Why do our voters and the policy staff THAT THEY SELECT no longer behave as though they know that simple fact?

We're caught between a ROC and a hard-headed place?

###

*  Cephalic disorders are congenital conditions that stem from damage to, or abnormal development of, the budding nervous system.

** Macro-cephalic disorders are cultural conditions that stem from damaged methods for shepherding the continual evolution of, our budding group-brain.

The Optimal Savings Plan Is To Build An Awesome Team.

   (Commentary posted by Roger Erickson)



Mathematician Gives Tips On How To Win $1 Billion On NCAA Basketball

Another data point in the endless stream of failures to see the full context for the local options. 

Why don't we do this for politics, and policy development? Why only during war, gambling, entertainment arts ... and crime? 

And not just to win election to a political office, but to formally attempt to predict and continually reassess and re-tune the aggregate utility of aggregate policies?

Historically, it's possible to recruit cooperation among thieves (e.g., wolves), when they all clearly sense that they can steal EVERYTHING from a weakened neighbor. Then, they enlist the awesome power of a dynamic asset - coordination - to harvest the visible static assets that they covet.

Not unexpectedly, seeing the return on coordination as ONLY the static returns, and NOT as the dynamic method itself .... is always the initial state.

It takes a much longer time to build up all the infrastructure, whether physiological or cultural, to permanently capture a bias to coordination as a desirable dynamic asset, BEFORE any available static assets are even targeted.

We in the USA need a distinctly different education and training approach, to retain and further instill appreciation for coordination itself as a more valuable asset, separable from any static assets that dynamic assets allow us to procure upon demand.

The required approach would trigger the transition from the analog of a snail-level-culture, to something analogous to a far more agile, army-ant-culture, investing in methods for hoarding coordination techniques (teamwork) rather than burdening itself with static assets (i.e., "savings"). If we focus more on generating dynamic options instead of burdening & slowing ourselves by hoarding static assets .... we could be far better off as an aggregate.

The optimal savings plan is to build a more awesome team, as a "more perfect union." One able to generate options, NOT slow itself carrying excessive static assets. Why bother with cruder & less productive forms of "saving" or hoarding? IRA = ARP (aggregate retarding process). Why are we always conflating current fiat and future options?

Riverdaughter — Ok, here’s my theory about why the Masters of the Universe want to kill the social insurance programs

BUT, if you raise the retirement age and keep a lot of older people working, they will be forced to put their money back into the market. Well, they won’t be able to retire until they’re much older than their parents were at retirement. If they have any hope of ever taking time out to go travel or garden, they’re going to have to risk their money in the market, hope that it will pay off so they can get out of the job market before they’re dead and forget about social security.

My theory is that raising the retirement age forces more savings to stay in the market longer and that with a pool of people who can’t retire yet still working, the amount of money going into 401Ks and IRAs is going to go up. Stripville!

The Confluence
Ok, here’s my theory about why the Masters of the Universe want to kill the social insurance programs
Kim

(h/t Naked Capitalism)

RyanoBachmannalia - Where Does it Leave Us?

Warren Mosler has some succinct observations about the politics of fiscal policy, which are worth re-posting as is. However, even after his comments, the same 2, perennial questions remain.  First, if it's long past time to start doing things differently, how do we take the 1st step on that 1000-mile journey?  We've been asking that question periodically, since Ben Franklin, Abe Lincoln & Marriner Eccles.  Isn't it past time to permanently capture known answers?  Second, how do we bite the bullet and take steps to permanently capture this as an obvious, incidental part of cultural knowledge base?  Yes, it's embarrassing, and a travesty.  What do we DO about it?

Ryan the next Bachman - (by Warren Mosler)

There's a reason the hardcore budget balancer/deficit hawks don't last long under the microscope. Their numbers can't add up, which leaves them with contradictory statements.

Why can't they add up?
[Because dollars are part of] a 'closed system,' what's called a case of 'inside money,' due to the fact that they all come from [government] and/or its designated agents (apart from counterfeits).

This means the [growing number of] dollars in our pension funds, ira's, corporate reserves, cash in circulation, foreign central bank reserves, etc. etc. all come from someone else spending more than his income.

Yes, the rest of the private sector can and does often spend a bit more than it's income to supply those 'saver's dollars,' but most of it comes from the $15 trillion or so the US govt. has spent [yearly] in excess of its tax collections.
That's called federal deficit spending.

[RGE:  Don't ask me why the REAL economy acquiesces in calling fiat currency creation a "deficit." Accounting semantics should converge to reality. The inverse doesn't seem realistic, or even temporarily useful.]

In fact, the US govt. "debt" is equal to the net dollar denominated 'savings' of all the other sectors combined.
To the penny.
It can't come from anywhere else [except currency creation].

That means any plan to balance the federal budget is also a plan that doesn't allow global dollar savings to grow. [That includes all] the 'automatic savings' like dollars going into and compounding in pension funds, ira's, corporate reserves, cash in circulation, and foreign central bank reserves, etc. etc. [All that savings] either can't happen or [they] are 'supplied' by equal private sector debt increases.

So a plan to reduce the "deficit" [by] $10 trillion from current forecasts is also a plan that either causes private sector debt to increase by that much and/or causes pensions, ira's, corporate reserves, cash in circulation, and foreign central bank reserves to decrease by that much.

None of which is consistent with a growing economy, to say the least.

This means, any plan for long term deficit reduction that includes relatively high rates of growth is what can be called a financial optical illusion, [one] that doesn't hold up on close examination.

And that's why all the budget balancers ultimately fail.
Yes, their headline rhetoric can be casually convincing and even win local elections. But under serious scrutiny, it all falls apart.

But maybe this time it's different.
:( 

[RGE: Don't hold your breath, Warren. The problem is not with currency operations. The key problem is mixing semantics across fields which insist on using different semantics without accurately defining their terms when interacting. That's a situational awareness task, not a monetary operations task. We're arguing over tactics & strategy using sloppy, disorganized terms, while not even defining what success means.  The result is tactics masquerading as national goals.]