Ethics and the lowly TSP investor

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Oyak
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Joined: Fri Nov 04, 2016 1:52 pm

Ethics and the lowly TSP investor

Post by Oyak »

It's funny...I abhor what the GOP tax plan will do to our country in the long term, yet I am betting that it will improve the C and S funds in the short term. Would the ethical thing be to avoid investing in the market entirely so as not to benefit from a tax plan that is itself unethical?

nrialto
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Re: Ethics and the lowly TSP investor

Post by nrialto »

I will not now, nor have I previously stated any partisan opinions on this site. I do, however, feel that facts, not feelings are the best way to get your answer.

Respectfully, Oyak, I imagine that your question of ethics is based on the narrative of late that the tax plan will add $1 trillion to our national debt. This is certainty debatable, though likely unrelated to investing in the TSP. I would like to point out, though, that a declination to invest in the C and/or S fund is a declination to invest in the companies based in America.

I’m not generally one to post links, but a pragmatic reader would do well to take this article into perspective.

https://www.washingtonpost.com/news/fac ... 3717a82692

John316
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Re: Ethics and the lowly TSP investor

Post by John316 »

Very good subject to bring up. It is nice to see my TSP and other investments reach higher and higher levels. It is quite another thing to see the wealth inequality reach new levels also. In a perfect world all peoples would benefit from the global expansion but we all know we do not live in a perfect world. I am torn as I watch my investments soar and then remember that children die in this imperfect world every day for lack of basic necessities, like clean water and basic medicines. I know there are many who feel the same but do not have the answers. My family and I try to give back as much as we can and help those in need as we prosper. If the tables were turned and other people groups were as blessed as we have been, I would hope they would not turn a blind eye toward us and our children. We are all made in God's image, from our wealthy to the poor African child starving for a bite to eat. We cannot and must not ever forget what Jesus said "to whom much is given, much will be required."

My prayer for everyone is they have a safe and wonderful Christmas season. Wealth is not the enemy, the love of money is the root of all kinds of evil. In all our getting, let's get something money cannot buy - compassion for our fellow human beings. Love this website and all those who participate here.

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mjedlin66
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Re: Ethics and the lowly TSP investor

Post by mjedlin66 »

This is indeed a very interesting debate.

Consider, for example, that while free trade has been disasterous for our domestic manufacturing sector, it has enabled people in China and Mexico to rise up out of poverty.

I was in China recently and took their high speed rail from Shanghai to Nanjing. I saw very peculiar things while shooting along at 180mph on the ground.

I saw old communities in the middle of rural china surrounded by fields. Right beside them, still in rural china, there would be anywhere from 10-50 high rise towers. There was no other commerical or medium density development. Just a leap from old houses to new high rises- and LOTS of them, in the middle of nowhere, several miles from the nearest rail station.

I saw tower cranes everywhere I went. I was only in China for 3 days and I only visited two cities. But I must have seen 400 tower cranes. Construction everywhere all at once.

The wedding that I went to was easily the most expensive wedding I have ever been to. I met the groom in college. I always knew that my foreign student friends came from rich families, because to send a student to study in America is extremely expensive. I had the luxury of meeting his parents. I do not know what their business is exactly, but they told me they do business in New York regularly.
Owner/creator of TSPcalc.com - "Know your numbers"

Texamr
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Re: Ethics and the lowly TSP investor

Post by Texamr »

It’s probably unethical, and we should all stay in the G fund. And since it’s currently open season we should all cancel our Federal healthcare plans, since not every one else gets to have them, and sign up for the ACA.

crondanet5
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Re: Ethics and the lowly TSP investor

Post by crondanet5 »

Where is the ethic issue in this post?

phalanx
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Re: Ethics and the lowly TSP investor

Post by phalanx »

There’s only been one political movement in our country’s history who had a key stated platform of reducing government spending and national debt.....tea party, which clearly the Op’er should join.
Other studies also show that raising and lowering taxes generally has a revenue neutral effect. Both parties spend like drunken sailors, just on different things. Spending is the problem, for both. I would have to presume that the OP’er greatly opposed the massive spending and national debt doubling the previous administration did?
You could also look at it in a way that the more money you make through TSP and etc, the more you can give to charities around the world.

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mjedlin66
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Re: Ethics and the lowly TSP investor

Post by mjedlin66 »

I would like to read these studies that changing the tax rate has a revenue neutral effect.
Owner/creator of TSPcalc.com - "Know your numbers"

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dougellen1
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Re: Ethics and the lowly TSP investor

Post by dougellen1 »

We are a capitalist country. Capitalism has made us the most successful country in the history of the human race. Turn your back on capitalism and we become like every other oppressive big government country. Invest and donate your money how you desire. It's called freedom.

Greenangle
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Re: Ethics and the lowly TSP investor

Post by Greenangle »

As of this writing, the Tax Plan is not yet a Law. According to the GOP it is meant to help the middle class and boost the economy with a lower corporate tax. Ethically speaking, it seems the GOP's intent is not to run this country into the ground, but to stimulate the economy and help the US in the long run. It is yet to be seen if the Tax Plan fails or succeeds. The beauty of this nation, as Dougellen1 said, is that we are free to invest or not, however we choose. That decision is up to you.

The Tax Plan in its current form may indeed help many people (myself with 5 dependents included!), so I wouldn't consider it unethical, because it is helping people. The nice thing about this nation is that we do have a voice, and we can vote for our president, senators, representatives, etc. They are our voice and our avenue to fight against bills we consider unethical. Right now it seems Tax Reform is the current direction we are headed in, fight with your vote, and follow any convictions you have (to invest or not), that's the beauty of freedom!

God Bless,
Greenangle.

rikarus
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Re: Ethics and the lowly TSP investor

Post by rikarus »

I am just the little guy, I vote and that is about the extent of my power on this stuff. If I can profit on this change you bet your ass I am going too, the bigger my TSP the less i gotta worry about what they are going to do with my retirement annuity.

skiehawk11
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Re: Ethics and the lowly TSP investor

Post by skiehawk11 »

The tax plan will benefit me as well, but what I am concerned about is the national debt. This tax plan is going to add a shade under 1.5 trillion dollars over the next 10 years to the deficit. How does this impact market especially when the GOP shut down the government a few years ago over the deficit? It makes no logical sense to me when someone/entity preaches something for 8 years and when it's their turn to govern, they do the exact opposite of what they stood for.

And to clarify, I don't mind a deficit, but it needs to be sustainable and done with purpose. I would rather have kept the tax code intact and just have the government increase the deficit by increasing infrastructure, or spending passed to increase research and make it more affordable for students to go to college.

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Aitrus
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Re: Ethics and the lowly TSP investor

Post by Aitrus »

phalanx wrote:There’s only been one political movement in our country’s history who had a key stated platform of reducing government spending and national debt.....tea party, which clearly the Op’er should join.
Or the Libertarian Party. They've been advocating for a much smaller government and less spending since the 70's.

As for the thread as a whole...

Everybody talks about the deficit, but what about our debt? Or do people not understand that they are two separate things?

Deficit: The difference between what you spend and what you bring in. If you spend $14,000 this quarter but get paid only $10,000, then the deficit is $4,000. You have to borrow $4 and pay interest in it, and the $4 gets added to your total debt. Reducing the deficit does nothing to eliminate debt, it simply slows the rate at which you go deeper into debt.

Debt: The amount of money you owe to somebody else. If you make $10,000 and owe $138,000 to somebody else, then add $4,000 worth of credit card charges to the pile, then you are adding to the debt. Also, if you're that deep in debt, you have no business spending beyond your means like that. And having a big fight to reduce your spending by a measly figure like $345 a year is insane.

Debt Limit: The limit of debt you are allowed to have at any one time. If you have $138,000 in debt, and your ceiling is $138,000, then you need to raise your debt ceiling to take in this year's additional $4,000 of debt spending over your $10,000 worth of income.

Here's an interesting take, circa 2011 and before the ACA, but still applicable today: https://www.youtube.com/watch?v=Li0no7O9zmE

Another sign that we have a problem: Woodrow Wilson borrowed $30 billion to pay for our involvement in WWI. We still haven't paid that debt off, and have paid $15 billion in interest so far. We don't have a revenue problem, we have a spending problem. Our country shouldn't be in debt, it should have a surplus for hard times.

The GOP tax plan has been said to add $1 trillion - $1.4 trillion, depending on which report you read. But those reports are static - they don't allow for any growth in the economy. A 4% growth in the economy would bring in $3 trillion of extra revenue over the next 10 years. The economy grew 3.1% in the second quarter of 2017, and 3.3% in the third. In essence, the tax cut is already paid for. But more growth is always a bonus.

To get that growth, you need to encourage businesses to expand, and allow other businesses to get started. You do this by taxing less and regulating less. The more regulations and taxes applied to a business, the less capital that business has available for expansion, giving raises, and hiring new workers.

Raising taxes on the rich doesn't work - it won't solve the money problems we have.

Take WalMart, for example. There are roughly 2 million employees that work at WalMart. The CEO got a 20 million dollar bonus last year. What would happen if you took away that bonus and distributed it evenly to all of the employees? Everybody would get a $10 check, and the CEO would probably quit because the incentive to do a good job isn't there anymore. Without a good CEO, the company would start making bad business decisions, would lose money, have to downsize, and lots of people would get laid off (or the company would go bankrupt and close for good).

Taxing the rich has never, ever worked. So why continue to do it? It's unethical to punish success. Progressive taxation is the 2nd Platform of the Communist Manifesto.

Every tax cut in our nation's history has resulted in a boom in the economy during the years after the tax cut was put in place. Some presidents / congresses squandered the additional revenue that came in, but that's a separate issue.

For those that are for raising taxes, I have a proposal: would you support a $3 reduction in spending for every $1 in taxes raised?
Last edited by Aitrus on Mon Dec 04, 2017 3:55 pm, edited 1 time in total.
Reason: After research, updated economic growth figures.
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sunny
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Re: Ethics and the lowly TSP investor

Post by sunny »

Well Oyak I guess you could feel better and stay in the G fund!

Oyak
Posts: 16
Joined: Fri Nov 04, 2016 1:52 pm

Re: Ethics and the lowly TSP investor

Post by Oyak »

sunny wrote:Well Oyak I guess you could feel better and stay in the G fund!
LOL that is really the most clear-cut answer.

I guess when you think about it, the market is subject to 1000s of factors that we have only a vague idea about, and as other posters noted, who can say what the effects of this tax plan are. And as also noted, these are essentially index funds that we invest in, not particular companies. So what the heck, why not.

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Fund Prices2024-03-28

FundPriceDayYTD
G $18.15 0.05% 1.05%
F $19.08 -0.06% -0.74%
C $82.21 0.11% 10.55%
S $82.43 0.30% 6.92%
I $42.57 -0.24% 5.95%
L2065 $16.38 0.02% 8.37%
L2060 $16.39 0.02% 8.38%
L2055 $16.39 0.02% 8.38%
L2050 $32.73 0.01% 6.95%
L2045 $14.91 0.02% 6.58%
L2040 $54.38 0.02% 6.22%
L2035 $14.34 0.02% 5.79%
L2030 $47.67 0.02% 5.38%
L2025 $13.15 0.03% 3.43%
Linc $25.61 0.03% 2.82%

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