American Retirees Set to Take a Blow to Investment Accounts - Oct 17, 2024

Retirement age Americans are set to take a hit from the new law passed by Congress. [AmericanFinanceInsider.com](   Retirement age Americans are set to take a hit from the [new law passed by Congress.]( The Wall Street Journal reported, “…Congress can’t wait to get its hands on America’s retirement-account assets.” [congress shocked]( In economics, economic value is a measure of the benefit provided by a good or service to an economic agent, and value for money represents an assessment of whether financial or other resources are being used effectively in order to secure such benefit. Economic value is generally measured through units of currency, and the interpretation is therefore "what is the maximum amount of money a person is willing and able to pay for a good or service?” Value for money is often expressed in comparative terms, such as "better", or "best value for money",[1] but may also be expressed in absolute terms, such as where a deal does, or does not, offer value for money.[2] Among the competing schools of economic theory there are differing theories of value. Economic value is not the same as market price, nor is economic value the same thing as market value. If a consumer is willing to buy a good, it implies that the customer places a higher value on the good than the market price. The difference between the value to the consumer and the market price is called "consumer surplus".[3] It is easy to see situations where the actual value is considerably larger than the market price: purchase of drinking water is one example. Overview The economic value of a good or service has puzzled economists since the beginning of the discipline. First, economists tried to estimate the value of a good to an individual alone, and extend that definition to goods that can be exchanged. From this analysis came the concepts value in use and value in exchange. Value is linked to price through the mechanism of exchange. When an economist observes an exchange, two important value functions are revealed: those of the buyer and seller. Just as the buyer reveals what he is willing to pay for a certain amount of a good, so too does the seller reveal what it costs him to give up the good. Additional information about market value is obtained by the rate at which transactions occur, telling observers the extent to which the purchase of the good has value over time. Said another way, value is how much a desired object or condition is worth relative to other objects or conditions. Economic values are expressed as "how much" of one desirable condition or commodity will, or would be given up in exchange for some other desired condition or commodity. Among the competing schools of economic theory there are differing metrics for value assessment and the metrics are the subject of a theory of value. Value theories are a large part of the differences and disagreements between the various schools of economic theory. Explanations In neoclassical economics, the value of an object or service is often seen as nothing but the price it would bring in an open and competitive market.[citation needed] This is determined primarily by the demand for the object relative to supply in a perfectly competitive market. Many neoclassical economic theories equate the value of a commodity with its price, whether the market is competitive or not. As such, everything is seen as a commodity and if there is no market to set a price then there is no economic value. In classical economics, the value of an object or condition is the amount of discomfort/labor saved through the consumption or use of an object or condition (Labor Theory of Value). Though exchange value is recognized, economic value is not, in theory, dependent on the existence of a market and price and value are not seen as equal. This is complicated, however, by the efforts of classical economists to connect price and labor value. Karl Marx, for one, saw exchange value as the "form of appearance" (This interpretation of Marx is along the lines of the Marxist thinker Michael Heinrich) [Erscheinungsform] of value, in his critique of political economy which implies that, although value is separate from exchange value, it is meaningless without the act of exchange. In this tradition, Steve Keen makes the claim that "value" refers to "the innate worth of a commodity, which determines the normal ('equilibrium') ratio at which two commodities exchange."[4] To Keen and the tradition of David Ricardo, this corresponds to the classical concept of long-run cost-determined prices, what Adam Smith called "natural prices" and Marx called "prices of production". It is part of a cost-of-production theory of value and price. Ricardo, but not Keen, used a "labor theory of price" in which a commodity's "innate worth" was the amount of labor needed to produce it. "The value of a thing in any given time and place", according to Henry George, "is the largest amount of exertion that anyone will render in exchange for it. But as men always seek to gratify their desires with the least exertion this is the lowest amount for which a similar thing can otherwise be obtained."[5] In another classical tradition, Marx distinguished between the "value in use" (use-value, what a commodity provides to its buyer), labor cost which he calls "value" (the socially-necessary labour time it embodies), and "exchange value" (how much labor-time the sale of the commodity can claim, Smith's "labor commanded" value). By most interpretations of his labor theory of value, Marx, like Ricardo, developed a "labor theory of price" where the point of analyzing value was to allow the calculation of relative prices. Others see values as part of his sociopolitical interpretation and critique of capitalism and other societies, and deny that it was intended to serve as a category of economics. According to a third interpretation, Marx aimed for a theory of the dynamics of price formation but did not complete it. In 1860, John Ruskin published a critique of the economic concept of value from a moral point of view. He entitled the volume Unto This Last, and his central point was this: "It is impossible to conclude, of any given mass of acquired wealth, merely by the fact of its existence, whether it signifies good or evil to the nation in the midst of which it exists. Its real value depends on the moral sign attached to it, just as strictly as that of a mathematical quantity depends on the algebraic sign attached to it. Any given accumulation of commercial wealth may be indicative, on the one hand, of faithful industries, progressive energies, and productive ingenuities: or, on the other, it may be indicative of mortal luxury, merciless tyranny, ruinous chicanery." Gandhi was greatly inspired by Ruskin's book and published a paraphrase of it in 1908.[non sequitur] Economists such as Ludwig von Mises asserted that "value" is a subjective judgment. Prices can only be determined by taking these subjective judgments into account, and that this is done through the price mechanism in the market. Thus, it was false to say that the economic value of a good was equal to what it cost to produce or to its current replacement cost. Silvio Gesell denied value theory in economics. He thought that value theory is useless and prevents economics from becoming science and that a currency administration guided by value theory is doomed to sterility and inactivity.[6] Connected concepts The theory of value is closely related to that of allocative efficiency, the quality by which firms produce those goods and services most valued by society. The market value of a machine part, for example, will depend upon a variety of objective facts involving its efficiency versus the efficiency of other types of part or other types of machine to make the kind of products that consumers will value in turn. In such a case, market value has both objective and subjective components. Economy, efficiency and effectiveness, often referred to as the "Three Es", may be used as complementary factors contributing to an assessment of the value for money provided by a purchase, project or activity. The UK National Audit Office uses the following summaries to explain the meaning of each term: Economy: minimising the cost of resources used or required (inputs) – spending less; Efficiency: the relationship between the output from goods or services and the resources to produce them – spending well; and Effectiveness: the relationship between the intended and actual results of public spending (outcomes) – spending wisely.[7] Sometimes a fourth 'E', equity, is also added.[7][8] In philosophy, economic value is a subcategory of a more general philosophical value, as defined in goodness and value theory or in the science of value. Value or price Theories Adam Smith agreed with certain aspects of labor theory of value, but believed it did not fully explain price and profit. Instead, he proposed a cost-of-production theory of value (to later develop into exchange value theory) that explained value was determined by several different factors, including wages and rents. This theory of value, according to Smith, best explained the natural prices in the market. While an underdeveloped theory at the time, it did offer an alternative to another popular value theory of the time. The utility theory of value was the belief that price and value were solely based on how much "use" an individual received from a commodity. However, this theory is rejected in Smith's work The Wealth of Nations. The famous diamond–water paradox questions this by examining the use in comparison to price of these goods. Water, while necessary for life, is far less expensive than diamonds, which have basically no use. Which value theory holds true divides economic thinkers, and is the base for many socioeconomic and political beliefs.[9] Silvio Gesell denied value theory in economics. He thought that value theory is useless and prevents economics from becoming science and that a currency administration guided by value theory is doomed to sterility and inactivity.[10] Labor theory of value Main article: Labor theory of value See also: Cost-of-production theory of value In classical economics, the labor theory of value asserts that the economic value of a commodity is determined by the total amount of socially necessary labor required to produce it. When speaking in terms of a labor theory of value, value without any qualifying adjective theoretically refers to the amount of labor necessary for the production of a marketable commodity, including the labor necessary for the development of any capital used in the production process. Both David Ricardo and Karl Marx attempted to quantify and embody all labor components in order to develop a theory of the real, or natural, price of a commodity.[11] In either case, what is being addressed are general prices—i.e., prices in the aggregate, not a specific price of a particular good or service in a given circumstance. Theories in either class allow for deviations when a particular price is struck in a real-world market transaction, or when a price is set in some price fixing regime. Monetary theory of value See also: Value-form Critics of traditional Marxian economics, especially those associated with the Neue Marx-Lektüre (New Readings of Marx) such as Michael Heinrich, emphasize a monetary theory of value, where "Money is the necessary form of appearance of value (and of capital) in the sense that prices constitute the only form of appearance of the value of commodities."[12] Similarly to the exchange theory, this theory emphasizes value as being socially determined, rather than having a physical substance. According to this analysis, when money incorporates production into its M-C-M' circulation, it functions as capital implementing the capitalist relation and the exploitation of labor power constitutes the actual presupposition for this incorporation.[13] Power theory of value Radical institutional economists Jonathan Nitzan and Shimshon Bichler (2009) argue that it was never possible to separate economics from politics.[14] This separation is required to allow for neoclassical economics to base their theory on utility value and for Marxists to base the labour theory of value on quantified abstract labour. Instead of a utility theory of value (like neoclassical economics) or a labour theory of value (as found in Marxian economics), Nitzan and Bichler propose a power theory of value. The structure of prices has little to do with the so-called "material" sphere of production and consumption. The quantification of power in prices is not the consequence of external laws—whether natural or historical—but entirely internal to society. In capitalism, power is the governing principle as rooted in the centrality of private ownership. Private ownership is wholly and only an act of institutionalized exclusion, and institutionalized exclusion is a matter of organized power.[15][16] And since the power behind private ownership is denominated in prices, Nitzan and Bichler argue, there is a need for a power theory of value. There is, however, a causality dilemma to their argument that has drawn criticism: power is based on the ability of firms to set monopoly prices yet the ability to set prices is based on firms possessing a degree of power in the market. Capitalization, in their theory, is a measure of power, as illuminated through the present discounted value of future earnings (while also taking into account hype and risk). This formula is basic to finance which is the overarching logic of capitalism. The logic is also inherently differential as every capitalist strives to accumulate greater earnings than their competitors (but not profit maximization). Nitzan and Bichler label this process differential accumulation. In order to have a power theory of value there needs to be differential accumulation where some owners' rate of growth of capitalization is faster than the average pace of capitalization. Subjective theory of value and marginalism Main articles: Subjective theory of value and Marginalism The subjective theory of value emphasizes the role of consumer preferences[17] in influencing price. According to this theory, the consumer places a value on a commodity by determining the marginal utility, or additional satisfaction of one additional unit.[18][19] Marginalism employs concepts such as marginal utility, marginal rate of substitution, and opportunity costs[20] to explain consumer preferences and price. Subjectivist or marginalist theories of value were created by William Stanley Jevons, Léon Walras, and Carl Menger in the late 19th century.[21] These theories contradicted earlier labour theories of values proposed by classical economists which emphasize the role of socially necessary labour in producing value.[22] The subjective theory of value helped answer the "diamond–water paradox," which many believed to be unsolvable. The diamond–water paradox questions why diamonds are so much more valuable than water when water is necessary for life. This paradox was answered by the subjective theory of value by realizing that water, in total, is more valuable than diamonds because the first few units are necessary for life. The key difference between water and diamonds is that water is more plentiful and diamonds are rare. Because of the availability, one additional unit of diamonds exceeds the value of one additional unit of water.[22] The subjective theory emphasizes the role of supply and demand in determining price. You simply cannot risk your life savings by not acting. What the government plans to do is strip the value of your IRA or 401(k) before you can pass it along to your family. Both Democrats & Republicans voted overwhelmingly to pass this [new retirement killer law.]( A [brand-new guide]( lists steps that can help you lessen the impact on your retirement accounts. There are 7 key moves you can make to protect yourself and your family. [Get the details here]( Money and value Simmel believed people created value by making objects, then separating themselves from those objects and then trying to overcome that distance. He found that objects that were too close were not considered valuable and objects that were too far away for people to obtain were also not considered valuable. What was also considered in determining value was the scarcity, time, sacrifice, and difficulties involved in getting objects. In the pre-modern era, beginning with bartering, different systems of exchange for goods and services allowed for the existence of incomparable systems of value (land, food, honor, love, etc.). With the advent of a universal currency as an intermediary, these systems became reconcilable, as everything tended to become expressible in a single quantifiable metric: its monetary cost. Money and freedom A fundamental point of The Philosophy of Money is that money brings about personal freedom. The effect of freedom can be appreciated by considering the evolution of economic obligations. When someone is a slave, their whole person is subject to the master. The peasant has more freedom, but if they are to provide the lord with payments in kind, such as wheat or cattle, they must produce exactly the item required, or barter it at a great loss or inconvenience. But when the obligation takes a monetary form, the peasant is free as to whether to grow wheat, or keep cattle, or engage in other activities, as long as they pay the required tax. Freedom also arises because money enables an economic system of increasing complexity in which any single relation becomes less important and thus more impersonal. As a result, the individual experiences a sense of independence and self-sufficiency. There is another sense in which money is conducive to freedom, and it originates from the observation that the owner is truly entitled to its possessions only if he takes care of its upkeep and of making it bear fruits. Money is more flexible than land or other assets, and thus it frees the owner from those activities that are specific to real entities. Since monetary possessions no longer ties the owner to a specific type of work, money leads to increased freedom. Consequently, monetary ownership enables the position of a purely intellectual worker and, by the same line of reasoning, it also implies that a wealthy man can lead a modest life. As for workers and managers, they only contribute work for wages and only deal with an impersonal market, and thus their personality is separated from specific work activities. In the case of civil servants, they are paid a fixed salary that is largely independent of any specific work performance, and see their personality freed from work activities. The same hold for artists, such as a musician who is paid the same fee regardless of how well he plays. Although the monetary system enhances individual freedom, it can also lead to consequences that are questionable. An employee does not necessarily have better living conditions than a slave does, as a precise amount of money corresponds imprecisely to its effective purchasing power. In a money economy, individuals will tend to put their financial interests above the goals of society or of the state. If a peasant sells his land even for a fair price, monetary freedom differs from the personal activity afforded by possession of the land. More generally, freedom from something does not necessarily equate with the freedom to do something else because money is "empty" and flexible, and does not direct the owner toward any specific activity. Although monetary payments can free from the obligations of specific in-kind contributions, it has also the effect of removing the involvement of the individual from a broader context. For example, when the Athenian vassal states had to contribute with ships and troops, the tributaries were directly involved in Athens's foreign and military policy, at least to the extent that drafted soldiers could not effectively be deployed against their home states. Once the military contribution was replaced by a monetary tribute, no such constraint could be placed on Athens's policy. The natural evolution of this state of affairs is that despotic regimes tend to favor a monetary economy. Personal values Personal values can be quantified in terms of equivalent money amounts. An example is the weregild, the monetary value that must be paid to a family if one of his members is killed. The weregild was truly a reflection of personal values, in this case of a lost life, rather than the compensation for the income stream that the deceased would have provided to the family. Similarly, personal values are also quantified by the practice of marriage by purchase and of prostitution. However, the historical trend has been toward an increased awareness of individual distinctions whereas money is intrinsically fungible. As a result, money has been progressively considered as an inappropriate equivalent to personal values, and most of these practices have fallen into disuse. When these practices survive, the amount of money is so large that it introduces an affective element in the transaction. A wife purchased for an exorbitant amount is especially dear to the heart. Money is fungible and, as such, it stands in sharp contrast with the idea of distinction, according to which an entity is set apart from and incomparable with a majority. Distinction is a property of nobility, or of some works of art, for example. Simmel takes as a case in point the House of Lords, which functions as the sole judge of its members and at the same time refuses to sit in judgment of any other individual. In this sense, the Lords value distinction to the extent that even the exercise of authority on other people would be seen as a degradation. The quantitative aspects of money has the potential to threaten and debase the qualitative notion of distinction. Style of life As values can be quantified in monetary terms, our relationship with objects has lost most of its emotional character and has become more intellectual. On the one hand, our rational attitude can lead us to become individualistic, to an atomization of society, and even to disregard respect and kindness. On the other hand, there are often clear advantages in relying on intellect rather than on emotions. At any rate, Simmel maintains that intellect is a tool and, as such, it lacks an intrinsic sense of direction and can be put to use for different purposes. Rationality originates from the objective, purely arithmetic nature of money, and is mirrored by the tenet that law is equal for everyone and that in a democracy all votes are equal. The ability of fitting in an increasingly intellectual environment is reinforced by education, which in turn is mostly accessible to those who can afford it. As a result, money can lead to the creation of a de facto aristocracy of the affluent. The converse is that egalitarian tendencies typically reject the money system. The objective nature of money ultimately arises from the division of labor, in which the product is divorced from the worker's personality and work is treated as a commodity. Similarly, products are no longer tailored to the specific customer and do not reflect his personality, production tools are specialized to the point that the worker has little leeway in the way he operates the machines, and fashion changes so rapidly that nobody gets personally or socially attached to it. This state of affairs stands in contrast with the arts, which reflects the individuality of the author. Money can increase the distance between individuals to the point that it allows them to fit in crowded cities and to liberate individuals from the yoke of working on a family business. (Incidentally, financial activities are concentrated in major cities, and the concentration of money increases the pace and variety of life.) Humankind has become progressively more independent of the rhythms of nature and more dependent on the business cycle. "Objects and people have become separated from one another" declares Simmel, and was to compare this phenomenon with Marx's theory of alienation.[3] Money rises above individual conflicts while being an essential participant of the conflict. It has transcended its characteristics of a tool when it has become the center around which the economic system rotates, at which point it also takes the role of an all-encompassing teleological circle. Simmel was to compare this phenomenon with Marx's commodity fetishism.[3] Yet, division of labor makes it possible to construct intellectual and scientific contents that surpass the ability of the individual mind. Even in these cases, though, it may be essential that a synthesis be accomplished by a single mind. Similarly, as material concerns become impersonal, what is left can become more personal. For example, as the typewriter has relieved the writer from the cumbersome mechanics of writing, he can devote more attention to the original contents of his work. It really depends on humankind whether money will lead to increased distinctiveness and refinement or not. Social effects of money Simmel's outlook, while gloomy, is not wholly negative. As money and transactions increase, the independence of an individual decreases as he is drawn into a holistic network of exchange governed by quantifiable monetary value. Paradoxically, this results in greater potential freedom of choice for the individual, as money can be deployed toward any possible goal, even if most people's sheer lack of money renders that potential quite low much of the time. Money's homogenizing nature encourages greater liberty and equality and melts away forms of feudalism and patronage, even as it minimizes exceptional, incommensurable achievements in art and love.   [Simon] Simon Williams - Finance Insider Periodically, we uncover opportunities that we trust will hold value for readers like yourself. We strongly encourage you to consider examining the preceding message from one of our partners, as we believe it could prove to be worthwhile. [Signature]   You are receiving this editorial email containing advertisements because you subscribed to this service using the email address provided {EMAIL}. At Stark Media LLC, we value your feedback and inquiries. However, please understand that legal constraints prevent us from offering personalized advice. This email has been sent to you by a third party on behalf of Eagle Financial Publications. You are receiving this email because you have previously opted in to receive communications from them. 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