Merriam Webster defines "Ponzi Scheme" as the following.... So let us take a look at the early investors..... So Ida paid in $24.75....and received $22,888.92.....which would equate the greatest ROI in world history, or a Ponzi scheme. You be the judge....... . . . .
Of course it's a Ponzi scheme. The only defense I've heard that it's NOT a Ponzi scheme is that it's legal.
Social security does not encourage risks at all. It's also sustainable and is unlikely to crash (the cuts, hikes, and such will be worse the longer we wait to fix it, but it will not be allowed to fail). The only way it can be a Ponzi scheme is if government consciously decides not to keep it going or if people suddenly stop reproducing (in which case we have other problems). If social security is a Ponzi scheme then ALL insurance is a Ponzi scheme... and most private insurance is worse. Furthermore private pensions are the truest definition of a Ponzi scheme since they actually often do go unpaid when a company claims bankruptcy. Some people get paid less than they put in, some people more. A lot of times it's based on how long you live. In other words, it's an INSURANCE PLAN. And because it's mandatory, it actually has a well distributed risk pool.
The ever growing $14,000,000,000,000.00 hole known as Social Security is plenty of risk......Americans are encouraged to buy into the ponzi scheme....or government sends men with guns to their door and ensure they invest. You call a growing 14 trillion dollar hole sustainable? Social Security was bankrupt at inception. If it was sustainable at any time.....there wouldnt be a constant need to reform or change the Ponzi scheme. Except your insurance agent doesnt show up at your house with a gun if you dont buy into his ponzi scheme.... . . .
And if the government collapses then we have a problem. But of course if the government collapses we have bigger problems. Ponzi schemes are designed to eventually fall apart, and the people creating them get out without any problems. Social Security is designed to be upheld, and if the entity responsible for it fails, anyone still alive-- whether they collected or not-- is screwed. Every level-headed person realizes it's sustainable. It can be slightly changed (without structural changes) and continue to fulfill what it is supposed to fulfill. It is an insurance program, not an investment program (anybody who purposely doesn't save because he/she thinks living on social security will be fun is in for a nasty surprise regardless of how the program is changed). Only sensationalists and radicals think that social security is going to collapse without radical changes. Of course if these people get into power, they'll see to it that happens. Medicare is another issue completely as nothing short of reducing healthcare inflation will sustain it. But social security is not going belly-up unless we decide to make it go belly-up. This is a strangely high bar for policy. You expect any policy to stand forever without changes? I dn't imagine an insurance company could manage that. People with Ponzi schemes don't put a gun to my head either. And actually I am forced to buy insurance. I live in MI where auto insurance is mandatory. This actually decreases the likelihood of the kind of collapses associated with Ponzi schemes. After all, when someone trashes my car, I know his/her insurance will cover it (assuming he/she obeys the law).
They arent designed to fall apart......its just the laws of inevitability. Kind of like how Ponzi Schemes need to be constantly changed? Insurance against what?........old age? ...as long as we keep sending men with guns to people's front doors to ensure their continued investment in the ponzi scheme. Try not buying into any of the many Democrat Ponzi schemes......from SSI to Medicaid to Medicare.....and see what happens. . . .
The problem is that social security started off paying people they KNEW would collect in the next year. It's a ponzi scheme by design. The people who enrollled first, benefited the most. The one who enrolled last are left holding the bag.
Social security will not inevitably fall apart. Once the boomer hump clears, it will actually be pretty smooth sailing. Like all policies need to be changed. Like all firms must change their prices and products. Anything designed to last for generations has to be designed for alteration. Old age and disability. You know, when you can't work anymore? It ensures you'll have some way to keep afloat even if you lost all your savings, were disabled at some early point, or worked a job that didn't pay enough to save for retirement. It's basically insurance for living past your able-bodied age. If you die before you get old, you don't get paid off. Similarly to how you never get a home insurance payoff if your house doesn't have a massive issue. Is that how they do it in your state? With me, they just deduct it from my paycheck. Libertarians are such drama queens these days. It seems to me your problem has absolutely NOTHING to do with the structure of social security. Your problem is you don't want to pay taxes for anything you see as helping others more than you. That's fine and dandy, but it has nothing to do with whether social security is a scam.
No one will be left holding the bag. At worse, some will get reduced benefits or pay higher taxes. But because it is an INSURANCE program rather than an investment program, this is okay, because it means they will still get guaranteed subsistence income if they live long past retirement. That's where the Ponzi thing is a fallacy. Ponzi schemes are about INVESTMENT. Social security isn't and never was.
Look ,whether you like Social Security or not is up to you. The only people I have found who don't like it are the young. I guess that is because they are stupid. Just ask your mom or dad or your grandparents, they will tell you. I can't believe how people cannot see the difference between S>S> and a ponzi scheme. This includes the fool Rick Perry. A Ponzi scheme is: You take someones investment( say $10,000) You tell them you will give them 10% interst on their investment. So, after 1 yr you owe them 1,000 in interest.Not a problem. You pay them out of the 10,000 they gave you. In the meantime the person tells 5 more people about how they are getting 10% on their money. They can't wait to get in. Now Ponzi has $60,000 and he has to pay 6,000 a year in interest. He can pocket 30,000 of the cash and continue to pay the interest to the 6 people for 5 more years. If one of the investors want to cash out ,he merely pays them off with the money from a new investor. This can go on until a bunch of investors try to cash out all at once and he would not have the money to pay them off. This is how it collapses. Now this is totally different than S.S. which is much more like a insurance policy. You are not giving them a big chunck of money and wanting the interest. You give them a small amount each week hoping to get a monthly payout at retirement. The whole premis is different, you don't have to like it but to call it a ponzi scheme just shows how ignorant you are. In the case of Ponzi, he is actually stealing your money, I guess you could say the gov't is borrowing the money it takes in, but until they default, everyone has gotten there payback and will continue to do so.
Good points... Granted, I would argue that it's become a Ponzi scheme due to the lack of a "lockbox" on its funding. If we actually put forth regulation to prevent the raiding of its funds, it would no longer be a Ponzi scheme.
I do think it's fair to compare it to a Ponzi scheme, but it isn't one. The heavy returns on the first wave weren't meant to get Ida to put 24,000 in hoping to get 100 times that back or anything. And there wasn't any schemer out there looking to suddenly grab the money and run. Granted the government used the money coming in to buy government bonds. But if they'd sunk it into the stock market and had the Chinese pick up our debt isntead it would have just been stupid. I'd say the situation is that the older generations voted themselves their decendents money between their medicare and social security benifits. We didn't get any say in the matter since we weren't around or old enough to vote, but now we get to work much of the year just so they can have a retirement they didn't have to save for. A retirement we won't get to enjoy. But that might be a little cynical. I'm not sure they delibereately voted themselves our money. Rather I think it might just be that they didn't do the math based on the idea of much longer lives with much higher medical bills. And I'd say that is the general flaw of social programs, especially when trying to get them by voters. It's oh so tempting to lowball what the real costs are going to be. Either by creative acounting, ignoring what future trends might be, or, my favorite, pretending people won't change their behaviour at all in order to put less into the system or to get more out of it.
Social Security will pay out 45 Billion more than what it takes in.....THIS YEAR! Its already falling apart.....because it was bankrupt and doomed to fail at inception. Unlike all policies but like all ponzi schemes....all the ensuing changes will equate less and less for the beneficiaries. Old age and disability are inevitable for everyone living beyond their sixties.....its not insurance. Well isnt that nice of them? ANd they let you have an allowance to boot..... I have a problem with all Government Mandated Ponzi Schemes..... . . .
I am about to receive my first S.S. checkm in about 3 months. I did not get the option of voting myself this retirement. I was in my 20s during the seventies. S.S. was put in long before that. But, I have been paying into it for the last 45 years. Every week for 45 years So, as you say I can get a retirement that I did not pay for. They have also taken out for Medicare for 45 years. Yes my money went to pay for people collecting while I was working. I have not complained about that because I thought the generation following me would be paying for me. Without whinning about it. That is the way it has worked for the last 75 years. It will be there for the next 75 years unless this new generation votes to abolish it so we can afford to spend all our money making War all around the world. Wake up, you are going to vote for the people who are saying they want to do away with it. Then you will cry when its not there for you. The Republicans have wanted to abolish S.S. ever sinse it was passed , they call it socialism and don't like it. So, if you would like to do away with it fine, vote Republican and you will get your wish. They make no secret of it. Listen to Rick Perry, read his book. The Democrats fought hard and long to get it and will do their best to keep it for you. The Republicans say we can't afford it. Bull, Don't let them take it, you will be sorry. AND it will be your own fault.
Of central importance to the existance of this debate is that idea that my generation already believes it will not be there for us. I've heard there was a poll, and belief in recieving social security among 20 somethings doesn't do much better than the belief that santa claus is real. That could be an urban myth. But it sounds about right. You've put money in, and maybe you'll wind up dying before you've expended that much. But your generation as a whole is expected to get back much much more than they put in. And that's just social security, medicare and other forms of government assistance go far beyond that.
Oh, that is HISTORICAL. No, seriously, though, how is $15 trillion of unfunded liabilities sustainable and unlikely to crash?
Well you know we all think that our generation is unique, different , special, well i got news for you ,you not. Time flies when your having fun, before you know it your going to get old. Its always the same. Over the years do you know how many times I heard people say , S.S. wont be there when I get ready to retire. Now I'm hearing people say" I never thought it would be there for me" Well it is. It will be there for you too unless you are dumb enough to vote to take it away. My generation was not dumb. Lets see what your generation does. I probably have more faith in you than you do. You'll be okay. Life can be frustrating at times but this old world just keeps on spinning. One day at a time but time passes faster the older you get, Just hang in there and enjoy life as much as you can while your young, you get old plenty fast. You know I kind of feel sorry for people growing up today, the 70s were a great time to be alive. there was a lot going on, or maybe it was that I waS YOUNG
social security is funded thru involuntary payroll deductions. as Obama has proved last week, payroll taxes are subject to being rolled back, changed, or increased. because the funding mechanism of social security is dependent on the whim of the whomever is in control is Washington, it is a type of Ponzi scheme. Thank you BH Obama for proving Rick Perry's point.
Well its the same people who cite the $78,000,000,000,000.00 hole known as Medicare as an example of how wonderful and efficient Government run health care is...... .......maybe $15,000,000,000,000.00 is sustainable in comparison. AA+ rated.... . . . .
That number is out there just to scare people. You could jusy as easily say it is unfunded for the next 100 years and use a number like 60 trillion in unfunded liabilities. Our military is an unfunded liability after the current year, so your numbers really mean nothing.
That....or maybe they just dont like Ponzi schemes. They told me how wonderful a 10,000% ROI was.....but today's ROI of 1-5% just isnt as alluring..... You got in early on the ponzi scheme so make sure you enjoy it....because your bankrupt grandchildren wont. And if investors werent allowed to cash out.....you have the Ponzi scheme known as social security. . . .
I know Rick Perry likes to call SS a Ponzi scheme, but that only shows how unvelievably dumb Rick Perry is. He's got stock broker-type friends who want to take your retirement cash and then sip pina coladas in the Caymans. Witness the last go 'round where soon-to-be retirees lost craploads that they'll never recoup. It wasn't that long ago.
Ahhhhhhhh, so you think all insurance programs are Ponzi schemes! The program is set up just like an insurance policy, you pays your premiums and you collect at the end. If the money, instead of being stolen by the congress, had been placed in holding for its recipients, at even a minimal rate of interest, there would be NO problem with Social Security. Instead, the Congress has used the monies collected for social security to give them self raises, to pay for unneeded wars, to collect garbage, to give to foreign dictators and on and on. Oh, by the way for something to be a swindle or Ponzi scheme it must have been intentionally set up as a con game. As you can see, neither Social security nor medicare has any of the characteristics of a Ponzi Scheme.
Truer words were never spoken...... Free Money is popular year round...24/7. "When the people find they can vote themselves money, that shall herald the end of the Republic." With the help of the Democrat Party....they found a way. I think the biggest flaw of social programs, Liberalism, and Statism all together......is they are all based on a complete fraud and utter lie. . . .
