Social Secuirty Is a Ponzi Scheme

Well, a government run Ponzi scheme, anyway.

Here is the dictionary meaning for a Ponzi:

A Ponzi scheme is a fraudulent investment operation where the operator, an individual or organization, pays returns to its investors from new capital paid to the operators by new investors, rather than from profit earned by the operator. Operators of Ponzi schemes usually entice new investors by offering higher returns than other investments, in the form of short-term returns that are either abnormally high or unusually consistent. The perpetuation of the high returns requires an ever-increasing flow of money from new investors to sustain the scheme.

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Now, while there isnt any profits tied to SS, it nevertheless has the same characteristics since the continued existence of the program requires that every working person in the country must donate a part of their earnings into it. So like a Ponzi, SS is insolvent since most of the Baby Boomers are getting to retirement age and so therefore even more money must be raised in order for them to maintain their lifestyle. The way its going right now, its highly unlikely that the millennial generation will ever get any returns from the amount of money they are putting into it, just like a Ponzi. The even worse thing about this is that the government forces everyone to participate into this massive fraud by the promise of a stable income after retirement.

Ida May Fuller, the first SS recipient retired and got her full SS pay after only 3 years of employment. She received monthly SS checks until she died in 1975 at age 100. By the time of her death, Fuller had collected $22,888.92 from Social Security monthly benefits, compared to her contributions of $24.75 to the system. Try doing that nowadays!

To make social security viable the system needs to stop spending peoples money on the whims of government and have it treated like a pension or individual account. Take a percentage out for disability insurance and pay the rest back as a retirement benefit and stop robbing peter to pay the dead beat Paul.

It is not a goddamn Ponzi Scheme, it's just something that an unexpected Aging Population has taken a toll on.

Back when it was implemented it made perfect economic sense, what no one factored in was how severely lifespans would grow and birth rates would plummet.

It's the first time in human history something like has occurred and it is bringing immense challenges to the civilized world... but the whacky extremist right wing idea that SS is a liberal plot to bankrupt the nation, or buy votes, or it was designed to fail is absolute nonsense.

Social Security made perfect economic sense at the time and is one of many factors that made American immensely successful and wealthy.

Individual families no longer had to cohabit and take care of older family members and so that freed up massive household income to be used to grow the economy.

PoS said:

Well, a government run Ponzi scheme, anyway.

Here is the dictionary meaning for a Ponzi:


Now, while there isnt any profits tied to SS, it nevertheless has the same characteristics since the continued existence of the program requires that every working person in the country must donate a part of their earnings into it. So like a Ponzi, SS is insolvent since most of the Baby Boomers are getting to retirement age and so therefore even more money must be raised in order for them to maintain their lifestyle. The way its going right now, its highly unlikely that the millennial generation will ever get any returns from the amount of money they are putting into it, just like a Ponzi. The even worse thing about this is that the government forces everyone to participate into this massive fraud by the promise of a stable income after retirement.

Ida May Fuller, the first SS recipient retired and got her full SS pay after only 3 years of employment. She received monthly SS checks until she died in 1975 at age 100. By the time of her death, Fuller had collected $22,888.92 from Social Security monthly benefits, compared to her contributions of $24.75 to the system. Try doing that nowadays!

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What is the socially acceptable alternative (remember in civilised society people can't starve in the streets)?

Jetboogieman said:

Back when it was implemented it made perfect economic sense, what no one factored in was how severely lifespans would grow and birth rates would plummet.

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Which is exactly how a Ponzi scheme runs, in the beginning everything is great when you start at the top of the pyramid scheme and you get everything you want but as it gets bigger it needs a wider base. All Ponzis turn out like this.

PoS said:

Which is exactly how a Ponzi scheme runs, in the beginning everything is great when you start at the top of the pyramid scheme and you get everything you want but as it gets bigger it needs a wider base. All Ponzis turn out like this.

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But Ponzi Schemes are intentional, SS was a sound economic decision that failed to predict the future of population demographics, hardly the same things.

Words actually means things buddy.

Sadly people starve on the streets and in poverty all of the time and in every nation including ours. Social Security is not the answer to that charity is the answer to that. The faster people realize you can't force the solution thru government but make it happen thru prosperity the better off we all will be.

I see nothing wrong with "forcing" a young person to have 15% of their pay set aside for them in older years with 20% of that taken for disability insurance. When they reach retirement age they will be quite well off. My father required I start an IRA at 16. I'm 48 today and can't wait to retire (again). My IRA is awesome thanks to that I just don't want to pay the penalty to tap it now.

Poverty, starving in the street, and helping the poor is best done with as little govt as possible.

Viv said:

What is the socially acceptable alternative (remember in civilised society people can't starve in the streets)?

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PoS said:

Well, a government run Ponzi scheme, anyway.

Here is the dictionary meaning for a Ponzi:


Now, while there isnt any profits tied to SS, it nevertheless has the same characteristics since the continued existence of the program requires that every working person in the country must donate a part of their earnings into it. So like a Ponzi, SS is insolvent since most of the Baby Boomers are getting to retirement age and so therefore even more money must be raised in order for them to maintain their lifestyle. The way its going right now, its highly unlikely that the millennial generation will ever get any returns from the amount of money they are putting into it, just like a Ponzi. The even worse thing about this is that the government forces everyone to participate into this massive fraud by the promise of a stable income after retirement.

Ida May Fuller, the first SS recipient retired and got her full SS pay after only 3 years of employment. She received monthly SS checks until she died in 1975 at age 100. By the time of her death, Fuller had collected $22,888.92 from Social Security monthly benefits, compared to her contributions of $24.75 to the system. Try doing that nowadays!

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And what is your goal in posting this?

Jetboogieman said:

Individual families no longer had to cohabit and take care of older family members and so that freed up massive household income to be used to grow the economy.

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In that sense all that happened is that it spread out the cost to other people by forcing everyone on the SS system and using the entire working population to pay for the benefits of the old.

Social security systems are not meant to be free market finacial investments.

You are applying categorisations and standards which do not apply since they belong elsewhere.

It`s like mesuring weight in meters.

Your failtrain has crashed.

Henrin said:

In that sense all that happened is that it spread out the cost to other people by forcing everyone on the SS system and using the entire working population to pay for the benefits of the old.

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does the principle of "united we stand, divided we fall" ring any bells.

Viv said:

What is the socially acceptable alternative (remember in civilised society people can't starve in the streets)?

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Perhaps a hybrid system? Convert people's social security "accounts" into 401Ks with a few investment options tailored to the needs of the over all system. Upon retirement, people are guaranteed a minimum monthly dividend on their investment (starvation prevention). Any dividends over the minimum amount are theirs to keep.

But... there is a graduated tax on dividends imapcting top earners. This tax then funds the "guaranteed minimum" type dividends. This will make some libertarians yell, but social darwinism does not create viable societies anymore than ponzi schemes do.

In the end, there are no easy answers. One thing for sure though- the current system will fail sooner than later, and probably sooner.

Jetboogieman said:

It is not a goddamn Ponzi Scheme, it's just something that an unexpected Aging Population has taken a toll on.

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Very true. The core concept, however, is that the system is failing and must be changed.

SS was a money making scheme for the federal government .

65 was the life expectancy in the time SS was created.

the idea, you pay into a system, retire at 62 collect it 3 years and die....the government keeps the rest.

Jetboogieman said:

But Ponzi Schemes are intentional, SS was a sound economic decision that failed to predict the future of population demographics, hardly the same things.

Words actually means things buddy.

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SS is also intentional, and designed on the same concept. We never had a significant ss trust fund until the 1980's, when we realized that the demographics weren't going to work out to support ss forever, so we increased the ss tax rate, and started to develop a trust fund. Eventually that trust fund will run dry, at which point it will be funded 100% ponzi scheme style, plus borrowing from the treasury.

Now I totally agree that it doesn't matter that it's a ponzi scheme, while that fact may be true, it's not neccesarally a bad thing. Historically every generation who was able to work took care of the generations who weren't able to work. By partially shifting this generational obligation to government, we virtually guaranteed that fewer people will fall between the cracks of the system. In the olden days, people had large families and desired lots of children, because they would depend on those childen in their old age, and the more they had, the more likely that one or more of the children would outsurvive them, and be able to provide for them. Now, we no longer have an economic need to over produce children, because we can rely on all of our society for old age support.

To stablize the system, all we have to do is either slightly increment that age of benefits, or to slightly increase the tax rate. The sooner we do it, the longer the existing trust fund will last, and thus the more modest changes can be made. If we wait until the trust fund is fully depleted, the ss tax would have to be increased by about 35% to create a system which would be self sustainable forever - of course that is the most likely scenerio, we wait until the last minute, but even then, we are only talking about a tax hike of about 4%, we have had larger tax hikes in the past.

Call it whatever you want. Shore it up, because it is a necessary and good program.

Unitedwestand13 said:

does the principle of "united we stand, divided we fall" ring any bells.

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That line of propaganda? Sure, I'm aware of it.

As Jetboogieman says, the original design was sound. But that was back in the agricultural age when large families were desirable to provide labor for the farm. With the move to industrial and then information age, and with the advent of the birth control pill in 1960, family size decreased so we temporarily (like for 40 years or so window of time) have fewer workers supporting a high-birthrate generation, the post war baby boom generation. That won't work well until the baby boomers die out (something I'm not looking forward to!). Medical advances have extended the average life expectancy by 8 years from the original design, which also puts pressure on the worker class, but that's not a SS problem. All of this adds up, the original design of SS is not the problem, it is the fact that the world has changed so much. If you wait 40 years, the baby boomers have all died out, and the system will rationalize itself. It didn't become unstable overnight, and it won't fix itself overnight. The system can be tweaked to look into the future better and anticipate change, but the original design was a great start.

CalGun said:

Sadly people starve on the streets and in poverty all of the time and in every nation including ours. Social Security is not the answer to that charity is the answer to that.

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Not so much in ours and you may find some others.:2razz:

Is that acceptable to you? Let me rephrase, is it acceptable to the general populace in US that people starve on the streets etc?

The faster people realize you can't force the solution thru government but make it happen thru prosperity the better off we all will be.

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The faster you realise drip down is fictional....

I see nothing wrong with "forcing" a young person to have 15% of their pay set aside for them in older years with 20% of that taken for disability insurance. When they reach retirement age they will be quite well off. My father required I start an IRA at 16. I'm 48 today and can't wait to retire (again). My IRA is awesome thanks to that I just don't want to pay the penalty to tap it now.

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"Forcing" one solution is wrong, but forcing young people into your version of social security is ok, because you like it... :shock:

How will you force an unemployed young person? Oh wait, you will just starve him in the street or something.:3oops:

The market has changed since you were a youngun, I don't know how your system worked or where your IRA was invested, but you might not reap the same returns in the current economic climate.

Poverty, starving in the street, and helping the poor is best done with as little govt as possible.

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If you are not poor or starving in the street.

In the old voluntary charity v taxes routine, you probably go with voluntary charity. It's swings and roundabouts, but at least with taxes the level of resource can be forecast to an extent and support workers can plan and budget resources. When the economy is booming, people may or may not donate to charities. How much do they voluntarily donate when the economy crashes?

Jetboogieman said:

But Ponzi Schemes are intentional, SS was a sound economic decision that failed to predict the future of population demographics, hardly the same things.

Words actually means things buddy.

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Yes they do...

The facts about Social Security are these. Yes, it’s a Ponzi scheme, thus criminally fraudulent (as I’ll explain), but even worse, because it coerces us to be a part of it. Since the scheme began in 1935 the full force of the U.S. government has compelled a growing portion of citizens to suffer by it, such that we all do so by now. A scheme of such widespread, compulsory fraud is unprecedented in U.S. history, and perhaps one of the most shameful (and popular) of FDR’s New Deal schemes.

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By the way, it’s irrelevant whether a Ponzi perpetrator sets out deliberately to inflict his scheme or instead only ends up with one after many years of evading his bad results and “cooking the books” to hide them. Either way, it’s still fraud.

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the fact remains that it (SS) has long since become an actual fraud. Today only fools or frauds dare deny it.

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At root Social Security is bust not because of demographics but because it’s a political Ponzi scheme.

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Social Security is Much Worse Than a Ponzi Scheme - and Here's How to End It - Forbes

Μολὼν λαβέ;1063088990 said:

Yes they do...

Social Security is Much Worse Than a Ponzi Scheme - and Here's How to End It - Forbes

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Realize that Steve Forbes who owns Forbes Magazine is a rich republican who ran for president a few years ago. The repubs don't even want to see SS go away, but its good campaign talk to TALK like you want it to go away, therefore its propaganda. Fact is most americans today are not saving enough to retire and in many cases SS is all they will have. The repub philosophy is so selfish that although many are rich, they don't want to give a dime to the poor. That motivates almost all of their positions on social programs. Without SS, how will the americans live, who don't have enough to retire? Do we want an ever greater homeless population, or maybe we can eventually send a cart around downtown in the morning to haul off the street people who died overnight. I think we're better than that. I paid plenty of taxes and maxed out FICA the last couple of decades, and I'm fine with it. It's not that I made a lot, but I didn't spend a lot, so I saved a lot, and that's how I could afford to retire before I worked myself to death. The taxes and SS I paid, I viewed like a charitable contribution to the society, like some view their church tithe.

You should change your lean from centrist to communist. That is what your criticism of how a capitalist solution would work. I said the answer is charity not letting people starve as acceptable - you wrote that - not me. Forcing one to save for themselves I don't see as a bad thing; those unwilling to work, unwilling to save, unwilling to contribute can ask for charity. I won't give it too them, and I am offended when my government does.

Viv said:

Not so much in ours and you may find some others.:2razz:

Is that acceptable to you? Let me rephrase, is it acceptable to the general populace in US that people starve on the streets etc?



The faster you realise drip down is fictional....



"Forcing" one solution is wrong, but forcing young people into your version of social security is ok, because you like it... :shock:

How will you force an unemployed young person? Oh wait, you will just starve him in the street or something.:3oops:

The market has changed since you were a youngun, I don't know how your system worked or where your IRA was invested, but you might not reap the same returns in the current economic climate.



If you are not poor or starving in the street.

In the old voluntary charity v taxes routine, you probably go with voluntary charity. It's swings and roundabouts, but at least with taxes the level of resource can be forecast to an extent and support workers can plan and budget resources. When the economy is booming, people may or may not donate to charities. How much do they voluntarily donate when the economy crashes?

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finebead said:

Realize that Steve Forbes who owns Forbes Magazine is a rich republican who ran for president a few years ago. The repubs don't even want to see SS go away, but its good campaign talk to TALK like you want it to go away, therefore its propaganda. Fact is most americans today are not saving enough to retire and in many cases SS is all they will have. The repub philosophy is so selfish that although many are rich, they don't want to give a dime to the poor. That motivates almost all of their positions on social programs. Without SS, how will the americans live, who don't have enough to retire? Do we want an ever greater homeless population, or maybe we can eventually send a cart around downtown in the morning to haul off the street people who died overnight. I think we're better than that. I paid plenty of taxes and maxed out FICA the last couple of decades, and I'm fine with it. It's not that I made a lot, but I didn't spend a lot, so I saved a lot, and that's how I could afford to retire before I worked myself to death. The taxes and SS I paid, I viewed like a charitable contribution to the society, like some view their church tithe.

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I suspect that part of the reason that when most social programs were established they were bi-partisan is because at the time everyone recognized this huge need for such programs due to extreme poverty. Now, since we have those programs, we really don't have people starving to death (because of the programs), so it's easy for us to forget why we started the programs.

finebead said:

Realize that Steve Forbes who owns Forbes Magazine is a rich republican who ran for president a few years ago. The repubs don't even want to see SS go away, but its good campaign talk to TALK like you want it to go away, therefore its propaganda. Fact is most americans today are not saving enough to retire and in many cases SS is all they will have. The repub philosophy is so selfish that although many are rich, they don't want to give a dime to the poor. That motivates almost all of their positions on social programs. Without SS, how will the americans live, who don't have enough to retire? Do we want an ever greater homeless population, or maybe we can eventually send a cart around downtown in the morning to haul off the street people who died overnight. I think we're better than that. I paid plenty of taxes and maxed out FICA the last couple of decades, and I'm fine with it. It's not that I made a lot, but I didn't spend a lot, so I saved a lot, and that's how I could afford to retire before I worked myself to death. The taxes and SS I paid, I viewed like a charitable contribution to the society, like some view their church tithe.

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Ponzi, Pyramid, whatever you want to call it, SS is based on using new contributions to fund earlier contributors. Now there are more takers than contributors. Dems blame retirees, i.e. life long contributors, instead of the government who used SS as a slush fund. It could have worked had contributions been invested instead of used to fund endeavors having nothing to do with SS.

When you do that in the private sector its illegal but supporters of big government continue to rationalize the ineptness of how the government runs SS.

Many who have paid into it most of their lives will never see a penny in return.

Its not a savings plan, its a tax. Why not just call it what it really is.

Μολὼν λαβέ;1063089939 said:

Ponzi, Pyramid, whatever you want to call it, SS is based on using new contributions to fund earlier contributors. Now there are more takers than contributors. Dems blame retirees, i.e. life long contributors, instead of the government who used SS as a slush fund. It could have worked had contributions been invested instead of used to fund endeavors having nothing to do with SS.

When you do that in the private sector its illegal but supporters of big government continue to rationalize the ineptness of how the government runs SS.

Many who have paid into it most of their lives will never see a penny in return.

Its not a savings plan, its a tax. Why not just call it what it really is.

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Greetings, Mo. :2wave:

:agree: There are a lot of I.O.U.s In the Social Security Fund. Trouble is that no one ever thought to repay the money that was taken by politicians over the years, starting with LBJ down to the present. So now, with the Baby Boomers retiring, there's a big problem looming? There sure is, from what I've been reading. I don't know what bright ideas today's politicians may come up with to correct the problem, but many people are counting on receiving the money they were promised because that will be the only income many people will have in order to survive in retirement.

Jetboogieman said:

But Ponzi Schemes are intentional, SS was a sound economic decision that failed to predict the future of population demographics, hardly the same things.

Words actually means things buddy.

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It not only was a ponzi scheme-it was unconstitutional. we all know it but FDR's lapdog justices ignored the tenth amendment rather than upset their master