lawrocket 3 #1 May 12, 2005 You know, I was replying to another thread when I thought of Social Security as an example of a Ponzi Scheme. Under a Ponzi Scheme, current and future investors are utilized to pay prior investors. The initial investments in Social Security are not put into an account. Instead, our current taxes are being used to pay for current benefits of those on Social Security. In 35 or 40 years, I will rely on current payments by others to pay for my benefits. And on and on. Those of us currently paying into the system do not have a right to our monies. If the money is gone in the future and there are no investors in it, we are out of luck. So, is Social Security a Ponzi Scheme? My wife is hotter than your wife. Quote Share this post Link to post Share on other sites
Gravitymaster 0 #2 May 12, 2005 It is the purist definition of a Ponzi Scheme. In fact it goes beyond a Ponzi Scheme in that the "participants" are actually required by law to participate. Quote Share this post Link to post Share on other sites
lawrocket 3 #3 May 12, 2005 I found this page. http://www.ssa.gov/history/ponzi.html It's Social Security's statement that it is not a Ponzi Scheme. Seems to me that the Albanian government didn't think they were endorsing Ponzi schemes back in about 1997, either... My wife is hotter than your wife. Quote Share this post Link to post Share on other sites
Gravitymaster 0 #4 May 12, 2005 QuoteI found this page. http://www.ssa.gov/history/ponzi.html It's Social Security's statement that it is not a Ponzi Scheme. Seems to me that the Albanian government didn't think they were endorsing Ponzi schemes back in about 1997, either... "The bigger the lie, the more people will believe it." Quote Share this post Link to post Share on other sites
dorbie 0 #5 May 12, 2005 It is a ponzi scheme but even ponzi schemes can work while there's a growing supply of new investors. Unfortunately in this case there isn't. The past and current recipients a.k.a. the greatest generation (the ones our elected representatives are eternally terrified of pissing off), have been living off the backs of their children and grandchildren years. For years we've known of the problem of the retirement of the baby boomers(their children), this is when the supply of investors in the ponzi scheme dries up and the liabilities start to pile up. Even if the supply of investors were stable it makes no sense, you could never get more out of the scheme than you put in without it investing to get some sort of growth or without it accumulating debt. Of course no portion of any SS contribution is ever invested and it's way too late for investment to avert the looming catastrophe. Quote Share this post Link to post Share on other sites
juanesky 0 #6 May 12, 2005 Your are not taking into account the people who actually collect benefits that have not contributed."According to some of the conservatives here, it sounds like it's fine to beat your wide - as long as she had it coming." -Billvon Quote Share this post Link to post Share on other sites
D22369 0 #7 May 12, 2005 yes it is.... did you just notice this? the only reason ponzi schemes are illegal is the government doesnt get their "cut" RoyThey say I suffer from insanity.... But I actually enjoy it. Quote Share this post Link to post Share on other sites
Keith 0 #8 May 12, 2005 Social Security isn't even as clever as a ponzi scheme. It's just plain old theft - 'we're stealing your money like it or not.'Keith Don't Fuck with me Keith - J. Mandeville Quote Share this post Link to post Share on other sites
Gravitymaster 0 #9 May 12, 2005 QuoteSocial Security isn't even as clever as a ponzi scheme. It's just plain old theft - 'we're stealing your money like it or not.' Yep, and if you don't like it and try to avoid paying, you go to jail. Quote Share this post Link to post Share on other sites
kallend 2,175 #10 May 12, 2005 QuoteQuoteSocial Security isn't even as clever as a ponzi scheme. It's just plain old theft - 'we're stealing your money like it or not.' Yep, and if you don't like it and try to avoid paying, you go to jail. Not if you work for the government.... The only sure way to survive a canopy collision is not to have one. Quote Share this post Link to post Share on other sites
SkydivingNurse 0 #11 May 12, 2005 More to the point, what is it about getting old that entitles you to my money? I say let the damn thing go bust. Quote Share this post Link to post Share on other sites
mr2mk1g 10 #12 May 12, 2005 Yes. This is why our new PM, Gordon Brown, keeps banging on about the "Pensions Time Bomb" and how he wants to try and deal with the problem. Of course it's only a matter of time before Georgy announces that he has intel. showing either the PRK, Iran or Syria have developed a Pensions Time Bomb of their own and starts an invasion in order to save the free world. Quote Share this post Link to post Share on other sites
Kennedy 0 #13 May 12, 2005 Quote Ponzi vs. Social Security Social Security is and always has been either a "pay-as-you-go" system or one that was partially advance-funded. Its structure, logic, and mode of operation have nothing in common with Ponzi schemes or chain letters or pyramid schemes. The first modern social insurance program began in Germany in 1889 and has been in continuous operation for more than 100 years. The American Social Security system has been in continuous successful operation since 1935. Charles Ponzi's scheme lasted barely 200 days. The only difference between ponzi and America's social security is that ponzi made short term promises he couldn't keep, while social secuirty makes long term promises it can't keep. Returns: ninety days versus forty years. Lasted: two hundred days versus... well we're at seventy years and getting there.witty subliminal message Guard your honor, let your reputation fall where it will, and outlast the bastards. 1* Quote Share this post Link to post Share on other sites
Gravitymaster 0 #14 May 12, 2005 QuoteQuote Ponzi vs. Social Security Social Security is and always has been either a "pay-as-you-go" system or one that was partially advance-funded. Its structure, logic, and mode of operation have nothing in common with Ponzi schemes or chain letters or pyramid schemes. The first modern social insurance program began in Germany in 1889 and has been in continuous operation for more than 100 years. The American Social Security system has been in continuous successful operation since 1935. Charles Ponzi's scheme lasted barely 200 days. The only difference between ponzi and America's social security is that ponzi made short term promises he couldn't keep, while social secuirty makes long term promises it can't keep. Returns: ninety days versus forty years. Lasted: two hundred days versus... well we're at seventy years and getting there. And the only reason Ponzi's Scheme lasted a shorter time than S.S. is because he couldn't force people to participate and he didn't have the Govt. promoting it as a good idea. One day I hope people learn not to entrust their financial futures to govt. thugs. Quote Share this post Link to post Share on other sites
rehmwa 2 #15 May 12, 2005 QuoteQuoteQuoteSocial Security isn't even as clever as a ponzi scheme. It's just plain old theft - 'we're stealing your money like it or not.' Yep, and if you don't like it and try to avoid paying, you go to jail. Not if you work for the government. Yeah, like congressmen and teachers ... Driving is a one dimensional activity - a monkey can do it - being proud of your driving abilities is like being proud of being able to put on pants Quote Share this post Link to post Share on other sites
DrewEckhardt 0 #16 May 12, 2005 QuoteSo, is Social Security a Ponzi Scheme? FICA is a regressive 12.4% tax from which certain state and federal government employees are exempt. Half of that is hidden from people who aren't self-employed and never shows up on their pay stubs. Sole earners in married couples with salaries of $60K - $90K a year and the rest of us earning $30K - $90K have a higher marginal tax rate on our salaries than single people and married couples taking in over $325,000 a year. Social Security is a bunch of government programs including disability insurance, life insurance, and a safety net for old people with insufficient funds to retire. With the government and the necessary tax burden at their current size, these programs need to exist but should be treated like other government functions, with a line entry on the budget and funding from general revenues. Currently Social Security is also a mandatory retirement savings plan with attrocious returns. Assuming the retirement age isn't increased, FICA taxes don't go up, and social security benefits increase with inflation I'll need to outlast my statistically expected lifespan by five years to get a 0% inflation adjusted return on my investments. If I took my current investment out, made the same contributions in the future, and got a 3% inflation adjusted rate of return I could get $134K a year for the same 15 years: over 4X my social security benefit $72K a year until I die at 100: over 2X my social security benefit $44K a year forever: nearly 30% more than my social security benefit with $1.5M going to my heirs As it stands the numbers are $32K a year with a big fat zero going to my heirs. Which would you rather have? Quote Share this post Link to post Share on other sites
