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Ponzi and Social Social Security

Discussion in 'Politics, Elections & Legislation' started by mrskeet410, Sep 16, 2011.

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  1. mrskeet410

    mrskeet410 TS Member

    Joined:
    Jan 29, 1998
    Messages:
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    The Great Ponzi Debate
    by Charles Krauthammer
    09/16/2011

    "WASHINGTON -- The Great Social Security Debate, Proposition 1: Of course it's a Ponzi scheme.

    In a Ponzi scheme, the people who invest early get their money out with dividends. But these dividends don't come from any profitable or productive activity -- they consist entirely of money paid in by later participants.

    This cannot go on forever because at some point there just aren't enough new investors to support the earlier entrants. Word gets around that there are no profits, just money transferred from new to old. The merry-go-round stops, the scheme collapses and the remaining investors lose everything.

    Now, Social Security is a pay-as-you-go program. A current beneficiary isn't receiving the money she paid in years ago. That money is gone. It went to her parents' Social Security check. The money in her check is coming from her son's FICA tax today -- i.e., her "investment" was paid out years ago to earlier entrants in the system and her current benefits are coming from the "investment" of the new entrants into the system. Pay-as-you-go is the definition of a Ponzi scheme....."

    +++++++++++++++++++++++++++++++++++++++++

    The good news is that the problem can be solved. Read full article at link to find out how.
     
  2. mrskeet410

    mrskeet410 TS Member

    Joined:
    Jan 29, 1998
    Messages:
    3,064
    The Great Ponzi Debate
    by Charles Krauthammer
    09/16/2011

    "WASHINGTON -- The Great Social Security Debate, Proposition 1: Of course it's a Ponzi scheme.

    In a Ponzi scheme, the people who invest early get their money out with dividends. But these dividends don't come from any profitable or productive activity -- they consist entirely of money paid in by later participants.

    This cannot go on forever because at some point there just aren't enough new investors to support the earlier entrants. Word gets around that there are no profits, just money transferred from new to old. The merry-go-round stops, the scheme collapses and the remaining investors lose everything.

    Now, Social Security is a pay-as-you-go program. A current beneficiary isn't receiving the money she paid in years ago. That money is gone. It went to her parents' Social Security check. The money in her check is coming from her son's FICA tax today -- i.e., her "investment" was paid out years ago to earlier entrants in the system and her current benefits are coming from the "investment" of the new entrants into the system. Pay-as-you-go is the definition of a Ponzi scheme....."

    +++++++++++++++++++++++++++++++++++++++++

    The good news is that the problem can be solved. Read full article at link to find out how.
     
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