Skip to comments." IS SOCIAL SECURITY A PONZI SCHEME ? "
Posted on 09/08/2011 6:23:38 AM PDT by Graewoulf
At 7:33 AM CDT Rick Santelli asked guest host Thomas L. Friedman, New York Times foreign Affairs Columnist, and author of his new book " That Used to be Us, " the following question: " Is Social Security a Ponzi Scheme ? " Tom replied, " Your question is idiotic ! " Rick then replied: " Your answer is idiotic! "
GAME ON !
Look up the definition of “Ponzi Scheme” and tell me how it is NOT one.
Beck is defending Perry’s response re: social security last night...ponzi scheme...deal with it.
Got to hand it to Rick Perry for being bold enough to bring it up!
The Feds can print more money, that is the only difference.
I love Santelli!
A Ponzi Scheme is voluntary. If you are smart or cautious, you can avoid them completely. SS is enforced by the law, thus no amount of caution can allow you to avoid getting scammed.
SS is worse.
It is not a Ponzi scheme in the same way that the AFL-CIO is not an organized crime syndicate.
—it is worse than a “Ponzi” scheme because it is collected at the point of the government gun—Ponzi schemes are voluntary scams, invested in by fools-—
Of course it is. The problem for the “progressives” is that THEY killed the scheme by aborting 50 million contributors.
As with all ponzi schemes it collapses when you lose new suckers to invest.
Classic Ponzi scheme.
A Ponzi scheme is a fraudulent investment operation that pays returns to separate investors, not from any actual profit earned by the organization, but from their own money or money paid by subsequent investors. The Ponzi scheme usually entices new investors by offering returns other investments cannot guarantee, in the form of short-term returns that are either abnormally high or unusually consistent. The perpetuation of the returns that a Ponzi scheme advertises and pays requires an ever-increasing flow of money from investors to keep the scheme going.
That might as well have been an entry for "Social Security System," except for the short term part. But returns, at least for older Americans, have been far in excess of what they put into the system.
I’d like to hear more about the Chilean retirement system that Cain mentioned last night...
forget the Criminal elements, SS depends on an ever expanding group of new members to pay out to the old members. Problem is demographically there is not an ever expanding base comming down the age line. Add in 25% teenage unemployment amoung the reduced population base, and you have a “collapsed” pyramid scheme.
Hey Tommy... What’s the current account balance in the Social Security “lockbox”, you ignorant, socialist-loving a$$ clown.
Social security is a government run PONZI scheme with a printing press! Carlo Ponzi didn’t have one of those and as faras I know he didn’t FORCE his victims in either!
It’s every bit a Ponzi Scheme, but most politicians don’t want to be associated with a negative discussion of Social Security for fear of the lie machine the Democrats keep so well lubricated, maintained, and functioning.
1) No one is going to wave a wand and make Social Security disappear overnight, reducing all of our seniors to abject poverty.
2) People who are close to retirement are not going to be abandoned.
3) Young people will be transitioned to something that is sustainable.
Yes, Social Security is a ponzi scheme. It had to fail sometime: that's what ponzi schemes do. We can recognize that it was a terrible program, while still aknowledging that we have a commitment to some people. No one is going to just throw them all under the bus.
Of course SS is a Ponzi scheme and this shows the boldness of Perry to call a spade a spade. The problem is the country is likely to reject the truth but someone had to say it.
Kudos to Santelli.
Anyone who is intelligent understands that it is a Ponzi Scheme, but unfortunately a lot of people are not intelligent. They need to be spoon fed the info to understand it.
The Ponzi scheme that is SS will continue to get worse, the numbers for the coming years will bring about a Madoff moment. I hope Freidman is not counting on his SS.
Of course it is. The Government is doing the exact same thing Bernie Madoff is in prison for.
Santelli was brilliant. Friedman was moronic and shocked that his put down to Santelli was return with full force and more.
You mean like the Paul RYAN plan?
It is worse than a Ponzi scheme. Nobody is forced to invest in a Ponzi scheme, and in most cases, greed leads most investors/victims to invest in deals that clearly seem dodgy.
With Social Security we have no choice.
Problem is we'll have 1/3 of the population expecting $20,000 in annual social security benefit checks supported by the other 2/3 where the median annual earned income is $44,410. (Then there is all that other gov't spending like defense and the interest on the mountains of debt that Zero has accumulated on his spending binge.) It is basic arithmetic. This is not possible. Denial is not just a river in Egypt.
Well, sort of.
I think when it was thought up, the premise was each generation would produce more and more Social Security paying wage earners who would outnumber prior generations and so sustain the system. Also, the average lifespan pst retirement was pretty low back then. It has exploded recently.
However, under Johnson, Carter and Clinton the system was distorted by using the fund for non-Social Security purposes, and the population dynamics changed. The number of collecting, non-paying raiders increased with the explosion of under the table earning illegals.
So it wasn’t a Ponzi scheme when it originated, but has now become one. Never trust the government to run anything, especially with your money.
While off topic, I hope Santelli goes after Cramer today. Cramer is arguing that deficit reduction shouldn’t be a priority because treasury yields are so low right now. This is so dangerous, because while it sounds credible, this line of thinking will end disastrously.
T’s a low because no one wants out of cash (and big money can’t just be parked in a bank), and shows how fiscal and monetary “stimulation” is doing nothing (and is actually acting as a depressant). No business expansion, no increase in spending — just everyone holding onto cash. But when T’s go up, which they eventually will, there will be no way to reign in our debt, and servicing that debt will completely destroy our economy.
That was clever ;-)
It’s a Ponzi scheme. Of course, the Dim’s will try and use this as a scare tactic to Granny, against Perry and Pubs. Pubbies MUST control the dialogue on this with basic explanations of exactly why/how SS is a Ponzi scheme - and how/why it must be fixed.
The format wouldn’t allow that long an answer.
SS is a pay as you go system. Today's workers pay the benefits for today's retirees. SS has been in the red (benefit payments exceed revenue) since May 2009, which is why SS is cashing in its IOUs in the SSTF to make up the shortfall.
Obama's 2% reduction in the payroll tax just decreases revenue and increases the shortfall. And the General Fund must borrow the money to redeem the SS IOUs, thereby increasing the deficit. Moreover, the law that authorized the 2% reduction says that the SSTF must be reimbursed for the loss of revenue caused by that reduction at some future date. In essence, we are using the SSTF IOUs as a stimulus.
It will be until they come clean and take concrete steps to fix it out in the open.
No, it's a pseudo-Ponzi scheme.
The government does not claim, nor does it promise, that your FICA taxes belong to you. If they did, it would be a Ponzi scheme.
If you want to BELIEVE that your "contributions" belong to you, that's fine with the Feds. But their actual position, both as to law and as to fact, is not difficult to discover.
SS is worse.
No, it was clear from the beginning what SS was. Go read the Jacoby piece on SS that has been posted today.
And the demographics were bad in in the 30s when the law was enacted. The Post-War Baby Boom put off the crisis for a while, but in the 30s no one could forsee that temporary reprieve.
We decided that the minimum contribution should be 10 percent of wages. But workers may contribute up to 20 percent. The money contributed is deducted from the worker’s taxable income. The money is invested by a private institution, and the returns are untaxed. By the time a worker reaches retirement age—65 for men, 60 for women—a sizable sum of capital has accumulated in the account. At retirement the worker transforms that lump sum into an annuity with an insurance company. He can shop among different insurance companies to find the plan that best suits his personal and family situation. (He pays taxes when the money is withdrawn but usually at a lower rate than he would have paid when he was working.)
As I said, a worker can contribute more than 10 percent if he wants a higher pension or if he wants to retire early. Individuals have different preferences: some want to work until they are 85; others want to go fishing at 55, or 50, or 45, if they can. The uniform pay-as-you-go social security system does not recognize differences in individual preferences. In my country, those differences had led to pressure on the congress to legislate different retirement ages for different groups. As a result, we had a discriminatory retirement-age system. Blue-collar workers could retire at 65; white-collar workers could retire more or less at 55; bank employees could retire after 25 years of work; and the most powerful group of all, those who make the laws, the congressmen, were able to retire after 15 years of work.
Under our new system, you don’t have to pressure anyone. If you want to retire at 55, you go to one of the pension-fund companies and sit in front of a user-friendly computer. It asks you at what age you want to retire. You answer 55. The computer then does some calculations and says that you must contribute 12.1 percent of your income to carry out your plan. You then go back to your employer and instruct him to deduct the appropriate amount. Workers thus translate their personal preferences into tailored pension plans. If a worker’s pension savings are not enough at the legal retirement age, the government makes up the difference from general tax revenue.
The idea here is basically correct. However, this statement is usually joined to a second statement to the effect that this principle was violated by subsequent Administrations. However, there has never been any change in the way the Social Security program is financed or the way that Social Security payroll taxes are used by the federal government.
The Social Security Trust Fund was created in 1939 as part of the Amendments enacted in that year. From its inception, the Trust Fund has always worked the same way. The Social Security Trust Fund has never been "put into the general fund of the government."
Most likely this myth comes from a confusion between the financing of the Social Security program and the way the Social Security Trust Fund is treated in federal budget accounting. Starting in 1969 (due to action by the Johnson Administration in 1968) the transactions to the Trust Fund were included in what is known as the "unified budget." This means that every function of the federal government is included in a single budget. This is sometimes described by saying that the Social Security Trust Funds are "on-budget." This budget treatment of the Social Security Trust Fund continued until 1990 when the Trust Funds were again taken "off-budget." This means only that they are shown as a separate account in the federal budget. But whether the Trust Funds are "on-budget" or "off-budget" is primarily a question of accounting practices--it has no affect on the actual operations of the Trust Fund itself.
you can avoid SS either by not working or working for the federal government which for the most part is the same thing as far as I can see.
That is why they wanted control of Health care. Now they can offer the Old people an easy way out (Death Panel)and the S.S. problem is solved.
Look up the definition of Ponzi Scheme and tell me how it is NOT one.
Of course, if the question is ever turned around, or if a candidate ever reads the dictionary definition of Ponzi scheme in a debate, it's game over.
Which is why candidates can speak no longer than one minute in public debate (on the major networks or news networks) and candidates aren't allowed to bring any reference materials/props to the debate (like a dictionary).
The truth can not be spoken or demonstrated in public. The Party Propaganda Ministry will not allow that. Only emotionally charged (though true) phrases and angry emotions can be shown to the great unwashed.