" IS SOCIAL SECURITY A PONZI SCHEME ? "

MCNBC Tv | September 8, 2011 | Rick Santelli

[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 !

[WayneS]

Yes.

[w1andsodidwe]

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.

[WayneS]

Good point.

[Sea Parrot]

Wife and I are old duffers, we are at the pyramid level where we are benefiting from SS. But our children, very iffy, our grandchildren, not a chance in Hades if not restructured.

[Lets Roll NOW]

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.

[eyedigress]

Of course it is. The Government is doing the exact same thing Bernie Madoff is in prison for.

[WashingtonSource]

Santelli was brilliant. Friedman was moronic and shocked that his put down to Santelli was return with full force and more.

[Marty62]

You mean like the Paul RYAN plan?

[Above My Pay Grade]

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.

[kabar]

Why Social Security is a Ponzi Scheme

[Sooth2222]

"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."

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.

[2001convSVT]

YES!

[ZULU]

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.

[jjsheridan5]

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.

[WestwardHo]

It's worse than a Ponzi Scheme when Social Security benefits are paid out to people who have never worked.
Example: Friend died in a plane crash. He worked for the Forest Service. His lucrative retirement went to his widow who never worked. She also received SS benefits for her three young children until they turned 18yrs. After his death she went to work, but the SS continued.
This is unsustainable....and in the end retirees who spent years paying in will end up with nothing.
Want to discuss SS payments going to foreign countries to persons previously married to Americans...?
The American worker is not a bottomless money pit.

[achilles2000]

That was clever ;-)

[Jane Long]

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.

[achilles2000]

The format wouldn’t allow that long an answer.

[kabar]

In 1950 there were 16 workers for every retiree; today there are 3.3; and by 2030 there will be two. We are an aging society. In just 20 years, one in every five Americans will be 65 or older--about twice what it is today.

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.

[ImJustAnotherOkie]

It will be until they come clean and take concrete steps to fix it out in the open.