A Ponzi scheme is maintained - at least for a while - because the operator
pays out to those first in by using what is paid in by those who come
later. Exactly how does social security differ from that? The only
difference I can see is that if the feds don't take in enough money to
meet their committments they can just print more.
Read some of the links I just posted.
But to address your specific point: A Ponzi scheme fails because it runs
out of new "investors" - SS will never run out of "new investors".
In other words: A Ponzi scheme is generally a system in which investors
think they?re investing in something real but are instead being used to
pay one another back. Eventually, the scheme runs out of new investors
Here?s how the Social Security Administration -- which, somewhat
touchingly, has a whole web page explaining why its not a Ponzi scheme --
describes Social Security: ?It would be most accurate to describe Social
Security as a transfer payment--transferring income from the generation
of workers to the generation of retirees--with the promise that when
current workers retire, there will be another generation of workers
behind them who will be the source of their Social Security retirement
The superficial similarity to a Ponzi scheme is that different sets of
investors are relying on future investors, or at least future growth, to
get paid back. But that defines a Ponzi scheme so broadly as to make the
term meaningless. In that definition, any intergenerational transfer
system is a Ponzi scheme.
Not as long as it is mandatory and not as long as the feds can keep taxing
future workers at higher and higher rates.
When I was 50 - I'll be 82 next summer - I figured that if I could dump
social security, letting them keep everything I'd paid in thus far, I
could save enough in the next 15 years to pay myself what the SS would be
but WITHOUT touching the principal.
Who said anything about maximum contribution which - IIRC - was about 15%
(self employed, corp.)? I said SAVE. And let us not forget that at a
very realistic 6%, the principal doubles every 12 years.
The point is that people could do better for themselves than social
security does. I certainly hope everyone reading this has a Roth IRA...it
is the only gift the feds have ever given us.
Yes, people could have done better IF they saved that 6%. How many
would? Look at the big picture. Even with IRA, 401k,one third of the
eligible people are not saving anything at all. 14% of those at
retirement age have nothing saved.
They have nothing saved, but they do have SS. If they did not have at
least that much, we'd be supporting them in some form of welfare even
more than we do now. Look around. How many steady working people do
you see that have no savings account, no checking account and less than
20 bucks in their pocket. There will be many of them. (they will have
a cell phone though)
And a big screen TV.
I would have been amenable to a compromise.
- OR -
Stick at least the same amount into an inviolate account.
One of the things I think schools should be teaching is how to manage
money. If they had done so, pawnshops would have gotten less of my money
when I was 8 - 21 during my Navy years :)
I also think they - and their parents - should be teaching how to delay
gratification. So much of the stuff people dribble their money away on
are things they won't be using in a rather short time...if they would just
delay purchases for 30 days, the desire would often fade; if they still
wanted it, OK, buy it. BUT FOR CASH.
For your personal benefit, here's how the cow ate the cabbage as to why
SS is demonstrably NOT insurance.
Social Security is, by law and a SCOTUS ruling, a TAX, not an insurance
The Supreme Court decision in 'Flemming v. Nestor' clearly states that
Social Security is NOT insurance, _as there is no contractual agreement
between taxpayer and government_ .
Insurance companies use premiums, a premium is not a tax and the
premium, and any deductible, is subject to a contractual agreement, not
so with Social Security.
Insurance companies invest premiums, and use the premiums to make a
profit by applying the 'law of large numbers', which states that "for a
series of independent and identically distributed random variables, the
variance of the average amount of a claim payment decreases as the
number of claims increases", and by using deductibles to offset
Social Security does none of the above.
Liberals love, either through ignorance or malice, to call the SS system
"insurance", which is nothing more than sleight of hand a subterfuge to
mask the fact that it is a TAX.
However, to be charitable, the old saying particularly applies to this
issue: "Never attribute to malice that which is adequately explained by
If you want further argument, take it up with SCOTUS.
Absolute leftist poppycock! The payments are progressive. The less
you make and the fewer years paid, the more, proportionally, the
payout. Insurance has a flat payback. You can buy as much as you
have need for. Insurance premiums are invested in securities. The
payout is taken from those securities, *NOT* the current customers.
Insurance companies don't blow the early premiums then try to make
good on it later on the current crop of suckers (ponzi scheme
It's not just that you lefties are so farking stupid, it's just that
so much of what you know is complete bullshit.
- what Reagan should have said
You lefties really have a lot to learn.
Biggest impact on the SS program is tobacco IMHO.
How many hundreds of thousands of people who paid into SS all their
lives only to die from tobacco related diseases just a couple of years
they could start collecting benefits?
All those funds just stay in the pot.
Pretty standard actuarial table calculations in the insurance
You'll never see it for the same reason you don't see prison road gangs
[think cool Hand Luke] anymore.
You put all those people to work in that manner and you put a bunch of
contactors out of business. And, those contractors that get rich off
government contracts make healthy contributions to re-election campaigns.
Dave in SoTex
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