Why is Social Security not considered a Ponsy Scheme?
By Troublegum
@Troublegum (641)
United States
March 15, 2009 7:49pm CST
Ok in the wake of all the Bernie Madhoff scandal something hit me.
Bernie got in trouble, because he was taking money of current investors and giving it as payout to past investors who are cashing out. So money invested was not actually invested, it was just an IOU on the assumption that later people would pay. This all worked fine until more people started cashing out than were paying in. I was dismayed about all the people he swindeled, but then I realized something.
This is exactly the same way our current Social Security system works. People collecting on SS are simply being paid by people paying in at the moment, and people who are paying in, are not investing in their future, they are just hoping that there will be enough people paying in when they retire that they can get their benefit. The only difference is that we are required to be swindled by SS. Where am I wrong?
1 person likes this
3 responses
@melosus (36)
• United States
16 Mar 09
I believe you are incredibly right!
The big difference is that social security is run by the government, and there's really not much we can do about it.
Hopefully... HOPEFULLY... there will somehow be enough money left in the social security kitty to cash out as people get older.
1 person likes this
@lilwonders456 (8214)
• United States
16 Mar 09
Yep the only difference is your being ripped off by the federal government so somehow that makes it ok. Personally I think wrong is wrong. But you know how double standards are with the federal government. I wonder if anyone has brought to their attention that SS is basically a Ponsy Scheme.
