The Ponzi Scheme Known as Social Security

This is Charles Ponzi and he is the inspiration for Social Security.



A hat tip needs to go to Michelle Malkin for pointing out this story. It seems that Barack Obama has made enemies with the nutroots recently. His crime is pointing out that social security has some problems. Social Security is the third rail for the base of the Democratic Party and much like someone's ugly wife, criticizing it brings an emotional response. He got hit by most of the usual suspects

All of which makes it just incredible that Barack Obama would make obeisance to fashionable but misguided Social Security crisis-mongering a centerpiece of his campaign. It’s a bad omen; it suggests that he is still, despite all that has happened, desperately seeking approval from Beltway insiders.

...

Barack Obama, please realize that you are assisting the right’s efforts to get rid of Social Security. Their strategy is to make the public think that the program is in trouble and then sweep in with their “solution.” …IS your heart in the right place? Social Security is not in trouble. Stop saying it is.

Now, the right blogosphere is having fun with this little political civil war however they should also remember their own threats against most of the candidates for the Rep nomination because they dared not toe the company line on things like abortion, campaign finance reform, immigration, etc. We all have our third rails and Democrats have among them Social Security.





I don't much care about this little battle. I frankly believe that Obama is better off taking them on. He has nothing to lose at this point anyway and the nutroots turn off as many people as they turn on. I am glad he said what he said and frankly showed political courage that I wish more politicians would show.





That said, I am much more interested in the problems facing Social Security and their solutions. I pay about seven percent of each check to social security and I don't believe that I will get anything when I retire.





A Ponzi scheme works as such. I came to you and promise that if you give me $100 today I will give you say $200 in the future. The way I get your $200 is from other suckers that are made the same promise. This works until I find no more suckers.





Now, the way Social Security works is that today's workers pay for today's retirees under the promise that once they retire, that day's workers will pay for them. That is no different than any other Ponzi Scheme only two things: 1) the government doesn't even hide that it is a Ponzi Scheme and 2) since the government is doing it instead of being illegal it is Social Security.





Frankly, the politicians can raise the age limit or the limit on income or any other limit, and it won't change the fundamentals behind it. If one group is used to fund the investment of another group, that PYRAMID scheme will fail once you have an imbalance in the investors. Say for instance, one month my ponzi scheme had a huge number of new investors and the next month I slowed down. I wouldn't be able to fund the new investors from the first month. That is what is happening now. It wasn't a month but years of baby boomers being born, and now there aren't enough workers to fund their retirement.





Anyone that knows anything about Ponzi Schemes knows that at some point there will be suckers holding the bag. It maybe the baby boomers if we don't figure it out, or it might be my generation or maybe even the generation after us. It matters not. The system is flawed. Social Security is among the worst ideas our government has created. It is a state sponsored legal Ponzi Scheme. That is what we should focus on. Everything else is trivial.

Hillary to Save Social Security

I found this via newsmax. Hillary seems to have reached a new level of unrealistic campaign promises with this one...

"The New York senator told the AARP's legislative conference that she would
bring a "renewed national commitment to Social Security" to the White House."

Not only did she promise to save social security, but she also promised that she wouldn't do several things...

"Democrat Hillary Rodham Clinton promised retirees that if elected president she
will not cut Social Security benefits, raise the retirement age or privatize the
taxpayer-funded system...
"She also said she does not support cutting
benefits or increasing the retirement age. Seniors can begin collecting partial
benefits at age 62, with full benefits available at age 67 for those born in
1960 or later."

Now, I personally have considered social security a Ponzi scheme. A Ponzi scheme works by getting a person to invest with the promise of future returns. The way that person is paid is by getting more people to invest with their own promise of future returns. Social security works much the same way. Each generation is paid by the taxes of the generation just younger than them. All working Americans are currently paying for the current retirees.

As with any ponzi scheme it works as long as you can find new suckers. The social security ponzi scheme had an endless supply of new suckers or at least that is how it would have worked in theory. The only problem was if one generation had a boom in births...

Now, the baby boomers are the suckers holding the final bag in the ponzi scheme known as Social Security. There aren't enough new suckers to fund their promised investment. Of course, all of this is lost on Hillary Clinton who says this about Social Security,

" This is the most successful domestic program in the history of the United
States"

If it is the most successful domestic program in the history of the United States, then why does it need saving? By Hillary's standards the airlines are the most successful businesses in the United States.

Of course, Hillary won't do any of the politically dangerous things to save Social Security: she won't cut benefits, she won't raise the retirement age, or privatize. In fact, she said this about privatization...

"When I'm president, privatization is off the table because it's not the answer
to anything"

One has to wonder really hard if she is talking strictly about Social Security or in general. Remember, Hillary also believes in socialized medicine, having a village raise a child, and she was even once quoted as saying, "it is time to end the on your own society and bring in the era of the we're in it together society". Hillary is closer and closer everyday to admitting what I already know that she is in fact a Socialist .

Finally, Hillary has mastered the art of Chutzpah. With all of these other options off the table, how exactly does she plan to save social security...

" Clinton said instead she will protect the program through fiscal
responsibility and criticized President Bush's leadership on the issue."

Clinton maybe a lot of things but a champion of efficient government, fiscally responsible government, she is not. Just a few weeks ago she promised to set aside one billion dollars to bail out struggling homeowners. That maybe noble and compassionate (and of course downright counterproductive), but it is NOT efficient. She also wants to socialize medicine, about one eighth of our economy. That plan maybe a lot of things but efficient it is not. She is the one that wants a village to raise a child. That plan maybe a lot of things but efficient it is not. How exactly does efficient government square with Hillary's plans to nationalize everything she possibly can? I don't know and I doubt she does either.
Of course, we all know what "fiscal responsibility" really means and the National Review points it out...

Well, let's see, when raising the retirement age, cutting benefits, and private
accounts are taken off the table, what's left? You're pretty much left with the
option of bringing more money in, a move more commonly known as tax
increases."

they finish by describing everything that Hillary wants, not just for Social Security, but for all policy...

"Privatization is "not the answer to anything." Well, we know where we stand
with her - government ever bigger, ever more controlling, ever more powerful,
ever more expensive"