Ponzi Schmonzi

Updated - see below:

So now they're arguing about discussing Social Security - at last. It's darned disgusting to think that it's taken this long for anything like a real discussion of what's going on with that program to finally actually happen.

Everyone seems to admit that it can't work the way things are now, one Governor is saying it's a broken program that needs to be reformed and another Governor calls it a Ponzi Scheme. He's not really right, but he's not as wrong as everyone want to say he is.
Technically, Social Security may not qualify as a Ponzi Scheme - but we can sure see that it's not very far from a pyramid scheme or a multi-level marketing operation. Ponzi counted on a continual doubling of investors to fund the earlier entrants - that's why his scheme worked for less than a year, and how he got his name attached to one of the biggest scams of all time. Social Security counts on lots of present workers paying in to fund the benefits of fewer former workers (aka retirees)

This Guy says Social Security

"creates a strong link between the aged and the working-age population–today’s workers create the capital, the technology, and the wealth that will support tomorrow’s generation. Embedded in its…formulas is the notion that those of us who came before, whether they were teachers, accountants, homemakers, mail carriers, barbers, cashiers, or lawyers, have built up the productive capacity of our nation.
When the children of these workers come of age (along with new immigrants), they will earn their living from this infrastructure while also making their own contributions. As they do so, we will peel off some portion of their earnings to provide pensions for their forebears, just as those forebears did for their own predecessors…Social Security is thus an elegant collaborative solution to a universal challenge.”

 He's totally off his nut. If any of that crap drivel were actually true, then no one would have been sold the bill of goods that there are individual accounts where each worker's contributions go to grow in anticipation of retirement. That's why retirees think they are receiving the proceeds from their Social Security "contributions" (known more formally as Federal Insurance Contributions Act employment taxes). Former senator Algore told us he was going to move that money - that doesn't really exist - into a lockbox for us; that's right, folks, a lockbox!

What's actually in the Social Security accounts is a fiction of US Treasury debt - basically a promise by the government to repay the money that they borrowed from our "accounts" by spending it again. Spend that money again? Just because the feds think they can tax income over and over, they seem to have gotten it into their heads that they can spend the same money over and over as well (there's nothing in there to keep these crazy ideas out, I guess).

Here's the way it really is. Social Security isn't a Ponzi scheme, and it's not necessarily going to go under, because congress can simply change the benefits at any time - there are no guarantees, there are no individual accounts, and there's no lockbox.

Call it whatever you want - it's not something a rational man would count on.

Update:
I came across this article that came out after mine and seems to make some of the same points I did, (I'm not saying there's anything fishy, I'm just saying mine was first) but with a bit more nastiness than mine - more the way I wanted mine to come across when I wrote it in the first place but I was feeling too charitable at the time if you'll pardon the expression.

Posted by Lewis Cannon

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Think of the Children!

Planned Parenthood is celebrating the inclusion of birth control in all 0bamacare plans with a dance video featuring a package of birth control pills cavorting in Bollywood style for some bizarre reason. If you ask me, the producers of Slumdog Millionaire should sue the crap out of them for doing such a rotten ripoff of their movie.

The whole idea seems to be, at least according to Nancy Pelosi, that whenever people have children it costs the government money, so by paying for the pills to stop kids from being born we'll all save money and not have so much medical spending coming out of our tax coffers in the future. Somehow the "logic" escapes me.

If kids grow up to have jobs and pay taxes, they should be a net plus, even to the government. If that's not how it works, then that means that each person in the nation is costing our leaders more money than he or she is worth, so by that logic we ought to just all drop dead in order to save the country.
It seems to me that even the knuckleheads in DC should be able to figure out that with the Ponzi scheme they like to call Social Security, we need more workers all the time to pump the SS taxes into the system for the retired folks who are drawing it out.
If we're not going to have kids of our own any more, are they planning on importing a bunch of Mexicans to pay the taxes for us? Don't they know that a bunch of that money gets sent back to Mexico to keep that economy alive and functioning (such as it is)?

You say unintended consequences. I say morons.

I'm right.

Posted by Lewis Cannon