GreenvilleGrows
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Yes? No? Why?
A Ponzi scheme is a fraudulent investment operation that pays returns to separate investors, not from any actual profit earned by the organization, but from their own money or money paid by subsequent investors. The Ponzi scheme usually entices new investors by offering returns other investments cannot guarantee, in the form of short-term returns that are either abnormally high or unusually consistent. The perpetuation of the returns that a Ponzi scheme advertises and pays requires an ever-increasing flow of money from investors to keep the scheme going.
The system is destined to collapse because the earnings, if any, are less than the payments to investors. Usually, the scheme is interrupted by legal authorities before it collapses because a Ponzi scheme is suspected or because the promoter is selling unregistered securities. As more investors become involved, the likelihood of the scheme coming to the attention of authorities increases.
A ponzi scheme is a confidence game...a criminal act; a fraud. It's designed from the first to have a limited lifespan, to illegally enrich the operator and to deprive the investors of the benefit of their bargain.
It's not possible to describe SS as a ponzi scheme -- it has no one operator, is not illegal and has yet to defeat anyone's expectations. The strain on this system which WILL require it to be reformed has as much to do with changing population mix as anything else....something that was not foreseeable in the 1930's, when it was created.
I asked what exactly Perry was claiming when he said this. I still haven't seen what his actual arguement is. S.S. is not a Ponzi scheme. Right now it is being run very much like one though.
Well - if it's run like one then doesn't that make it one?
If they fixed it - which isn't possible at this point - but let's pretend they managed to figure out how - then maybe I wouldn't' view it like the ponzi scheme that it is.
They knew - from the very beginning - that it was unsustainable . . . but they chose to not care and to ignore that and save that worry for later generations.
Well - it's later.
We're shafted.
Government profited greatly from it and not so many seem to rely on it so heavily we have to be indebted to it to limp it along.
I'm not sure they knew "from the very beginning", Aunt Spiker. But now? By 2025, there'll be something like two workers for every 10 retired people, if nothing changes.
This problem has been pointed out to us since I was 16 years old, but no one wants to volunteer to have his benefits reduced so that the solution can be sought. Mine, mine, mine, everyone chants....it's just so disturbing.
Funny how the solution to the problem is going to fall apart because the problem was never solved the first time around.
I'm not sure what you mean by "the first time"; and BTW, Medicare is an even greater beast. No way can we support 50, 60 million 80 to 90 year olds in nursing homes.
If SS can survive the Boomers, it can survive.
"First, in the case of Social Security, no one is being misled," Zuckoff's January 2009 article in Fortune magazine says. "...Social Security is exactly what it claims to be: A mandatory transfer payment system under which current workers are taxed on their incomes to pay benefits, with no promises of huge returns."
Second, he writes, "A Ponzi scheme is unsustainable because the number of potential investors is eventually exhausted. That's when the last people to participate are out of luck; the music stops and there's nowhere to sit. It's true that Social Security faces a huge burden — and a significant, long-term financing problem — in light of retiring Baby Boomers...But Social Security can be, and has been, tweaked and modified to reflect changes in the size of the taxpaying workforce and the number of beneficiaries. It would take great political will, but the government could change benefit formulas or take other steps, like increasing taxes, to keep the system from failing."
Third, his article says, "Social Security is morally the polar opposite of a Ponzi scheme... At the height of the Great Depression, our society (see "Social") resolved to create a safety net (see "Security") in the form of a social insurance policy that would pay modest benefits to retirees, the disabled and the survivors of deceased workers.By design, that means a certain amount of wealth transfer, with richer workers subsidizing poorer ones.That might rankle, but it's not fraud... None of this is to suggest that Social Security is a perfect system or that there aren't sizeable problems facing the incoming administration and Congress. But it's not a Ponzi scheme. And Ponzi himself, who died in a hospital charity ward with only enough money for his burial, would never have recognized it as his own."
I'll guess that we all knew exactly what Perry meant by saying this, he just phrased it is such a way to get his point across and I betcha we all know this to.PolitiFact Texas | Rick Perry says Social Security is a Ponzi scheme
By definition, SS is not a ponzi scheme.
SS is really just a social program funded by taxes. You don't get out what you put in. You pay for the elderly while you are employed, and get paid by the next generation of workers when you retire.] The problem is that demographic changes mean that the next generation of workers won't make enough to support boomers when they retire. Ponzi schemes are fraudulent because they are billed as normal investment setups. Social Security isn't fraudulent, so the definition doesn't fit.
I'll guess that we all knew exactly what Perry meant by saying this, he just phrased it is such a way to get his point across and I betcha we all know this to.
You just said it was. If you tell a group that they should pay into a program to help those who retire and that when you get there, those coming up will do the same for you, but then you note that the money isn't going to be there, how is that not fraudulent?
The program will have to change and adapt to meet changing situations. No one has ever claimed this was not the case.
Is it your position that it's currently being run like a ponzi scheme because it could fail?With my position being, until it is, it's currently being run like a Ponzi scheme.
Is it your position that it's currently being run like a ponzi scheme because it could fail?