Is Social Security a Ponzi Scheme?
You can leave an optional "tip" with Mahalo's virtual currency, Mahalo Dollars. If you are asking a difficult question that might require some research, or if you'd like a wide variety of feedback, a higher tip often leads to more answers to your question.
M$5 Answers
So while the SSA has found themselves in tight economic water and without the continual participation of the American public it would fail this does not convert a Social Security system designed to keep elder Americans afloat in their retirement years into an intent to defraud investors/participants.
Even in the broadest definition of "Ponzi Scheme" the SSA lacks the malicious intent to defraud that would be necessary to include the SSA in the definition of "Ponzi Scheme" or any sort of investment scheme.
You can leave an optional "tip" with Mahalo's virtual currency, Mahalo Dollars. If you are asking a difficult question that might require some research, or if you'd like a wide variety of feedback, a higher tip often leads to more answers to your question.
M$Has anyone ever read, "The Emperor Has no Clothes?"
You can leave an optional "tip" with Mahalo's virtual currency, Mahalo Dollars. If you are asking a difficult question that might require some research, or if you'd like a wide variety of feedback, a higher tip often leads to more answers to your question.
M$You can leave an optional "tip" with Mahalo's virtual currency, Mahalo Dollars. If you are asking a difficult question that might require some research, or if you'd like a wide variety of feedback, a higher tip often leads to more answers to your question.
M$
@shannonpatrick
I didn't say anything about the validity or necessity of social security. In fact I believe that it is an important program that needs to be saved. A society like a chain is only as strong as it's weakest link.
Structurally it is a ponzi scheme. The only way to pay the people now collecting social security is with new money coming in. If no new money was paid into the system social security would be bankrupt in 4 years.
"By the same simplistic reasoning one could argue that Banks, Credit Cards, Insurance, Mortgage Industry, and the Federal Reserve System are also Ponzi Schemes."
Lets see NO.
Banks generate revenue from fees and lending money. On the lending operations the bank takes the money deposited into the bank and lends it out collecting interest. Some of this goes to the depositors and the bank keeps a portion. The profits generated go to the banks share holders. The people depositing money are paid by lending not other people depositing. So not a ponzi scheme.
Credit card companies lend money from investors and collect interest to generate revenue and profits. So the old investors are not from the new investors.
If the only way for the existing investors to get their money out is with new investors coming in that is structurally a ponzi scheme.
@shannonpatrick17. An unhelpful vote is not warranted for this answer. In fact a simple yes or no should suffice for this question.
morriss003 I roll my eyes in your general direction
I do believe the answer is unhelpful because like you I think Social Security is not a Ponzi Scheme.
By the same simplistic reasoning one could argue that Banks, Credit Cards, Insurance, Mortgage Industry, and the Federal Reserve System are also Ponzi Schemes.
morriss003 if you would follow the golden rule, then your own answer a simple NO would have been sufficient. But thanks for speaking on behalf of Congress and enlightening us that we should all be afraid because our national security is threatened.
Also thanks for the head up about business week, maybe you could do us all a solid and mail that issue to Congress?
FYI I do have Hans Christian Andersen's "Fairy Tales Told for Children" on my bookshelf (it's down low where my kids can reach it) but rarely bring it up to back up arguments... jus saying
If you can convince me that fallacies are helpful answers I'll take my vote back, k
http://en.wikipedia.org/wiki/Fallacies
In logic and rhetoric, a fallacy is incorrect reasoning in argumentation resulting in a misconception. By accident or design, fallacies may exploit emotional triggers in the listener or interlocutor (e.g. appeal to emotion), or take advantage of social relationships between people (e.g. argument from authority). Fallacious arguments are often structured using rhetorical patterns that obscure the logical argument, making fallacies more difficult to diagnose. Also, the components of the fallacy may be spread out over separate arguments.
This fell apart though as the elderly population and inflation increased at a rate faster than the money paid into the system. A big part of this was the enormous loss of young males during WWII throwing off the balance of workers to beneficiaries. This will heighten as baby boomer retire.
The reason most people feel angst towards SS is that all they know is today. A program losing money that will have serious issues as more baby boomers retire. If you look at the origins of the program it makes sense. if you just look at today's snapshot you only see what is wrong.
http://en.wikipedia.org/wiki/Social_Security_%28United_States%29
You can leave an optional "tip" with Mahalo's virtual currency, Mahalo Dollars. If you are asking a difficult question that might require some research, or if you'd like a wide variety of feedback, a higher tip often leads to more answers to your question.
M$
http://www.merriam-webster.com/dictionary/ponzi+scheme
You can leave an optional "tip" with Mahalo's virtual currency, Mahalo Dollars. If you are asking a difficult question that might require some research, or if you'd like a wide variety of feedback, a higher tip often leads to more answers to your question.
M$
Ponzi did figure out the International Reply Coupons loop hole which was a legitimate way to game the system for profit, but his claims as to the amount of profit is what ultimately got him into trouble. I take the definition of a Ponzi Scheme as being that he promised profits to investors he knowingly could not deliver. He was taking investor money and not investing it at all.
So is a "Ponzi Scheme" the same as robbing Peter to pay Paul? are these two terms interchangeable?
I don't get the leap from a national insurance/indemnity program to a scheme where investors are duped by lying to them.
Very well said buddawiggi!
Personally I think the type of thinking that people who rebuke the very idea of Social Security is totally self-centered and arrogant. On the spectrum of Love and Fear this thinking seems to be off the deep end of fear.
Social good, the common interest of the people, the golden rule, and so on, never seem to enter the argument which always comes back to entitled shallow thinking Americans scared they are paying for others.
If anyone wants to know why social security is not only a good idea but failing to meet the needs of people, I would love to discuss it with them.
Also, the money from Social Security taxes is actually invested. Even though the investment in Treasury Bonds etc. seems superficially circular, it means that the investment is actually backed by the credit of the US government and its ability to fund its obligations though taxes.