Since Ponzi schemes are illegal should congressmen and senators that vote to retain social security be indicted and prosecuted?

[KelleyNice]

Social Security Ponzi Scheme

Second Question: What year will the social security scheme fail?

[DWornock]

Senators and congressmen that vote to modify or retain the Social Security Ponzi scheme should be indicted and prosecuted using the very laws congress passed to prosecute other Ponzi schemes. And, since they compound their crime by making it mandatory, they should be given the maximum penalty. Sending several hundred congress criminals to prison is the best thing that could happen for our country.

I don’t know the exact year the Social Security Ponzi scheme will fail. However, unless it is modified by increasing the age, increasing taxes, or reducing benefits, it will fail by the year 2030 and, regardless of how much it is changed to extend its life, provided we still have the same government; it will fail by the year 2040.

[AviatorTom]

From its founding, Social Security has always been a Ponzi scheme. Current workers are contributing to a fund so that the givernment can pay retirees. That's not illegal if the government is doing it.

[AviatorTom]

Thanks for the mho

[abc3643]

Of course not.
Social Security isn't a Ponzi scheme.
A Ponzi scheme involves deliberate deception and requires new investor numbers to increase at an exponential (aka "geometric") rate.
Social Security is transparent and, like pretty much everything, what is spent on now is paid for in the long run. [*] Furthermore, it doesn't require more and more investors; it only requires replacement investors.

======
Charles Ponzi was a Boston investment broker who in 1920 developed an investment plan offering bonds which would pay 50 percent interest in 45 days and 100 percent if held for 90 days. Although the initial clients’ money was invested in foreign postal coupons, as promised, the returns on the investment were miniscule compared to the promised return. To make good on his promise, Mr. Ponzi paid his initial investors with funds raised from his second round of clients, rather than investing these funds. As word spread about the unbelievable return on investment, clients flocked to Mr. Ponzi and he continued to use new clients’ money to pay off existing clients. The investment scheme’s “assets” were completely phantom – there were no investments made.

The problem with this type of scheme is that the number of new investors has to increase geometrically to pay old investors. In other words, to pay a 100 percent profit to the first 1,000 clients within 90 days, 1,000 new investors are needed within 90 days; then, 4,000 new investors are needed to pay the original 1,000 clients plus the 1,000 used in the first round of payouts. To pay these 4,000, you need 8,000 new investors, then 16,000. The scheme collapses when there are not enough new investors to pay the existing ones – the number of new investors is eventually exhausted, and the scheme becomes unsustainable. Mr. Ponzi’s scheme lasted barely 200 days.

A more recent example of a Ponzi scheme is that of former stock broker and investment advisor Bernie Madoff. His Ponzi scheme, considered the largest financial fraud in U. S. history, defrauded thousands of investors of billions of dollars.

Why Social Security is not a Ponzi Scheme

Social Security is a pay-as-you-go system. Current contributors pay for current beneficiaries. It transfers income from the current generation of workers to the current generation of retirees, with the promise that there will be another generation of workers to pay for the current generation of workers’ retirement. It does not require a doubling of participants every time a payment is made to a current beneficiary or a geometric increase in the number of participants. In its essence, Social Security is a contract between generations, binding together the interests of both young and old in a system that provides protection to all.

Unlike a fraudulent secretive Ponzi scheme, Social Security’s finances are transparent to the public, as required by law. Each year Social Security’s actuaries release a detailed report on the system’s finances. Its dedicated funding source – Federal Insurance Contributions Act (FICA) payroll taxes of current workers – are used to pay benefits for current beneficiaries. For years, these taxes more than covered the cost of the benefits, with the surplus (currently, $2.9 trillion) invested in U. S. Treasury securities, widely considered by finance industry professionals and foreign governments as the world’s best and safest investment. The U. S. government has never defaulted on its Treasury security obligations.


(more)

[abc3643]

===========
[*] Here's another example...

I pay taxes for both Social Security and public education.
Taxes paid for Social Security help keep retirees and later me alive while taxes paid for public education is an investment.
Then when I retire, the next generation does the same. The money I laid out for their education is partly paid back to me through Social Security that they are paying for when they grow up...
... and of course that grown up next generation is paying for the education of the generation after them who will pay their Social Security.

So, what's the problem?

In principle, it's the population growth of seniors because they live longer. But the population overall increases and anyone who works pays into Social Security. That more-or-less compensates for that.
However, Social Security itself, as big as it is, is just not that big of a problem. For instance, when I was a kid, the age at which you could collect full SS was 65. But because people lived longer on average, the age has been moved to 67 for me. So, that reduces the number of people collecting SS and moves the average years retired back to normal.

Besides, what's the worst thing that can happen?
Defense spending is almost as much as SSI.
Reduce your defense spending and you can apply it to SSI if needed.
And, believe it or not, in your lifetime - and maybe mine - that might happen because the very nature of defense is beginning to move away from expensive "platforms" (tanks, ships, planes, missiles, artillery) toward other "defense/weapons systems" like cyber tools which are much less expensive. After all, if you can take out an enemy's electrical system by using software bugs instead of flying a billion dollars worth of planes and bombs killing people to do the same thing, you save a lot of money and lives.

[DWornock]

By any definition, social security is a Ponzi scheme. Social Security taxes don't go into the the person's account, instead they are used to pay someone else. And, the treasuries issued for the money borrowed from social security are IOUs backed by nothing. And, absolutely social security is deliberate deception because the government leads most people to believe the social security taxes is invested in their accounts. Like all Ponzi schemes social security will eventually fail because it is impossible to pay the promises so whether it fails outright or by paying less than promised, it will fail.

[abc3643]

@DWornock
No, it's not. Because a Ponzi scheme requires an exponential increase in investors to keep it going. Furthermore, the investors are lied to so that they invest in it.

Social Security does not require an exponential increase in investors to keep it going. It just needs replacement investors - the next generation - to keep it going. Furthermore, Social Security, by law, is required to have "open books" meaning anyone can look at the financials of the system; there is nothing hidden to anyone and it is completely out in the open. Furthermore, unlike a Ponzi Scheme, the Social Security system is backed by the United States Treasury - the safest investment on Earth because it always pays back and has never defaulted. This is why the US Dollar is the unofficial gold standard currency on Earth.

[abc3643]

Here you go...
SSA's financials for FY2021.
https://www.ssa.gov/finance/

[DWornock]

@abc3643 Poison Ivy by any other name still itches just as much. If you want to call the social security Ponzi scheme something other then a Ponzi scheme, that is your right, but the promises (lies) to the American public cannot be kept.

[abc3643]

@DWornock No it's not. It's fine. And it's been working fine for 90 years.

[DWornock]

@abc3643 Social security has survived so far but Social Security’s $43 trillion unfunded liability, up $9 trillion from last year will never be paid. Assuming there are 100 million people paying social security taxes, each person would be obligated to pay $430,000 during their remaining working years. That is not possible. Therefore, the social security Ponzi scheme will fail.

[abc3643]

@DWornock It's not a Ponzi scheme for the reasons I --- and the people who define what a Ponzi scheme is - have stated.

Maybe this will help...
I have a subscription to The Wall Street Journal.
It is certainly no friend of the left.
But, it is an excellent (but expensive) newspaper and one reason is for its no-nonsense and explanatory coverage - the kind of thing investors and other business people want to know.

I am gifting this 2011 Wall Street Journal article to you so it is not behind a paywall and you can read it.
This article gives a straight-up description of Ponzi schemes and Social Security (and it's being in trouble).

Since this is a gifted article, you are welcome to bookmark or otherwise save the URL and share it with anyone. Education that helps make people better citizens and informed voters shouldn't be behind a paywall.

========

Is Social Security a Ponzi Scheme?
By Laura Meckler
Sept. 8, 2011 3:38 pm ET

www.wsj.com/.../BL-WB-31215

[abc3643]

I hate how G@G truncates URLs, so I am going to repaste the URL in pieces so you can see it completely.

https://
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wsj.
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articles
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BL-WB-31215
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desktopwebshare_permalink

[abc3643]

I've said all that I need to say on this subject and am now muting the question.

[love_conquers_lust]

The government makes adjustments to payment schedules as they inflate the money supply and account for core inflation.

However, with decreasing population, there will be fewer taxpayers to boon it. Increased wages for the younger generations per capita will help offset it, but on the whole, because the affluent are so fucking stingy with their money and wages likely won’t proportionally increase to COMPLETELY offset the decrease in tax bayer base, it’s likely it won’t be enough. The payments going towards retirees will be reduced because there are so many of them and so few children to support it until the world equilibrates or starts growing again.

Do not conflate Social Security with a Ponzi scheme. We’re talking about people, your grandparents, your relatives, and one day, YOURSELF. This isn’t some hypothetical investment into a market that doesn’t exist, which is what Ponzi schemes are notorious for, they’re white collar scams. People exist, whether you know them or not.

It’s a good question and parallels do exist, but a closer look at the data shows they are in fact not the same.

[loveslongnails]

No, because Social Security is a ponzi scheme that works, and is designed to benefit people, not rip them off. By the way, you can choose to opt out of Social Security and Disability Benefits by becoming an ordained minister, or getting a religious exemption. You can then start your own retirement program based on investments.

[Anonymous]

I just put in for applying for it. And after paying into it all my working life, there had better be something in that so-called "trust fund", or else they need to force the "rich" to cough-up the remainder of what's needed to properly pay people like me

[KelleyNice]

Social Security currently has a $2.6 trillion surplus which has been building up since the 1983. However, congress borrowed it, spent it, and replaced it with no real value IOUs that the Social Security Trust Fund cannot spend. And, other than the printing press, there is no money for the IOU's. If congress hadn't borrowed (in effect stolen) the $2.6 trillion there would be money until 2035. However, with only worthless IOU's the Social Security trust fund is broke. At least for a few more years, Congress will borrow from the Federal Reserve to make Social Security payments but in 2020 the deficit was a little over $3 trillion and in 2021 just under $3 trillion. All that borrowing and printing money has resulted in high inflation as I am sure you have noticed during the last 6 months. That is going to force higher interest rates on the $30 trillion and growing national debt which means the $3 trillion annual deficit the last two year will soon be $6 trillion annually. By the time you retire Social Security will not feed you; let alone pay for housing and clothing. Don't expect the rich to pay. The rich people bribe congress with $billions in campaign contributions. However you and most Americans will not pony up an average of $10. Congress will not bite the hand that feeds them.

[Opinion Owner]

And your age is only 13? That's pretty amazing

[KelleyNice]

I Google and I watch YouTube video so I am saying anything that is not on the internet. Most young students my age should just as smart and they would be if they were educated like they were over 100 years ago. Look at the following exam from 1885. If they made it to the 8th grade, that is the education students my age had when the purpose of schools was to teach and, not indoctrinate like public do today? www.grc.nasa.gov/.../1895_Eightgr_test.htm

[KelleyNice]

*like public schools do today.

[Opinion Owner]

Sounds like you've got a pretty good head on your shoulders

[RolandCuthbert]

Well, since you want to get rid of social security, are you going to pay me back a couple of million?

[KelleyNice]

At your age, it is possible that you may receive social security for a few years. However, if you have children, they will never collect or else they will collect a pittance.

[RolandCuthbert]

I don't have any kids. If you plan to cut my benefits then pay me my money. And we can part ways.

[KelleyNice]

What money. If you are talking about money paid into social security. • Social Security is not a savings plan. What you pay into the system does not go into an account for your retirement. Workers in each generation finance Social Security payments for their retired elders and you hope that down the road your benefits will be paid by younger workers. However, there are problems. Officially, Social Security currently has a $2.6 trillion surplus which has been building up since the 1983. However, the money is not there because congress borrowed that $2.6 trillion and gave the Social Security Trust Fund IOU's. IOU's backed by nothing but promises because congress doesn't have the money. Currently, 2020 and 2021, the deficits are $3 trillion annually. And, the current national debt is $30 trillion. With inflation taking off, as soon as interest rate increase, and they will, the deficits will double. By the time you collect Social Security any money they pay you will not even feed you even if you buy dog food. Maybe you can buy beans but you still have to have a place to live and there will not be money left over pay rent; let alone rent plus utilities.

[RolandCuthbert]

So you mean the money I paid does not exist? That is nonsense. The government doesn’t get to tax me without providing me services. If you are going to cut my benefits then pay up. Then we can stop dealing with each other.

[KelleyNice]

Congress spent your money and it was never yours anyway. You money pays people that have already retired and you hope that when you retire there will be plenty of young to pay you. The problem is in 1945 there was 42 workers for every retiree. In 2000 there were 3.4. In 2013 there were 2.9. In 2033 there will be 2 workers for every retiree. And with birth rates dropping, by the time you retire, there may be only 1 worker for every retiree. How much of that young person's salary do you believe you should receive?

[RolandCuthbert]

@kelleynice Then Congress owes me a check. And it was my money. It was taken from me, with promise that I would receive benefits once I came of age. And no one is going to steal my money then make up some legal nonsense as to why they get to keep it.

I am quite certain that hundreds of millions of Americans will feel the same way.

[KelleyNice]

It doesn't matter because congress doesn't have the money, they already spent it. All they can do to pay you is to tax young people enough to pay social security. However, when you retire, if there are 100 million retirees and 100 million younger people working, what can congress do? The average salary is $53,000 and after state and federal income taxes he brings home $45,000. The average social security payment is $20,000. Therefore, to pay you he is going to have to pay almost half his take home pay into a system he knows is broke. He is not going to willingly give you almost half of his take home pay.

Believing congress is going to give you your money is like believe a homeless person is going to pay you the $20,000 you lent him. Just like congress, he doesn't have it; he spent it when you lent it to him. Your only hope is that more children will be born. However, with 50% divorce rates, more men are refusing to marry because they know the laws and family courts will take their money if the woman divorces them. The other thing congress can do is raise the retirement age to 72. Either way, you will receive less than promised.

[RolandCuthbert]

Congress got trillions for banks and for oil companies. So I know they have my money.

Besides this so all neither here nor there. If you think have the votes to steal my money along with the hard earned dollars of hundreds of millions of Americans, I will see you at the polls. And when we win. Maybe we will think of some rights we can take away from you and you group. You know. Just so you can get familiar with how that feels.

[KelleyNice]

You had to pay twice. First when they bailed out the banks, then when all that money increased the money supply making your money less. If voting made a difference, they would outlaw it; besides they have the Diebold’s electronic voting machines they can program for whatever results they want.

Even if you can make voting legitimate, you can't get all your money because you can't outvote me because they only money you can get will be money you take from me. And, there will still be a few more of me than their is of you. And, I will tell you what I will say. You are the foolish one to trust those politicians, It wasn't my fault because I wasn't here. So don't expect me to pay for you foolishness.

[Whatever2929292]

They should and a LOT more too! But nothing ever happens unless you're a Republican that has also never done anything wrong.

I mean the corrupt establishment Republican's and the RINOS. They get away with it though

[Adaeva]

Yes congress critters should be subject to the laws they pass that apply to the citizens. In fact, they should have the maximum jail time because they use violence to force people to participate.

[Guy13]

Out of my pay grade…. Law School and court clerk or politician for you, right?

[SixFootSexy]

Social security has already failed, but it will collapse between now and 2030.

[Mangospacho]

At this point, it is just a surtax on your income tax. Plan ahead and get a private retirement account when you’re able.

[WindAtMyBack]

It's not a Ponzi scheme.

"What year will the social security scheme fail?'
Never, not in the foreseeable future anyway.

[normalice]

This is a collection of charicatures to equate two things that are not equal. A mich easier graph o make would be comparing a ponzi scheme to the stock market or crypto currency.

[007kingifrit]

that's funny. yea it's gana go bankrupt soon anyways they're basically stealing my money with the promise of giving it back to me

[RuthlessAggression]

Yeah

But when hasn't congress and the president been corrupt

[IsoUser]

I personally cannot think of one Publicly appointed official that shouldn't be indicted personally.

[Anonymous]

Liberals will claim social security isn't a Ponzi scheme because they get paid out by it

[EnglishEuropean]

Lady, the whole economy is a Ponzi scheme.

[Anonymous]

Not even wrong.

This is complete jibberish.

[Jay3344]

Lol, clever question

[Anonymous]

What are you smoking?

[QuietRunner]

yes i think so