| Reasons for Leaving |
by Dale Robbins
| Copyright 2010 Dale Robbins |
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Volume 2, Issue 5
March 4, 2011
March 4, 2011
Who Created the Greatest Ponzi Scheme?
Who created the greatest Ponzi Scheme in U.S.
history? Was it FDR or Maddoff? The answer
depends on your definition of "Ponzi Scheme". Named
after a scam pulled off by Charles Ponzi in 1920, the
ingredients of such a scam include new money coming
in from new depositors to satisfy promises made to
earlier investors.
history? Was it FDR or Maddoff? The answer
depends on your definition of "Ponzi Scheme". Named
after a scam pulled off by Charles Ponzi in 1920, the
ingredients of such a scam include new money coming
in from new depositors to satisfy promises made to
earlier investors.
| They both have fuzzy eyebrows. |
According to their website the Social Security Administration admits:"There is a superficial
analogy... that in both money from later participants goes to pay the benefits of earlier
participants." They further state: "But that is where the similarity ends...Social Security is
and always has been either a "pay-as-you-go" system or one that was partially
advance-funded."
Social Security never promised an investment return for participants. Investment scams
do. And while Messrs. Maddoff and Ponzi needed an unsustainable geometric growth rate
of new investors to keep promises, Social Security relies on a relatively equal number of
depositors and dependants to stay afloat.
analogy... that in both money from later participants goes to pay the benefits of earlier
participants." They further state: "But that is where the similarity ends...Social Security is
and always has been either a "pay-as-you-go" system or one that was partially
advance-funded."
Social Security never promised an investment return for participants. Investment scams
do. And while Messrs. Maddoff and Ponzi needed an unsustainable geometric growth rate
of new investors to keep promises, Social Security relies on a relatively equal number of
depositors and dependants to stay afloat.
Is the Social Security system perfect? Certainly not. Aside
from slowing traffic in the fast lane, Baby Boomers are
testing the system like never before. There are more of
them retiring than the present work force can support. And
there is debate as to the extent of impact congress has had
on Social Security by dipping their hands into the piggy
bank. In order to continue on, benefits may decrease,
retirement age may increase, and the current workforce
may have to pay more.
from slowing traffic in the fast lane, Baby Boomers are
testing the system like never before. There are more of
them retiring than the present work force can support. And
there is debate as to the extent of impact congress has had
on Social Security by dipping their hands into the piggy
bank. In order to continue on, benefits may decrease,
retirement age may increase, and the current workforce
may have to pay more.
Like an Oprah diet, ultimately a scam like Ponzi's will fail. For Social Security to do so
there would have to be an absence of a workforce. Americans would have to stop having
children or the generation after us would have to stop working.
there would have to be an absence of a workforce. Americans would have to stop having
children or the generation after us would have to stop working.
"Let's go home and mess up social
security!"
security!"
