Largest Ponzi Scam Ever Discovered!!

The system is destined to collapse just as a Ponzi Scheme would be.

I just don't see it happening particularly given the bailouts that have occurred since October '08. The drain on social services would be much costlier than any bailout of SS.

I'm more concerned about the ability of the big businesses that are allowed to retroactively trash retirement plans, and the fact that so few offer them anymore. Add in the fallacy of 401Ks being able to provide financial security when it's tied to something inherently insecure and I fear the real tragedy will be people not being able to retire at all. If I was a betting person, I'd start buying stock in Purina.

quote="tvb"]

billlindley wrote:\

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My apologies, Bill, that I mistakenly thought you had ulterior motives for your post. [/quote]

Quite alright TVB. I do jokingly refer to Obama as Jesus but that’s only due to how some feel he is the savior. I voted for our president and while I have some doubts over some of the things he has put into motion I don’t want him to fail just as I didn’t want any other president to fail.

ErikLaurence wrote:

billlindley wrote:

ErikLaurence wrote:It's not a ponzi scheme but it is operating completely outside of it's designed parameters.

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It is a little tongue and cheek that I call it a Ponzi Scheme but it is not very far off.

Ponzi Definition -
“A Ponzi scheme is a fraudulent investment operation that pays returns to investors from their own money or money paid by subsequent investors rather than from any actual profit earned. The Ponzi scheme usually offers returns that other investments cannot guarantee in order to entice new investors, 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 in order to keep the scheme going.
The system is destined to collapse because the earnings, if any, are less than the payments. 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.”

Now Social Security is a government run program that takes money from taxpayers with the intent to repay them in the form of retirement wages and benefits when they retire. Since SSI hasn’t really changed at all and people are living longer the government is actually taking money from you and I with a promise of something they can’t repay based on current trends and funding. The system is destined to collapse just as a Ponzi Scheme would be.

So the only way it becomes a ponzi scheme now is by killing it. The the early folks get paid but the late people are SOL.

If one can fix it by adjusting retirement ages or capping the length of time it continues to pay out then it goes from fraud to just a bad investment.

Erik,

I completely agree that if fixed it will be sustainable, I just question the fixes available.

Do you raise taxes? Already 12.4%. I am contributing 6% of my pay to an IRA so I am nearly putting 20% away 12.4% of which I may not see. I can;t afford to pay more of my income.

Do you raise caps on income limits to detemrine taxes? Tax people to $250,000 but deny them benefits that cover that $90,000 - $250,000 window?

Do you raise the age when you are allowed to draw? If everyone dies before they can draw this would certainly sure it up (JOke)

Do you look at a person’s overall income and deny them if they meet certain thresholds?

I don’t know the answer but it doesn’t seem like not enough is being done or is in the works right now.

awe ok il'l bite.......its obamas fault!! there

that pin they put in upsidedown on the space station is his fault also I bet.

Bill, let me try & explain about the ss surplus. The fund for the most part doesn`t exist, every penny collected goes into the general fund & the ss payments are taken out. There has always been more going in than going out, except that there is no real account that the extra goes into, its used up by the general fund. Where the shortfall will begin is when whats paid in is also going out or even more out. They always spent the excess & never even credited ss with an IOU. They have all done this its not a R or D idea, they can`t stand to see a $ that isn`t being spent.

samhill wrote:Bill, let me try & explain about the ss surplus. The fund for the most part doesn`t exist, every penny collected goes into the general fund & the ss payments are taken out. There has always been more going in than going out, except that there is no real account that the extra goes into, its used up by the general fund. Where the shortfall will begin is when whats paid in is also going out or even more out. They always spent the excess & never even credited ss with an IOU. They have all done this its not a R or D idea, they can`t stand to see a $ that isn`t being spent.

I know how it works and again I am not making it a party issue. I am simply asking what is the answer to fix the problem? Even the almighty USA has a limit to what it can spend in the future and as you even point out the money that should be there for future payments is there in the form of an IOU. How does the government pay those IOU's when countries like China are already growing tired of lending money to the USA so that we can expand our way life? China today has called for a new world currency to replace the US dollar. Now understandbly that notion would hurt China more then help in the short term but what if the US dolalr is surplanmted by the Euro or another form of world currency? Then it wouldn;t be as worth wild for coutnires to buy all of our debt, then we would have no money, then the US economy (and SSI with it) would really be brought to its knees....

Notice I didn't blame of refer to Dems or Reps or Rich or Poor or Black or White.....

samhill wrote:The only problem with ss is that they keep takeing out of it for the general fund & useing it for supporting illeagles & every Tom, Dick & Harry that never paid into it. Just like any cash cow, they can`t stand to have a surplus.

Most of the "illegals" in this country that are working are using forged social security numbers and have no hope of collecting any benefits.

beemerboy, all they have to do is to have a child born in the U.S. & they are on the highway to welfare & ss.

Bill, if I had the answer to your question I wouldn`t be sitting here now. I was just pointing out that I wouldn`t consider ss a ponzi scam, I don`t believe that ss was ever meant to help balance the budget if it would have been a seperate entity ther would be more than enough IMO. Looking at the Chinese new world currency bit, maybe then the U.S. wouldn`t be obligated to help all the world with their problems. Then perhaps we could rebuild our own country, produce things cheaper here, become an exporter rather than an importer theres always the chance to look at things another way. It`s the greatest country in the world, it didn`t start out as a world leader, let someone else take it for awhile & see how green it isn`t on the other side of the fence.

That's a new way to look at it. Thanks Sam, hadn't thought about the greener grass scenario.

I didn't say it was a way to balance the budget either. At the end of the day money is going into SSI out of my paycheck to pay current retirees or "disabled" Americans. They were promised a return and are currently getting their return. I am also promised a return but will probably not get anything, or I will be dead before I can collect.

The whole idea of America not meddling in others affairs could be true once the Dollar is worthless. We won't have the money to buy much of anything to do any meddling. Picture China airlifting rice into the US.

Not even sure how we got to that comment...... But I’ll bite.

70% of our economy is/was based on the consumer.
From talking with everyday people it seems of that 70%, 90% of that consumerism was done with credit.
If there is no credit left there is barley a US economy ( NO tax revenue from consumption).
If there is Barely a US economy there is no tax revenue.
If there is no tax revenue there is no SSI or interest payments.
If there are no interest payments the US dollar is worthless because we would essentially be in default of all that lending China and other countries made.
If the US dollar is worthless there are larger problems then retirement money.
If there are larger problems then retirement money then I guess we solved the SSI problem.


Thanks Sam!

I just love the way you look for the worst for this country. Lets just hope for the best.

samhill wrote:I just love the way you look for the worst for this country. Lets just hope for the best.

Sam,

I do truly hope for the best. My family and friends would consider me an optimist that throws in a little dose of truth from time to time. I hate to be negative but from the statistics and information available things are grim right now. I follow business very closely and I don't let politics or propaganda clouds my views. My views are my views. The way I see it and what the numbers tell me is that we are in a world of trouble. This economy is closer to the breaking point then many realize. Aside from the tongue and cheek notion of this post concerning SSI and the fact that it is a ponzi scheme the overall economy is very bleak.

When I have a client come into the office asking if she should get a home equity loan (yes she still has equity) to pay off credit cards I get concerned. When she tells me she still wouldn’t be able to get by without continuing to use the credit cards I get really concerned.

When I know 3 families that can’t afford day care without tapping their equity lines or using their credit cards I get concerned.

When I see how pathetic this generation leaving college and recently out of college produce I get concerned.

When I see moms at checkout counters crying because they are forced to use Access Cards (Updated Food Stamps) I get concerned.

When people are more worried about how big there sunglasses are or how much their jeans cost or who has the newest greatest cell phone or who has the best parents because they let them live at home still and pay no rent when they are 26 and 27 years old I get concerned.

This whole thing of ours, this great country, is currently just a group of immature consumers who don’t have a skill and couldn’t fix a toilet or a light bulb if someone was holding a gun to their head. Things are bad, very bad, on a simple level. Ask around and open your eyes to the fact that a family with 2 working adults and 2 children needs to make well over $100K a year just to get by without putting themselves into debt that they will never get out of.

I want to hope and I am optimistic things will get better. The educated side of me tells me they won’t. Hope is simultaneously our greatest strength and out greatest weakness.

The bottom line here as I see it is the whole economy has been based on pure greed for a long while now. People spent more than they earned for years, some where along the line the educational system failed them, to families have allowed themselves to drift apart & people have become so self centered they no longer care about their fellow men. We would be in the same shape no matter which man won the election but I do believe that J.M. is out of touch. Besides his age he never really held a real job, has had a silverspoon all his life. Had the misfortune of being shot down & captured bu it beats the alturnative. How many enlisted men were held POW? His father got him the academy & I think in his mind he left his father down, just my unlearned opinion. The last Bush was much the same & we are living with that mess now. All we can do is hang on for the ride & hope for the best. Believe in America.

samhill wrote:The bottom line here as I see it is the whole economy has been based on pure greed for a long while now. People spent more than they earned for years, some where along the line the educational system failed them, to families have allowed themselves to drift apart & people have become so self centered they no longer care about their fellow men. We would be in the same shape no matter which man won the election but I do believe that J.M. is out of touch. Besides his age he never really held a real job, has had a silverspoon all his life. Had the misfortune of being shot down & captured bu it beats the alturnative. How many enlisted men were held POW? His father got him the academy & I think in his mind he left his father down, just my unlearned opinion. The last Bush was much the same & we are living with that mess now. All we can do is hang on for the ride & hope for the best. Believe in America.

Wow....Lots of truth in that post Sam!!

The Social Security System is actuarially unsound and has been for thirty years or more. It collects 6.2% from both employee and employer for OASDI (old age, survivors and disability insurance). It collects 1.45% from both employee and employer for medicare insurance. The self-employed pay an effective rate of 12.9%. There is no social security trust fund that is actually funded. It doesn't really matter. Like everything else the government finances, it is subject to, and backed by, the full faith and credit of the United States Government.

It would therefore be prudent to consider what backs the US Govt: the economic engine of the United States, namely private US enterprise and the strength of the US dollar. Without a healthy capitalistic and productive environment, the security that society longs for is simply not possible. To date the US government has burdened the economic engine with a never before seen bounty of entitlements. Without much global competition in trade or finance, the bounty was sustainable. In a globally competitive environment and with a national government that works daily to suppress the benefits of entrepreneurship, the largesse of the government's "Great Society" is bound to collapse under its considerable weight.

In the last three decades, the US has manipulated the lifestyle of every American for the better using the dollar as a weapon worldwide. SSI has been sustained only as a result of that ability to borrow at will from abroad at negative rates.

If the US and its programs are to survive, the government must stimulate saving and investment and reduce the barriers to profitable production. The Obama administration (like the Bush administration) is blind to this requirement or, wants the system to collapse to gain total political control. The rate of inflation in the US according to the respected ShadowGovStats is considerably higher than the official rates. The current budget, stimulus and bailout plans will accelerate this rate to epic proportion. It is a continuing and unsustainable ploy to reduce our debts abroad while continuing to exercise global hegemony.

Today, the remarks of Tim Geithner sent a huge wave of uncertainty through the currency markets today when he indicated that the role of the US dollar as a reserve currency may be up for grabs. He later clarified his remarks calming the markets. The fact is, the role of the US dollar as a reserve currency is in jeopardy if the US cannot restart its economic engine. Should that fail to occur, the ability of the US to maintain the current economic lifestyle and programs for its citizens will flatly fail.