Everyone has heard about Bernard Madoff by now. He's the guy who has allegedly run the largest and longest running Ponzi scheme ever. And now his investors, the SEC, and anyone else who wants to either cry because of their losses, or make out like they knew he was a gonif all along, are wondering what will happen now.
What is starting to get on my nerves is this latest "Light Bulb Going Off In the Head Proclamation" that many of the radio and TV pundits and their call-in guests are saying as if it's their original thought. It goes like this:
"Madoff hasn't perpetrated the world's biggest Ponzi scheme...there's one even bigger than that." And then the guy who makes the statement waits for the person he's addressing to say, "Oh? What would that be?"
And then when he does, the brain child responds as if what he's getting ready to say should make him Mensa material. "The biggest Ponzi scheme is Social Security system! Ha, ha, ha...."
Well, the Social Security formula doesn't begin to meet the definition of a Ponzi scheme.
To begin with, if the fund runs short, the federal government covers the shortfall. How? By raising taxes on those who are current and future participants. Since "government" is us, there is no third party.
Attorney 
Algonquin J. Calhoun would explain it this way, "You see, Kingfish, we, the people, is the Ponzeyes and we is also the Ponzees."
In contrast, Ponzi schemes have no way to balance the books because the guy who's "Ponzi" has no intention of covering his clients' losses, and every intent of convincing them that they are making a profit while they are contemporaneously losing their Palm Beach high rises and Harry Winston diamonds.
Copyright 2008 - William S. Cherry
BILL CHERRY, REALTORS
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Interesting take Bill...we is the Ponzis...love it! Well, not really. You know what I mean. - Jim
When do you think a politician...any politician will finally have the guts to say it like it is...social security is a contradiction in terms. There is nothing secure about social security...in fact, it is making our children very insecure...they know they are paying for our retirement. This conversation could lead to a multitude of topics, but then, we don't have all night!
A Ponzi scheme is one in which the newest investors pay off the earlier investors. And since our government has not set aside the funds put into the system by the earlier generations, that's exactly what is happening with Social Security. The next generation must pay for the current one. Since the liability is growing faster than the next generation will be able to bear (more old people living longer than expected, and smaller younger generation), Social Security is very much in danger of collapse. Next, watch the government cut back on the benefits and continue to raise the age at which you get paid. Gotta disagree with you on this one.
You can't Ponzi yourself just like you can't steal from yourself and you can't take your own money and double it by staring at it.
Government is us. It has no money of its own and no place to get money of any significance without taxes.
But in the main, most don't care to understand this. Instead, they believe government prints money without there being any cost to the citizens.
Social Security may go away in name, but benefits will continue to be paid forever. It'll just be reclassified as welfare for old people.
If you're under 50, cut this out and save it. You'll be able to look at it in 20 years and remember that some old bird told you so at the end of 2008.
Bill: I remember the Kingfish, and Algonquin J Calhoun. It seems like hundreds of years ago, but I remember listening to them, maybe even watching them (not sure). Hilarious. Social Security is NOT a Ponzi scheme. Funny, but I bet the person calling it that would be the same kind of person who a short time ago wanted each person to be able to put some of their Social Security money into the stock market. Another brilliant idea ! Yeah, right !
I must be getting old. I had to look it up. George "Kingfish" Stevens on the Amos 'n Andy show. And it was on both radio and television. And I remember the Kingfish's wife Sapphire, too. It was such a funny show... and extremely popular. Thanks for bringing it to mind. Take care...
hahaha, a bit before my time. I had to look it up too
Sorry Bill, but your definition of Ponzi is flawed, because the "third party" is the generation of Americans that pays in but does not get a benefit. And that generation has already been born.
You laugh, but it is my children and your grandchildren that are being victimized by this foolish scheme.
In contrast, SOCIAL SECURITY HAS no way to balance the books because the FEDERAL GOVERNMENT has no intention of covering TAXPAYER losses, and every intent of convincing them that they WILL MAKE A FUTURE profit while they are contemporaneously losing their ASSETS and PRODUCTIVITY SO POLITICIANS CAN BUY THEIR VOTES WITH THEIR OWN MONEY.
The federal government is George Washington, Martin Luther King, Bob Hope, your grandparents, you, me, our children, our grandchildren and all who follow while there is a U.S. It is not a "stand alone" person or third party that we must fight or that we must obey.
The federal government cannot do anything that we don't let it because it and we are one and the same. That is indisputable...it's empirical.
Social Security's problem stems from no longer requiring that contributions be set aside in escrow and if loaned, loaned at a current and competitive rate, etc. Instead it found itself in the general fund with government paying less for borrowing it than the rate(s) it paid arm's length lenders. That, too, is empirical.
We have the same problem in Texas. Voters were told that if they voted for the lottery, the money would go to our public schools. Well the inference was that it would be IN ADDITION to what was already being budgeted. But that's NOT what happened. The net income went into the general fund and that's where school expenses are paid from. So that part was true. Where the deception came into play was that the legislature budgeted that money as income to school fund, and never increased the amount that would be paid the schools over what had been budgeted to them before.
There is only one way to solve this stuff, and that's with the vote.
But as hard as you wish and want it not to be, the government will continue to support old people because 1) young people won't hire them to work and 2) don't want to support them themselves, 3) most certainly don't want them moving in with them, and that's because most of the old people will not have enough savings to support themselves.
But of course, we can always put grandma and grandpa on a block of ice and push them out to sea. That practice would last only until you were grandma and grandpa.
Bill: Watch out for the comment above me. It is a spam comment. I have seen perhaps ten of them tonight. Also... I suggest you NOT click on the link... since it is spam... and may lead to some virus or trojan horse. I suggest you DELETE the comment. Take care...