A Ponzi scheme is an investment operation that pays returns to its investors from their own money or the money paid by subsequent investors, rather than from any actual profit earned by the individual or organization running the operation.
Social Security is a social insurance program that is primarily funded through dedicated payroll taxes called Federal Insuarnce Contributions Act tax (FICA).
In 2010, Social Security total income was $781.1 billion and expenditures were $712.5 billion, which meant a total net increase in assets of $68.6 billion. Assets in 2010 were $2.6 trillion, an amount that is expected to be adequate to cover the next 10 years. In 2023, total income and interest earned on assets are projected to no longer cover expenditures for Social Security, as demographic shifts burden the system. By 2035, the ratio of potential retirees to working age persons will be 37 percent — there will be less than three potential income earners for every retiree in the population. The trust fund would then be exhausted by 2036.
3 comments:
The combination of growing retirees and declining work force share of population spells disaster for Social Security.
It might not be the case if the government were regularly running surpluses but that's obviously not the case.
The other sleight of hand that the government did that makes the whole thing seem more like a Ponzi scheme was to move Social Security, Medicare and Medicaid off the government books. Imagine General Motors taking liabilities and simply taking them off the balance sheet because they look troublesome? That sounds like something that an Enron might do, not a reputable company or the government.
Social Security sounds like a Ponzi Scheme to me. The Democrats and other liberal politicians assert that it's not because the shortfall will be picked up by other taxes levied by a merciful and loving government...so it won't collapse the way Charles Ponzi's scheme did.
They have a point. Technically they can tax us 100% of income to support Social Security and make us all wards of the State.
Look at what they said about Social Security, and its limits, when it started...
...then think about all the wonderful new things they are starting now.
Too bad Ron Paul is a nut (a Right Wingnut), it seems like only somebody like him and his zombie followers can fix this thing.
Post a Comment