Wednesday, December 17, 2008

Social Security Is A Bigger Ponzi Scheme

Bernard Madoff is credited with putting together one of the biggest Ponzi schemes. He was arrested after he admitted to squandering $50 billion of investor money.

A federal judge issued an order seeking the liquidation of Bernard L. Madoff Investment Securities LLC to protect investors duped by Madoff.

So let's get this straight. Madoff used money he received from new investors to pay off long time investors. As long as new money kept flowing in he was able to keep the scheme going.

Doesn't this scheme sound exactly like Social Security payments? Look at this article about Social Security. The Social Secuirity taxes we pay today fund current obligations to Social Security beneficiaries. It is not a tax that goes into a private account available to us when we retire. In other words the tax money the government receives from "current workers" is used to pay off benefits to "retired workers."

The governement is under no obligation to make sure Social Security is available when we retire although we paid into the system every day of our working lives.

And they arrested Madoff.

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