O Tempora!: Are Social Security and Medicare Ponzi Schemes?

Sunday, January 04, 2009

Are Social Security and Medicare Ponzi Schemes?

Chuck Asay’s recent cartoon implying that Social Security and Medicare are Ponzi schemes is an insult! How dare Asay besmirch the merely bad name of Ponzi by associating it with the truly monstrous pyramid schemes of FDR, LBJ and LBJ’s heir George W. Bush!

Ponzi was an honest swindler, and today’s Madoff is the same. These men merely lied and cheated to rip off unsuspecting investors. But they couldn’t force anybody into their trick plans the way our utterly corrupt political system can. And Ponzi accounting practices just cannot compare to the sham accounting of these government programs.

Here are some facts about these programs:

When Social Security began, there were 17 workers per retiree. Now, there are about 2.5, and the number of workers to retiree is still declining.
The original retirement age was set at 65, which was quite cynical, given that 1935’s life expectancy was 65.
More and more workers have been forced into the Social Security program. For example, certain Missouri public school employees are scheduled to be switched from their much better retirement system to Social Security. A pyramid scheme always needs more participants.
Medicare’s unfunded liability as of 2006 was $70 trillion in 2006; Social Security’s about $16 trillion. Taxes will go up and/or benefits will be reduced to sustain these con games.
As our benevolent government robs Peter to pay Paul, part of Paul’s money for Social Security and Medicare is actually being spent on other things. But not to worry, Paul, because the government leaves an IOU to itself for every dollar it diverts.
There are 65 million or so Baby Boomers. If, like me, you are one of these folks, be afraid, be very afraid, for you may not get what was promised. If you are younger, be afraid, be very afraid, for the Baby Boomers might get what was promised and you will have to pay for it.

Pyramid swindles? Definitely. But don’t call them Ponzi schemes. They are much worse than that.

Labels: pyramid scheme, social security