Social Security is a Ponzi scheme . . . But.

It is claimed by President Obama and many others that Social Security retirements benefits must be on the cutting table during negotiations over raising the national debt limit. It may happen, and then we will see which party does the better job of  playing the blame game.

According to this article,

Entitlement reform really won’t take off in earnest until the political class and the American public recognize nobody is “entitled” to the benefits all of us thought we’d been paying for all these years, any more than victims of Ponzi schemes are “entitled” to the earnings promised by the scammers. For Medicare, Social Security and other entitlement programs are Ponzi schemes in their own right — and it’s not as if Americans weren’t warned decades ago.

I disagree.  True, voluntary Ponzi scheme participants don’t deserve much consideration.  They should have known that the promised high returns were illusory and dependent on luring new suckers to invest so that some of the new investments could be paid out, as long as they came in,  to earlier investors.  In many cases, they might even be considered to have been greedy.

However, most Ponzi schemes, unlike Social Security, have not been been backed by the United States Government;  investments in other Ponzi schemes have not been siphoned off and spent for general government use; nor has participation in other Ponzi schemes been required by the United States Government.  Don’t want to make your Social Security “contribution?” Tough, sucker!  In most cases, the “contributions” are deducted, involuntarily, each payday. In other cases, Pay up or we’ll git ya.

During much of my working life, I “contributed” the annual Social Security maximum. As a partner in a law firm, I had no employer and hence “contributed” both employer’s and employee’s shares — the whole enchilada.  We also had employees,  lawyers (associates), paralegals and others. I had to “contribute” my proportionate share of the firm’s “contributions.”  Without Social Security, I would have been substantially better able to save for retirement.

The compulsory nature of Social Security “contributions” and the purposes for which they were spent — without so much as a “by your leave, Contributor” or even a “thanks a heap, Sucker,”  are important differences.  The Social Security “Trust Fund” has for years been a giant pig slop for our government to feed at to satisfy the political/ideological needs of our masters public servants. No need to become unpopular by raising taxes; we have the big pig slop.

These factors should put Social Security retirement “entitlements” in a category quite unlike most Ponzi schemes and, indeed, unlike most “entitlements” for which the beneficiaries were not required by the Federal Government to “contribute” and then watch as their (non-existent) “contributions” were frittered away in whatever ways the party in power saw fit.

About danmillerinpanama

I was graduated from Yale University in 1963 with a B.A. in economics and from the University of Virginia School of law, where I was the notes editor of the Virginia Law Review in 1966. Following four years of active duty with the Army JAG Corps, with two tours in Korea, I entered private practice in Washington, D.C. specializing in communications law. I retired in 1996 to sail with my wife, Jeanie, on our sailboat Namaste to and in the Caribbean. In 2002, we settled in the Republic of Panama and live in a very rural area up in the mountains. I have contributed to Pajamas Media and Pajamas Tatler. In addition to my own blog, Dan Miller in Panama, I an an editor of Warsclerotic and contribute to China Daily Mail when I have something to write about North Korea.
This entry was posted in Abuse of Power, Ponzi schemes, Social Security. Bookmark the permalink.

4 Responses to Social Security is a Ponzi scheme . . . But.

  1. Pingback: Opinion Forum » President Obama Is Incompetent and the Unicorns He Rode In on Are Devious

  2. Pingback: President Obama is Incompetent and the Unicorns he rode in on are Devious. | danmillerinpanama

  3. Pingback: Opinion Forum » How Do You Solve a Problem like the National Debt?

  4. Pingback: Opinion Forum » Social Security Is a Ponzi Scheme … But

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