Is there a reason the government is so opposed to letting individuals control their own Social Security funds? I know there are a number of people out there who are, from a financial perspective, less than talented. I'm not proposing that we privatize Social Security (although I'm not opposed to the idea, either), and force everyone to decide what to do with their accounts. I would just like to have the option of controlling my own destiny, so to speak. I strongly believe I could beat the rate of return the government offers on Social Security investments. And if for some reason I can't match that rate, I'm willing to deal with those consequences.
I don't have any facts to back this up, but if I had to guess, I'd say the primary reason we aren't allowed to control the funds in our Social Security accounts is because those funds aren't really there. The money has been spent already, and all that's really sitting in our Social Security accounts is a big fat IOU. Does that thought scare anyone?
Showing posts with label social security. Show all posts
Showing posts with label social security. Show all posts
Monday, December 22, 2008
Saturday, December 20, 2008
The Great United States Ponzi Scheme
A lot has been made of the recent discovery of the $50 billion Ponzi Scheme allegedly perpetrated by one Mr. Bernard Madoff.
For those who may not know, a Ponzi scheme is an investment offering an unusually high rate of return. The scheme involves paying said return to its existing participants using money received from new participants rather than paying out actual earned income, as there is little or no underlying income to be had. The scheme is always destined to collapse once there aren't enough new participants to cover the returns owed to the existing participants. (Visit Wikipedia for a more detailed explanation.)
My question is this: we know that Ponzi Schemes are highly illegal due to its fraudulent nature. Does our Social Security system fall into this category? If so, shouldn't the perpetrators of this fraud be prosecuted? The Social Security scheme is far greater and affects more people than any other fraud in the history of the world. The $50 billion Madoff scheme pales by comparison. While Social Security isn't offering an especially high rate of return, the rate it is offering is certainly unsustainable. It's not okay that the system has not yet collapsed. It's still a fraud, and the likelihood of an eventual collapse is 100%.
For those who may not know, a Ponzi scheme is an investment offering an unusually high rate of return. The scheme involves paying said return to its existing participants using money received from new participants rather than paying out actual earned income, as there is little or no underlying income to be had. The scheme is always destined to collapse once there aren't enough new participants to cover the returns owed to the existing participants. (Visit Wikipedia for a more detailed explanation.)
My question is this: we know that Ponzi Schemes are highly illegal due to its fraudulent nature. Does our Social Security system fall into this category? If so, shouldn't the perpetrators of this fraud be prosecuted? The Social Security scheme is far greater and affects more people than any other fraud in the history of the world. The $50 billion Madoff scheme pales by comparison. While Social Security isn't offering an especially high rate of return, the rate it is offering is certainly unsustainable. It's not okay that the system has not yet collapsed. It's still a fraud, and the likelihood of an eventual collapse is 100%.
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