Social Security is an income re-distribution program as well as a ponzi scheme.
http://www.ssa.gov/policy/docs/issuepapers/ip2009-01.html
” IS SOCIAL SECURITY A PONZI SCHEME ? “
On CNBC TV’s “Squawk Box” Rick Santelli asked guest host Thomas L. Friedman, New York Times foreign Affairs Columnist, and author of his new book “ That Used to be Us, “ the following question: “ Is Social Security a Ponzi Scheme ? “ Tom replied, “ Your question is idiotic ! “ Rick then replied: “ Your answer is idiotic! “
From Wikipedia:
A Ponzi scheme is a fraudulent investment operation that pays returns to separate investors, not from any actual profit earned by the organization, but from their own money or money paid by subsequent investors. The Ponzi scheme usually entices new investors by offering returns other investments cannot guarantee, in the form of short-term returns that are either abnormally high or unusually consistent. The perpetuation of the returns that a Ponzi scheme advertises and pays requires an ever-increasing flow of money from investors to keep the scheme going.
That might as well have been an entry for “Social Security System,” except for the short term part. But returns, at least for older Americans, have been far in excess of what they put IN to the system.
Recall some people sued Carter when he raised the retirement age in the 1970’s. Plaintiff argued that the gubmint had a contract with the people. Another myth. The Supremes ruled SS is a legislated entitlement and Congress is granted wide latitude to change it. In other words, Congress can spend all of SS money on a one month orgy on the DC mall and the only thing the American people can do is vote the bastards out of office. That is why SS is the worst “contract” to accept. At least a 401k is your money and the provider has contractual obligations to the original terms of the agreement and one can sue them if they violate the contractual terms. SS does not have this feature.
And a Ponzi Scheme is voluntary.
If you are smart and cautious, you can avoid them completely. Sosh security is enforced by the law, so no amount of planning can allow you to avoid getting scammed.
Sosh security is worse.
Social Secuirty Trustee admits it’s a Ponzi Scheme
http://www.youtube.com/watch?v=ITMEZImvNio
the SS Trustee also says that payroll taxes alone will have to be 30% in order to keep paying the current level of benefits.
“Writing yourself a check for $1,000,000 does not make you a millioniare”