Sunday, March 15, 2009

Stick 'em up...

I don't think there's much doubt that Bernie Madoff is a crook. He swindled a lot of people out of a lot of money by convincing them he was investing it wisely, when actually he was running a Ponzi scheme where he took money from investors and paid off earlier investors, all the time depending on the hope that he would never run out of new and willing investors, and hoping that no one ever really looked behind the curtain to closely.

In a more violent version of theft, George Chestnut took a gun into a bank and demanded money. One crook used fraud, and one crook used force, and rightfully the government stepped in to try and put a stop to it.

That's what government should do. Protect its citizens from force and fraud, and when it doesn't manage to do that, it should provide a mechanism for retribution by the victims of force and fraud. It sure shouldn't be in the business of initiating force or fraud. Unfortunately, that's not always the case.

For the last 70 years, our government has operated the largest Ponzi scheme ever. Social Security depends on current workers to fund retirees benefits. What started as a $60.00 per year required maximum contribution to the fund has increased to today's maximum of $12,468.00.

And several years ago, the Supreme Court ruled that you have no legal claim to the money you have invested in Social Security. The amount of benefits you receive will be decided by Congress (which by the way, decided not to participate), and can be delayed, reduced or redirected at their whim.

There's a lot of talk about increasing contributions again, and delaying, reducing, and redirecting payments from Social Security, especially with the fund dwindling as it pays out more than it takes in.

And in a few years, if a majority of voters look behind the curtain, and decide they can no longer afford to contribute to the mostly imaginary fund, like in all Ponzi schemes, the last in will be left holding the bag.

Of course, the prudent thing to do would be for taxpayers to withdraw from the current system and save for their retirement in various ways that allow them to actually own their savings.

Unfortunately, unless you're one of a very select few, trying to do so will put you on the receiving end as our government switches from fraud to force.

And you're probably not going to like it.

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