Saturday, September 17, 2011

What's the difference?....

Governor and presidential aspirant Rick Perry has taken some flak recently for referring to Social Security as a "Ponzi Scheme". While I'm not a Rick Perry fan by any stretch, I would have to say that he is not entirely incorrect on his assertion.

Charles Ponzi was a confidence man from the early 20th century. He bounced in and out of trouble and jail a few times before he hit upon a plan that involved convincing people to invest in purchasing postal coupons in one country and reselling them for a higher price in another country.

In actuality, Ponzi was paying off earlier investors with money he was collecting from current investors, and depending on future investors to keep his scheme alive.

Since the government decided to spend the money on so many unrelated items, Social Security has now fallen into the predicament. People who worked and "contributed" for years and are now receiving money from the Social Security system are doing so on the "contributions" of the current workers, who will have to depend on future "contributors" if and when they are receive any money.

So in that respect, Perry was correct in calling it a Ponzi scheme. The difference is that no one was forced to participate in Ponzi's scheme. He relied on deception to get people to join his program. The government relies on force. That's the main difference.

Shortly before his death in 1949, an unrepentant Charles Ponzi stated "Even if they never got anything for it, it was cheap at that price. Without malice aforethought I had given them the best show that was ever staged in their territory since the landing of the Pilgrims! It was easily worth fifteen million bucks to watch me put the thing over."

I wonder if we will ever get the government to admit that they are just putting on a show also.


Anonymous Phyllis Klosinski said...

Government will never admit to putting a show on for the taxpayer social security forced "contribution" nor for using the money collected by force for purposes other than that for which it was stolen. If Social security was established to be the " personal individual savings account" it was advertised to be when established, then we do not have a ponzi scheme, we have fraud since it was collected, used and raided for purposes other than that for which it was established. In either case we the individual have been taken for a ride which most of us probably did not enjoy much less receive any "security" from.

9:25 PM  

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