RockStarKevin

scary theorem

Social Security is a Ponzi scheme

Posted on October 31st, 2007 under facts and charts • RSS 2.0 feed • Leave a response, or trackback

5 Responses to “scary theorem”

1
thewife:
October 31st, 2007 at 6:58 am
I don’t think I’ve ever heard the term “Ponzi scheme”…thanks for adding one more word to my vocab.
2
peter:
October 31st, 2007 at 9:36 am
I am not sure that you can count a pay-as-you-go insurance system as a ponzi scheme, but there are definitely problems with this type of system including the idea that we will soon entering huge deficits trying to pay for the benefits promised to people.

However, I think that we as a society need to have a financial safety net for the poor and disenfranchised especially those in their later years who are unable to work enough to make ends meet. So we need to overall the SS system in such as way that those who most rely on it are still able to get the assistance they need.
3
rockstar:
October 31st, 2007 at 9:46 am
Who do you concider to be “disenfranchised?”

I can agree that a financial safety net for the poor is a good thing to do. And we do need to solve the problems that the current SS system present. I would like to find a way to help people without sending cash. Maybe there is another way to do it other than unaccountable cash, but I’m not sure on a good solution yet.

One question I think about is why do we assume that when people get old they don’t need to work anymore and should retire? I think I understand why FDR wanted to have older people retire so younger people can have jobs, but do we still need that assumption?
(this does not apply to those that can’t work for physical/mental reasons. society should help those people out at all costs).
4
peter:
October 31st, 2007 at 11:43 am
I would think that the disenfranchised would be those that have not benefited equally from our economic system. Those would include people who did not see regular cost of living increases of the decades of their employment, those that are unable to find a job with a sustainable wage, those that cannot work because of physical and mental disabilities, and those over the age of retirement (which can mean different things to different people.

Why would giving cash be a problem? In fact, I think that cash would be the most economically sound thing to do since it would not leave the government in charge of what is a permissible purchase and what is not. For instance, would the government pay for a retired person to visit relatives or would it only pay for food?

The main goal of SS was to provide the American society with a stable workforce that was protected from outright failure and destitution. This in turn severely lessens the potential for major social upheaval like what is happening in France right now. I think that while we have some major issues that need to be addressed with SS, the program as a whole has worked remarkedly well.

Side Note: I think one thing that would help to solve the cuurent solvency issues would be for those retirees with large pensions and/or retirement savings should opt out of receiving their SS payments (this is something that has started to catch-on, but the # of people doing this is pretty small).
5
Max:
August 2nd, 2008 at 10:39 pm
Interesting - because that is the same thing I found out last Thursday.