Is Social Security really a Ponzi scheme?

[tvc184]

The difference is, those private companies selling those insurance policies are required to have real assets to match their potential liabilities.

The SS system has no assets.

Of yeah, it has it's IOU's from the Federal government but when it comes time to pay off those trillions of dollars of IOU's with real dollars that money will have to come from somewhere.

They simply won't be able to tax the few workers that are left enough to support all the folks drawing SS and Medicare, and the perpetual underclass that lives on government subsidies and medicaid.

SS was not intended to have assets. It is not a for profit organization in the free enterprise system. It is merely a government run insurance just like Medicare.

I don't like it but it is not a Ponzi scheme

A Ponzi scheme depends on people voluntarily making an investment on the promise of a likely quick and high yield return. It similar to but not the same thing as a pyramid scheme. Both however take money from late investors in the scheme to pay off early investors, particularly the originator(s). The main difference is that the pyramid requires you to go recruit other members (suckers). Both are similar con jobs enticing people to a quick return on their investment and either are really intended for long term growth. The scheme if for the originator and early investors take the money and run. That is hardly the case in SS. Who are the early investors in SS that set up the system and took the money and ran?

I don't like SS system but it is not a theft scheme as is a Ponzi or pyramid. It is a mandatory insurance system and like most insurance, you are guaranteed nothing until you breech a requirement for the return whether it be your car fixed due to an accident for auto insurance, for doctor bills paid from a sickness or injury for medical insurance or retirement age or death of a parent for SS.

The idea of it being a Ponzi scheme makes for an interesting political debate or rant but it is simply not true. I liked Bush's idea of privatizing it like a true personal retirement account if we are going to have to pay into it and can take "our" money out on retirement but until a majority of the people want that, it won't happen. Until then we will have to keep paying into the SS and Medicare government run insurance plans, not Ponzi schemes.

[QuackAddict]

Yes it is. I would like all the money I've put into SS with appropriate interest cut to me in a check from the treasury; I'll invest it the way I see fit and take my chances. That's not possible, however, because there is no "SS account" with my specific name on it. It's money taken in the front door that leaves the back door as soon as its collected.

For you that wanna split hairs and not define it as a "true ponzi" scheme because those are voluntary, I'll just call SS a compulsory ponzi scheme.

[Thumper]

The problem with SS is the thieves. SS was set up at first so the money could not be used for anything else. Then the politicians saw all that money piling up and could not stand it. They robbed the money from SS with the promise that the system would not be hurt. Well, they were either wrong or lied. If SS money had not been taken out and spent on other things that system would have more money than they would know what to do with. It would be the best public retirement system in the world. I could go on and on but it would do no good. Bisch

x12

LBJ took the lid of the cookie jar and every politician under the sun has had their hand out wanting more cookies. They trade'em for votes.

But I'm glad Perry is talking about cutting SS benefits for those who paid into SS, he just got himself un-elected.

[tvc184]

True or False - The money paid out in Social Security benefits today is coming from folks who are paying into Social Security today and not from the money paid in by the current beneficiaries. Be honest now.


Thanks FDR..........you blooming idiot.

Obviously it is a paid in and paid out system. That is the way it was designed and the intent. That is not the definition of a Ponzi scheme.

If it was an investment like a free enterprise company then the people in 1935 would not have gotten any SS (which was the intent of the program during the Depression and people were starving) if they had to wait for some dividend returns years later.

It is not a not for profit insurance company with assets and investors making a profit. Comparing a private enterprise to a government run system doesn't make it an illegal scheme.

If someone doesn't like the term insurance (which is what it is) then call it welfare funded not from the general income tax but from a specific tax for a specific purpose.

Also you note that an insurance company is not going to write a policy that they know isn't going to be paid out 90% of the time but I wonder if you considered life insurance. That last time I looked at the stats, everyone will die.

[Tmag]

Yes it is. I would like all the money I've put into SS with appropriate interest cut to me in a check from the treasury; I'll invest it the way I see fit and take my chances. That's not possible, however, because there is no "SS account" with my specific name on it. It's money taken in the front door that leaves the back door as soon as its collected.

For you that wanna split hairs and not define it as a "true ponzi" scheme because those are voluntary, I'll just call SS a compulsory ponzi scheme.

Alas, someone I can agree with!

[Stros]

Yes, unless I can go get money tomorrow with intrest from the SS adm.

[Live2Hunt]

Is the YES bucket full or can I jump in...

[Texasredneck]

Federal government run by politicians that is a Ponzi scam right there. Just look at the salaries and benefits and perks they bestow upon themselves.

Kinda my same thoughts, if they would give up some of their benefits then some States might not be where they are. And as said earlier, if we stop sending Aid to other countrys and send it here first then things might be a little diffrent. Lots of Homeless and hungry people here in our own backyard, and yes I think its a scheme. jmo

[denowt]

Correct.

There is not way that SS is a Ponzi scheme. It is a tax to pay for insurance so that people to have at least some income at retirement, if the person is a child whose parent died, etc. It was put in place during the Great Depression era when many older Americans were too old to work and had lost everything, sometimes including their homes. There was no intent to scam anyone.

It is like paying several hundred dollars a month for health insurance and living to be 70 years old and then dying suddenly of a heart attack and be one of those guys that "was never sick a day in his life and never went to the doctor". That guy probably spent $100,000 over his lifetime in a money making organization and never got a dime out of it. It was his risk to take.

SS is nothing more than an insurance. There is no guarantee to get it back and if you live to full retirement age you are not guaranteed to be able to take out your "investment". You can only get your monthly stipend. You will not and cannot claim your money that you put into the system.

Yes it has been mismanaged, yes they didn't plan on the baby boom and having less workers per retiree, yes they stole money from it to pay for other government expenses and yes I wish I would get out of it even though I about due to retire in about 6 years. That doesn't make it a Ponzi scheme. It is an insurance that you are guaranteed nothing even if you reach retirement age except a monthly payment.

If SS is a Ponzi scheme then so is car insurance, health insurance and every other such program and those are money making enterprises where SS is not.

One MAJOR difference you left out, I am not FORCED to buy insurance.

Yes, unless I can go get money tomorrow with intrest from the SS adm.

I'd be satisfied with just my money back. I'd be happy to let them keep the interest.

[Ryno]

The ultimate "borrowing from Peter to pay Paul" problem. It is not solvent program and is going down the wrong road. Most of us will never see much if any SS benefit. Our money will be gone before we qualify to draw.

[sharkhunter]

Yes and it tics me off !!!!!!!!!!!

[Snakelover]

The difference between what the government is doing with social security and what Charles Ponzi did with investor money is that we don't have a choice about whether to participate. So to call social security a Ponzi scheme isn't really fair... to Charles Ponzi.

[tsu1998]

Yes! I don't plan on ever seeing a dime of what I've paid in. As an employer who has to match employees contributions it makes me more upset that some of them probably will not see it either.

[Artos]

Yes! I don't plan on ever seeing a dime of what I've paid in. As an employer who has to match employees contributions it makes me more upset that some of them probably will not see it either.

insanity...forced to put money into something none of us have any faith of seeing. I'm gonna ask my boss if i can give 52 weeks of iou's for my 2012 pay checks.

[RdRdrFan]

Obviously it is a paid in and paid out system. That is the way it was designed and the intent. That is not the definition of a Ponzi scheme.

If it was an investment like a free enterprise company then the people in 1935 would not have gotten any SS (which was the intent of the program during the Depression and people were starving) if they had to wait for some dividend returns years later.

It is not a not for profit insurance company with assets and investors making a profit. Comparing a private enterprise to a government run system doesn't make it an illegal scheme.

If someone doesn't like the term insurance (which is what it is) then call it welfare funded not from the general income tax but from a specific tax for a specific purpose.

Also you note that an insurance company is not going to write a policy that they know isn't going to be paid out 90% of the time but I wonder if you considered life insurance. That last time I looked at the stats, everyone will die.

Swing and a miss.

Insurance companies raise the rates on life insurance policies as folks get older. For instance, I know alot of folks who paid on big term life insurance policies for years. When they expired it was not cost effective to continue them so they stopped. Yes, those people will still die someday but they let their policy lapse. So I'll say it again, an insurance company isn't going to issue a policy that they know will be a loser 90% of the time. Just won't happen.