Ponzi Scheme

[flyguy]

The author of a financial news letter I subscribe to referred to the US Social Security program as being a Ponzi Scheme.

While fully understanding what he was saying, I did sent him this in reply:

Having just retired a few years ago I am partaking of the largess of the Social Security System, and I have understood what you refer to as a ponzi scheme for quite a few years before retiring. Your description is quite accurate but...

Your characterization of those receiving benefits as being criminal (I think that is what "participating in the crime" means) is more that a bit on the harsh side. And actually not legally true.

My logic goes like this: If someone robs a bank and kidnaps you, holding you in a room, and says to you, "I am going pay rent on this room with money from the robbery and feed you with food bought with money from the bank robbery and if you don't like that you can starve to death. Now since you are old I know this doctor who will provide medical service to you without asking questions. I will pay him with money from the bank robbery. Otherwise when you get sick you can just die from some normally easy to cure medical problem. The choice is yours."

So you are kept there for years and eat the food and the doctor helps you when you need it. Do you think there is a judge or jury in the land that would say that you had participated in the/a crime?

I know you will be able to find some way of calling a spade a spade on this, even if it is a hoe, but I would wager 99 people of 100 would agree with the above made point. But of course you could say that the 99 are just typically dumb. Reminds me of a movie title, "Dogma." Chuckle.

Ok, I have amused myself for a while.

I really enjoy reading your newsletter, always informative, interesting, and fun to read, but like anything else...

Have a good one.

DC

[Larry Lyons]

Re: Ponzi Scheme

The only thing I think you left out was to remind this clown that a portion of that money robbed was your yours, put there by you! And not put there by choice either. L

[flyguy]

Re: Ponzi Scheme

Actually one subscriber had previously climbed all over him in a one-page complaint about exactly that, to which he had written a long explanation. I just hit him on one little part of that explanation that I thought was over the edge and exaggerated/inaccurate.

The guy is a really clever dude in his field and made a fortune for many people out there during the crash. He also kept a lot of people from loosing everything, but he is not one to mince words. I pay attention to what he reports and predicts, but every once in a while I have to put my logical fire extinguisher to work.
DC

[jim cooper]

Re: Ponzi Scheme

Interesting "fellow"! Just how did he make some people money during "The Crash"? By selling short? And.....if social security is a "Ponzi Scheme", then what is every insurance company in the U.S. Are not they also "Ponzi Schemes?" Maybe he DOES mince words! (Alot of Wall Street made BIG money off their investors from 2005-to2009 by betting against their own customers! In other words selling them short! One guy Paulson made billions. Many of them sold investments they knew to be fraudulent and then secretly bet that the investment would FAIL! So far, very few have been brought to trial. None of the big boys like Goldman Sacks, etc.) JC

[flyguy]

Re: Ponzi Scheme

I don't want to get into some dogmatic knock down drag out on this, but if we could keep this discussion civil I am willing to describe further the comparison he was making.
By Ponzi he was referring to the fact that the earlier "investors" are paid off from the funds submitted by later investors, who may wind up getting nothing. That is the definition of a Ponzi scheme, and that is, in fact, what is happening with social security. Of course he knows, and I know, and I would like to think that you know, that had those funds been invested instead of being dumped in the general fund and squandered, Social Security would have money coming out of it's figurative ears today.

I have no intention of trying to morally support or make legitimate his judgements or statements, I only read and consider his research. But, if you know what a investment news letter is you would realize that he is just a researcher and writer, not a broker. In fact, reading his reports would show that he is at least as critical of the crooks on wall street as your are, perhaps more so. He lives and writes in Florida.

By the way, "mincing words" contains no evaluation on whether the words delivered are true on not, it only refers to the way those words are delivered.
Darryl

[Hank Jarrett]

Re: Ponzi Scheme

Man, am I glad we have a "Rants & Raves" section. Lots of really good, and lots of really silly comments. If you particularly like or dislike any particular view you can read or ignore them!
I find it too entertaining not to read them all.


Freedom of speech is easy when you agree with what is being said. The true test is when you will defend the right of someone to say what you don't want to hear.
Hank

[jim cooper]

Re: Ponzi Scheme

social security IS an insurance plan run by "The Govmint"! And.. YES it DID have its money stolen by congress! Even as it is, SS will be solvent for many more years. AIG is an INSURANCE company also and due to deregulation they went broke due to lack of " govmint"oversight and who paid for it? We did! The Taxpayer. Insurance companys run EXACTLY like Social Security except they then wander into all sorts of other private investments where they don't belong, with YOUR money. IE: AIG. I single out AIG as they were VERY large and extremely GREEDY! IF we had not bailed them out, they would have paid no one! They ALL operate as a ponzi scheme. Even more frightning is thinking about Bush 2's plan to privitize social security! That would have worked out well in 2009 wouldn't it? JC