The Ponzi Scheme

   Bernie Madoff sits in a prison cell for running a ponzi scheme which bilked people out of millions of dollars. He offered people easy money on investment, not by investing, but by rewarding early investors with the investments of newer investors. There was never any money actually made; just rearrangement of the deck chairs. It finally caught up with Madoff.


   The crazy thing is; our government is also running a ponzi scheme. Our "leaders", with our encouragement, keep running the scheme, and we keep reelecting them to do so. We know it as Social Security. Ideally, in a program like Social Security, investment into the program should be held to draw interest for a length of time before withdrawal, like a savings account. The problem is that our elected officials have raided those accounts to spend that money on pork barrel projects and social programs that we didn't have money for, and replaced it with IOU's.



   Logically, Social Security should be like the triangle above. There should be a very large base of contributors at the bottom and a small contingent of beneficiaries at the top. The base should be significantly sustained by the entry young workers into the workforce. The beneficiaries at the top should be significantly smaller due simply to natural causes of death.

   The problem we face is that the structure of Social Security now looks like the trapezoid above. Due to significant advances in modern medicine, Americans are living longer lives. The contingent of beneficiaries at the top has now grown significantly. Ideally, this shouldn't be a problem if our base of new workers entering the workforce is also growing by the same percentage, but it hasn't. One of the main reasons, in my opinion, is that 53 million potential American workers will never enter the workforce because they were murdered in the womb. Another reason is that our tax policies encourage American business to relocate its manufacturing overseas. You simply cannot increase the level of beneficiaries in the program while at the same time eliminating new workers coming into the system both physically and economically.

   If something isn't done about Social Security, it will eventually look like the square above. This collapses. No one will be willing to work to simply support a Social Security beneficiary. Who is willing to expend their time, labor, and life to have it all taken for the benefit of another? When Social Security collapses and everyone invested loses everything, who joins Bernie Madoff in his prison cell?


Godspeed.