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April 9, 2014

Jonathan Tobin: Why Did Kerry Lie About Israeli Blame?

Samuel G. Freedman: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Jessica Ivins: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Kim Giles: Asking for help is not weakness

Kathy Kristof and Barbara Hoch Marcus: 7 Great Growth Israeli Stocks

Matthew Mientka: How Beans, Peas, And Chickpeas Cleanse Bad Cholesterol and Lowers Risk of Heart Disease

Sabrina Bachai: 5 At-Home Treatments For Headaches

The Kosher Gourmet by Daniel Neman Have yourself a matzo ball: The secrets bubby never told you and recipes she could have never imagined

April 8, 2014

Lori Nawyn: At Your Wit's End and Back: Finding Peace

Susan B. Garland and Rachel L. Sheedy: Strategies Married Couples Can Use to Boost Benefits

David Muhlbaum: Smart Tax Deductions Non-Itemizers Can Claim

Jill Weisenberger, M.S., R.D.N., C.D.E : Before You Lose Your Mental Edge

Dana Dovey: Coffee Drinkers Rejoice! Your Cup Of Joe Can Prevent Death From Liver Disease

Chris Weller: Electric 'Thinking Cap' Puts Your Brain Power Into High Gear

The Kosher Gourmet by Marlene Parrish A gift of hazelnuts keeps giving --- for a variety of nutty recipes: Entree, side, soup, dessert

April 4, 2014

Rabbi David Gutterman: The Word for Nothing Means Everything

Charles Krauthammer: Kerry's folly, Chapter 3

Amy Peterson: A life of love: How to build lasting relationships with your children

John Ericson: Older Women: Save Your Heart, Prevent Stroke Don't Drink Diet

John Ericson: Why 50 million Americans will still have spring allergies after taking meds

Cameron Huddleston: Best and Worst Buys of April 2014

Stacy Rapacon: Great Mutual Funds for Young Investors

Sarah Boesveld: Teacher keeps promise to mail thousands of former students letters written by their past selves

The Kosher Gourmet by Sharon Thompson Anyone can make a salad, you say. But can they make a great salad? (SECRETS, TESTED TECHNIQUES + 4 RECIPES, INCLUDING DRESSINGS)

April 2, 2014

Paul Greenberg: Death and joy in the spring

Dan Barry: Should South Carolina Jews be forced to maintain this chimney built by Germans serving the Nazis?

Mayra Bitsko: Save me! An alien took over my child's personality

Frank Clayton: Get happy: 20 scientifically proven happiness activities

Susan Scutti: It's Genetic! Obesity and the 'Carb Breakdown' Gene

Lecia Bushak: Why Hand Sanitizer May Actually Harm Your Health

Stacy Rapacon: Great Funds You Can Own for $500 or Less

Cameron Huddleston: 7 Ways to Save on Home Decor

The Kosher Gourmet by Steve Petusevsky Exploring ingredients as edible-stuffed containers (TWO RECIPES + TIPS & TECHINQUES)

Jewish World Review Feb. 4, 2009 / 10 Shevat 5769

The national Ponzi scheme

By Walter Williams


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http://www.JewishWorldReview.com | The U.S. Securities and Exchange Commission (SEC) was set up to combat fraudulent practices. The SEC's website explains that "Ponzi schemes are a type of illegal pyramid scheme named for Charles Ponzi, who duped thousands of New England residents into investing in a postage stamp speculation scheme back in the 1920s." It goes on to say, "Decades later, the Ponzi scheme continues to work on the 'rob-Peter-to-pay-Paul' principle, as money from new investors is used to pay off earlier investors until the whole scheme collapses." That is how the SEC described the recent Bernard Madoff $50 billion Ponzi scheme, "a stunning fraud that appears to be of epic proportions."


A Ponzi scheme does not generate any wealth whatsoever; that is why it ultimately collapses. As Circuit Judge Anderson said in the 1922 Lowell v. Brown case, the Ponzi scheme was "simply the old fraud of paying the earlier comers out of the contributions of the later comers." So long as the number of late comers — you might call them suckers — grows, the fraudulent scheme has life.


We have a national Ponzi scheme where Congress collects about $785 billion in Social Security taxes from about 163 million workers to send out $585 billion to 50 million Social Security recipients. Social Security's trustees tell us that the surplus goes into a $2.2 trillion trust fund to meet future obligations. The problem is whatever difference between Social Security taxes and benefits paid out is spent by Congress. What the Treasury Department does is give the Social Security Trust Fund non-marketable "special issue government securities" that are simply bookkeeping entries that are IOUs.


According to Social Security trustee estimates, around 2016 the amount of Social Security benefits paid will exceed taxes collected. That means one of two things, or both, must happen: Congress will raise taxes and/or slash promised Social Security benefits. Each year the situation will get worse since the number of retirees is predicted to increase relative to the number in the workforce paying taxes. In 1940, there were 42 workers per retiree, in 1950 there were 16, today there are 3 and in 20 or 30 years there will be 2 or fewer workers per retiree.


Social Security is unsustainable because it is not meeting the first order condition of a Ponzi scheme, namely expanding the pool of suckers. Social Security has been one congressional lie after another since its inception. Here's what a 1936 Social Security pamphlet said: "After the first 3 years — that is to say, beginning in 1940 — you will pay, and your employer will pay, 1.5 cents for each dollar you earn, up to $3,000 a year ... beginning in 1943, you will pay 2 cents, and so will your employer, for every dollar you earn for the next 3 years. ... And finally, beginning in 1949, twelve years from now, you and your employer will each pay 3 cents on each dollar you earn, up to $3,000 a year. That is the most you will ever pay." The pamphlet also said, "Beginning November 24, 1936, the United States government will set up a Social Security account for you. ... The checks will come to you as a right."


That's another lie. In .Flemming vs Nestor (1960), the U.S. Supreme court held that you have no "accrued property rights" to a Social Security check. That means Congress can do anything it wishes with Social Security. There is little or nothing that can be done to prevent the economic and political chaos that will result from the collapse of Social Security.


Today's recipients of Social Security, along with their powerful AARP lobby, represent a powerful political force. Few politicians are willing to risk their careers alienating today's senior citizens for the benefit of Americans in 2040. After all what do today's seniors and politicians care about a 2040 calamity? They will be dead by then.

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© 2006, Creators Syndicate.

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