Bernie Madoff & Social Security

Monday, December 27, 2010

Everyone believes that Bernie Madoff has been convicted of running the largest ponzi scheme in history and I would argue otherwise. 

A ponzi scheme by definition is a fraudulent investment operation that pays returns to separate investors from their own money or money paid by subsequent investors, rather than from any actual profit earned. The Ponzi scheme usually entices new investors by offering returns other investments cannot guarantee, in the form of short-term returns that are either abnormally high or unusually consistent. The perpetuation of the returns that a Ponzi scheme advertises and pays requires an ever-increasing flow of money from investors to keep the scheme going. The system is destined to collapse because the earnings, if any, are less than the payments to investors.

With that definition in mind I would like to ask, what is the difference between Bernie Madoff and social security? In my mind, NOTHING! Social security is a trust fund that requires new participants to contribute to the system in order for eligible citizens (which have already contributed) to receive their benefits. Hard working Americans are required to pay into a system that spends the money as fast as it comes in. In fact, on the front of your annual social security statement it clearly reads "In 2015 we will begin paying more in benefits than we collect in taxes. Without changes, in 2037 the Social Security Trust Fund will be able to pay only about 78 cents for each dollar of scheduled benefits.* We need to resolve these issues soon to make sure Social Security continues to provide a foundation of protection for future generations."

Not only is social security a ponzi scheme, it is one that the American people are REQUIRED to participate in. Are you aware of this? Who do you believe is worse now, Bernie Madoff or the Social Insecurity Trust Fund?

I would love hear your thoughts and ideas regarding this topic. Please feel free to comment below.

Posted in Retirement , Social Security | Make a Comment (4)

1. Grant Young on January 4, 2011 @ 12:26 AM

"Good job man. I agree 100%. Social Security is busted and far worse than Madoff."

2. Sam Croll on January 4, 2011 @ 12:28 AM

"Not sure if Madoff is worse than Social Security."

3. Kyle B. Carlton on January 4, 2011 @ 5:40 PM

"Hi Sam, thanks for the comment. If you look at the facts, it's hard to dispute. The Social Security Trust Fund is bankrupt and we are required/forced to pay into it without any guarantee of future benefits. To me, that's worse than the Madoff ponzi scheme because it effects every U.S. tax-payer. Thanks again for the comment."

4. Kyle B. Carlton on January 4, 2011 @ 5:42 PM

"Thanks for the comment Grant, I appreciate the feedback."

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