Social Security

A Ponzi scheme, named after the infamous con-man Charles Ponzi, is a pyramid scheme variant. The way it works is a con-man proclaiming himself to be a financial wizard promises great fixed returns to investors. He needs investors because, although he has a great way to make money, he needs capital to work with. Ponzi originally promised a return of 50% in 45 days. The con-man lures a stream of investors in, paying the initial investors with the capital from the newer investors. As the initial investors rave about this great money making opportunity that really works to their friends, more and more people join up. This goes on until either no new investors can be found and so there is no longer money to pay dividends, or the con-man takes the money he’s accumulated thus far and flees. In 1920 in Boston, Charles Ponzi amassed $9,500,000 before he was busted.

Social Security is a government run retirement scheme. We all have money deducted from our paychecks to go into the "trust fund" and expect to receive payments for the entire duration of our old age starting at retirement. Like Ponzi, our government is no financial wizard and is not investing our retirement money wisely. Our government is a con-artist. There is no trust fund; our money is being spent on various garbage, with a portion being paid to the current retirees as their social security payments. Social Security is a straight up Ponzi scheme, except that the government has the added bonus of being able to imprison anyone who refuses to participate in this wonderful investment opportunity.

Like all Ponzi schemes, this one too, is coming to an end. The "Social Security Crisis" is that the government is about to run out of dupes for its scam -- there are not enough young people to support the old who are about to retire and expect their payoffs.

Even if social security were a valid retirement plan like a mutual fund or a CD, it is still involuntary. The taking of another's money through force is theft, whether it is claimed for their good or not. The government, whose proper role is the protection of rights simply has no business forcing people into its retirement schemes against their will. Besides that, the notion that politicians are better at making (or saving!) money for the future than bankers or businessmen running private, legitimate retirement programs, is simply laughable.

The correct political action to take at this point would be to allow people to opt out of the program and pay off the initial "investors" through general tax funds. No one in their right mind would voluntarily enter into this program in the first place, and so in a few decades this debacle would be gone.