ModerateRepZero
Golden Member
- Jan 12, 2006
- 1,572
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social security is not a ponzi scheme. but it is a pay-as-you-go system. the difference is that a ponzi scheme is a pay-as-you-go system disguised as an investment program that promises high returns. ponzi schemes are deceptive. not true with social security, nothing deceptive about ss.
Excellent point; the key characteristics of a ponzi scheme is that it is based on deception, and the fact that it's unsustainable based on its setup and payout. The trust fund concept can be somewhat confusing/misleading but it's an accounting gimmick. There's nothing deceptive about how Social Security pays out money; it collects FICA taxes and pays current beneficiaries based on what it collects.
I don't think you know what a ponzi scheme is. They collapse on the weight of themselves because there is no investment at all, it is all a mirage to extract money from people. SS isn't meant to extract money, it is a fund set up to ensure stability for the old and disabled. It does that.
Also true. For ponzi schemes, any money coming in just pays off earlier investors; it's unsustainable on its face because the only way to pay off investors is to attract new ones; there's no investing the money to reap a profit and reward investors with the aforementioned profit.
In contrast, Social Security does exactly what it's designed to do; pay monetary benefits to eligible beneficiaries based on someone's paying into the system.