Our National Ponzi Scheme
Recently, our local newspaper ran a lead article entitled: “Early retirements hurt Social Secutiry.” The story explained that the so-called Social Security Trust Fund will run a deficit for this year and next, due to a loss of jobs in the present economy. I responded with the following editorial, which they printed yesterday:
When Bernie Madoff takes millions of dollars from investors, then uses incoming money to pay previous investors, we call it a Ponzi scheme and securities fraud, and he goes to jail.
When Congress takes billions of dollars from investors, then uses incoming money to pay previous investors, we call it Social Security.
Ponzi schemes can only be sustained as long as the number of new participants is greater than the number of old participants they are supporting. When Social Security began, there were 16 workers paying into Social Security for every recipient. Today, three workers support every recipient, and that number is declining.
In a Ponzi scheme, the last ones in are the ones who lose everything. That means we’re enjoying the ride now, and our children and grand-children get crushed later.
The current Social Security deficit is merely the first crack in the dam. If we don’t start electing officials who care more about the next generation than about the next election, it’s only a matter of time before the dam fails.
I wonder if we’ll all act surprised?