Tuesday, April 30, 2013

Federal Programs Ponzi Schemes

Best of the Web Today: Eine Kleine Trauermusik - WSJ.com: "This problem didn't begin with Obama, and you can't even blame George W. Bush: "The idea among Americans that they get back what they paid for, with some rate of return, dates to President Franklin D. Roosevelt's legislative marketing of Social Security nearly 80 years ago." As future Enron adviser Paul Krugman noted in 1996, Social Security is a Ponzi scheme. So is Medicare. Politicians have conned workers into thinking of their payroll taxes as an investment and their future benefits as an asset that belongs to them. In reality, the government pays out benefits by taxing current workers and borrowing money--effectively a tax on future workers. Like any Ponzi scheme, such a system is sustainable only as long as the number of suckers--sorry, workers--continues to grow and the number of beneficiaries doesn't grow too quickly." (read more at link above)


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