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JOHN STOSSEL: Ponzi! Ponzi! Ponzi! – Washington Examiner

September 14, 2011

Ponzi! Ponzi! Ponzi!

By: John Stossel | 09/13/11 5:16 PM

Ponzi! Ponzi! Ponzi! There, I said it. To the extent people believe there are trust funds with their names on them, Social Security is absolutely a Ponzi scheme. So is Medicare. People need to hear it.

Many people think that when the government takes payroll tax from their paychecks, it goes to something like a savings account. Seniors who collect Social Security think they’re just getting back money that they put into their “account.” Or they think it’s like an insurance policy — you win if you live long enough to get more than you paid in. Neither is true. Nothing is invested. The money taken from you was spent by government that year. Right away. There’s no trust fund. The plan is unsustainable. Medicare is worse.

Mitt Romney and other Republicans who scoff at Rick Perry shamelessly pander to older voters. They should tell people the truth.

Still, I’m not convinced Perry has more than a sound bite. In his USA Today op-ed this week, the most he says is, “We must consider reforms to make Social Security financially viable.” He doesn’t say what kind of reforms.

Charles Ponzi promised to make money for investors by taking advantage of price differences in coupons for postage stamps. Trouble is, he paid some early “investors” with money wheedled from later “investors.”

What sustains a Ponzi scheme is deception. If people really knew how it worked, they wouldn’t sign on.

Social Security and Medicare are different. You could say no to Ponzi. I wouldn’t advise saying no to the government. Not if you want to stay out of prison.

Social Security is nothing more than a promise from politicians. The next gang can break the promise.

Twice the government has argued before the Supreme Court that Social Security is not insurance. In 1960, Health, Education and Welfare Secretary Arthur Sherwood Flemming submitted a brief to the courts stating: “The contribution exacted under the Social Security plan is a true tax. It is not comparable to a premium promising the payment of an annuity commencing at a designated age.”

via Ponzi! Ponzi! Ponzi! | John Stossel | Columnists | Washington Examiner.

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One Comment
  1. Kenneth Chemin permalink
    September 14, 2011 8:45 AM

    John Stossel I am so glad you called social secutity and medicare a giant Ponzi sceam. I only hopes Govener Perry comes out with a plan and hot by a 1/2 optout of social security that tells me that we the tax payers will have to pick up the short falls. I would like to see social security out of the general funds and into a seperal fund and take all social programs out and let the general funds pay for these programs. But our good leaders need to stay out of these funds and problem solved.

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