Ponzi scheme
I've complained for years that Social Security is nothing more than a government run Ponzi scheme. It depends on a demographic model that no longer exists -- one that has a dozen or so workers for each retiree. When a private individual or company does this sort of thing, they go to jail. When the government does it, it's defended as either a retirement program or a welfare program by the likes of people like Paul Krugman. Of course, Krugman describes it as a retirement program or welfare program based upon which characterization better suits his dishonest, rhetorical point.
Yesterday, USA Today helpfully reported that if you're under the age of 50, you probably aren't going to get a cent of your Social Security. OK, maybe they didn't put it that way, but you've got to read between the lines. [via VikingPundit]
The federal government recorded a $1.3 trillion loss last year — far more than the official $248 billion deficit — when corporate-style accounting standards are used, a USA TODAY analysis shows.
The loss reflects a continued deterioration in the finances of Social Security and government retirement programs for civil servants and military personnel. The loss — equal to $11,434 per household — is more than Americans paid in income taxes in 2006.
"We're on an unsustainable path and doing a great disservice to future generations," says Chris Chocola, a former Republican member of Congress from Indiana and corporate chief executive who is pushing for more accurate federal accounting.
Modern accounting requires that corporations, state governments and local governments count expenses immediately when a transaction occurs, even if the payment will be made later.
The federal government does not follow the rule, so promises for Social Security and Medicare don't show up when the government reports its financial condition.
Bottom line: Taxpayers are now on the hook for a record $59.1 trillion in liabilities, a 2.3% increase from 2006. That amount is equal to $516,348 for every U.S. household. By comparison, U.S. households owe an average of $112,043 for mortgages, car loans, credit cards and all other debt combined.
For those who are mathematically challenged and believe they're still going to get their check, I offer you this paragraph near the end.
The White House and the Congressional Budget Office oppose the [accounting] change, arguing that the programs are not true liabilities because government can cancel or cut them.
Yeah, kiss your Social Security goodbye.
0 comments on “Ponzi scheme”
Tags
Some of us cynics believe that the baby boomer entitlement tsunami, that Congress lacks the testicular fortitude to tackle, is the prime mover behind immigration reform.
Immigration reform will open the floodgates for a burst of population that will.......generate tax revenue to attempt covering the entitlement tsunami, not to mention Congressional cowardice......
Is it too much to ask for a leader who will lay out the stark choice: cut entitlements or face cultural destruction thru immigration featuring no assimilation??