Bitcoin Forum

Wouldnt the largest ponzi scheme on this blue rock we stand on be the US government's social security & medicare programs?

If the ever expanding income of new younger workers weren't pumped into the system on a yearly basis, wouldnt the entire thing crumble?

The Federal Reserve/IRS system itself is a hybrid ponzi/strongarm scam. Social security and medicare are the sub-ponzis created in order to strengthen the original scam.

With 300 million strong, i dont see any other scam that would compete on this mass scale.

Once you own the government, any scam'll do. :)

Well the whole free market economy is giant Ponzi. New credit relies on old credit being paid regularly. When a large proportion of the debtors cannot pay, the whole system crumbles. Greece is a fresh example of that.

A nice example of free market  ::)

It seems to me the market is quite free - taxes on the biggest players in the market (corporations) are pretty low outside of Europe, so the corporations are free to pursue the most profitable exchanges they can without hindrance of import duties or taxation. Of course, interventionist measures like state healthcare and pensions are an aberration of the system, but this only happens on national level. The world economy is pretty much a not-regulated jungle  where the strongest prevail
Would you elaborate why you consider the current (world) economic system not to be a true free market?

Nope.  Social security is solvent by any sane measure.  Medicare needs fixing. 

The actual issues with the solvency of Social Security are extremely minor. The massive Social Security trust fund will allow the program to pay out benefits at the current level until 2038. At that point — absent modifications to the program — revenues will only be able to pay out 81 percent of promised benefits. That is to say, if the federal government did absolutely nothing over the next 27 years to shore up Social Security, a one time cut of 19 percent in 2038 would make the program solvent into the infinite horizon. This would be a sub-optimal way forward, but it underscores how solid Social Security is: even at 1.9 workers per retiree, the program could pay out at 81 percent of the current, inflation-adjusted rate without increasing revenue at all.

http://mattbruenig.com/2011/08/16/the-myth-of-social-security-insolvency/

International banking is the largest that we know of, but I believe there to be those individuals behind the scenes that do the most damage.

You know, the place all the wealth of the world is always transfered/disappeared to.

Printing presses never stop, yet more and more wealth and property are transfered.

More and more money and wealth is created every minute of every day. Instead of getting richer, the people get poorer.

That's the ponzi.

Really?  1.9 is in FAVOR of the system.  It might be (wrongly) considered a ponzi if there were less workers then retirees like police and firefighters manage to happen due to early retirement. 

Having payouts to people 65 to death which is always less people then from working age to 65.  The amount changes because of things like the baby boomers but apparently even that is not even enough to screw it up.  What screws it up is people living longer.  Changing the retirement age while politically unpopular will fix it even for the 2037 problem, that or cutting benefits.  

If it takes an increased number of contributors to pay off the earlier contributors, it's the mark of a ponzi. Also:

That alone should tell you it is not a Ponzi. 

Two hallmarks...  One is that it is not sustainable.  Social security obviously is.   Second is that social security is not pretending to have nor does it rely on profits.  There are no investors. 

It would be utterly unsustainable without the power of the state to back it.


It has compulsory payments, again backed by threat of the power of the state.

No company in the United States is allowed to run a retirement program the same way as social security is run. If they were, then, instead of having a managed pension account that is reconcilled against benefits, the companies could just make an assumption of future size and people paying into the program and at what levels, and then rely on those future workes to pay for the people retiring today. There would be some savings from overpayment of the workers, but then the company would be able to borrow against those to pay for ongoing operations. Meanwhile, the company itself would be taking on debt in excess of 5 times revenue.

It's a completely ridiculous system, and you can show all the articles you want about the solvency of the system" it is still a ponzi backed by the force of law. It is more stable than private ponzis because they have the ultimate two things every ponzi operator wants: 100% control over when people can begin withdrawing, 100% subscriber-ship with no option to back out.

On top of all of this, the system itself pays out far less than it really should. Taking the dollar value invested into Treasury bonds over the same period, taking out regular disbursements for life and disability insurance, and then converting at the end to an inflation adjusted annuity, gives a far greater monthly benefit than SS pays.

And yet it still seems they need to give an 18% haircut in 2038.

Logical fallacy there.  It DOES have the power of the state to back it, it is compulsory.  You may not like it but it is not unsustainable nor it is a Ponzi.   

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No, not really. Social security is a TAX not an investment.  Social security never claims to make any profit.  Ponzis are not sustainable, Social Security is. 

http://mattbruenig.com/2011/08/16/the-myth-of-social-security-insolvency/

People need to continue to have children at a minimum rate and, as a group, those children need to be at least equally as wealthy as the parents to provide for both themselves and the older generation. So it is some kind of ponzi that includes contributions via childbirth.

Just like the people who accuse bitcoin of being a Ponzi, you do not understand what one is. 

If people have less kids, Social Security needs to reduce benefits or raise the retirement age.  If people have MORE kids then they can increase benefits.   

It is clear that some people  do not like Social Security.  Fine, just call it what it is.  Social Security is both a tax and it is wealth re-distribution.  It is not financially efficient.  It takes away choice. 

It is not a Ponzi. 

I should say that as a tax it is not a ponzi. Unfortunately many people think it is an investment (it will be there for them), and those will be the ones hurt if it collapses.

Well it will probably not collapse unless the US government collapses.  But people are both hurt and helped.

If you are smart and plan ahead you are hurt on SS.   It does not take a rocket scientist to invest 14% of their income and get a good retirement. If you did put in the same amount into a retirement plan or even just in the bank, you would have far more money then SS provides on average. 

If you do not save, can not save or just blow your money, the government going to give you your money back at retirement time even if you screw up everything else.  It will not be much, but you can probably live on it.   

As long as you don't mind cat food. And the government has enough people paying into the system to support you.

The smart move is to move to an area in the country that has lower costs for non-working people.  This applies to people living off of SS as well people who properly invested.  You can live in South Carolina, Florida and many other places on just SS not that I would want to.  What you can not do is live on SS with a sizable mortgage or debt. 

The Federal Reserve system is hands down the single largest Ponzi scheme humanity has ever been burdened with.

Social security is a drop in the bucket when you consider the amount of dollars held around the world (thanks to petrol dollars and the US military that is used as a pawn by the Federal Reserve to force the world to use and hold those dollars).

Social security collapses the US retiree is affected.  The dollar collapses (as every Ponzi scheme does) it will affect just about every single living human in modern society.

I don't feel that Social Security is technically a ponzi scheme because although it has all the characteristics of a ponzi scheme, it is not fraudulent. Anyone that wants to know how it works can easily look it up.

On the other hand, it is unfortunate that a large portion of the population believes that "I have paid into Social Security all my life, therefore I am entitled to [insert misconception here]." That the government is doing nothing to educate these people (because that would cost votes) is where Social Security borders on fraud and therefore might qualify as a ponzi scheme to some.

this

Sorry for muddying the discussion. Can you explain why my statement is wrong?

Well, your statement is actually correct, with the exception of calling it "free market."

You're calling this: https://en.wikipedia.org/wiki/Debt-based_monetary_system (https://en.wikipedia.org/wiki/Debt-based_monetary_system), this: https://en.wikipedia.org/wiki/Market_economy (https://en.wikipedia.org/wiki/Market_economy), and that's where you're wrong. The same thing calling what the US does "capitalism." All the right problems, attached to the wrong label.

+1

Hm, you do have a point. However, isn't the debt-based monetary system a version of the free market? The basic assumption behind a free market is that you are free to trade in any way you want ideally without taxation. Now what prevents some people in this ideal free market to start printing out currency, then offering credit to cover it? That gives them more fluidity and a perceived expansion of wealth, therefore making them the power players in the system. The only difference to the real world would be that the fiat currency printers would not be central banks under government control, but private banks. However they would get big enough to behave in a government-like manner.
In essence, my argument is that once you have a no-holds barred free market, a debt-based system occurs sooner or later. Some scholars from the wikipedia articles you linked to seem to agree with this statement.
To quote: "In his 2011 book Debt: The First 5000 Years, the anthropologist David Graeber asserted that the best available evidence suggests the original monetary systems were debt based, and that most subsequent systems have been too". Haven't read it though, but I think I will now :)

That's not my definition, but I have little training in economics. Where does it come from?

I would say that a free market is one free from any kind of violent coercion on either supply or demand side. This violent coercion does not have to be the work of a government or via taxes. A 100% free market is probably impossible under most circumstances.

Also just because many societies in the past have used debt-based money doesn't make it have anything to do with a free market.

This paper is a nice read btw:
http://szabo.best.vwh.net/shell.html

This is a huge difference. The central banks under government control maintain their monopoly using violent coercion. Private debt issuers do not. Hence, no free market.

Exactly. Any debt-based currency would not last long in open competition with commodity monies (such as Bitcoin, silver, or other metallic currencies). At least, it wouldn't if they tried to inflate it too much.

What would be the guarantee that in an AnCap society (I guess the ultimate in free market?) private debt issuers would not use violent coercion? The argument that they would face overwhelming opposition does not hold in my opinion, because developing the means of coercion costs a lot, and therefore would be affordable only to those with sufficient means, i.e. the fiat printers. You end up with governments in the end.


Same argument as above, they can use violent coercion to ensure they are on top of the competition.

I don't know what you mean by "AnCap society". That is the first time I have seen that term in this discussion. However, a free market is an environment free of violent coercion, by definition.  That is why it is described as free. If you are envisioning some other type of market that is not free of violent coercion, than you are not envisioning a free market. This is what Myrkul correctly pointed out to you originally, and bitcoinbitcoin113 reemphisized this same point. Trying to argue that a free market must necessarily not be a free market is just obtuse.

If what you originally meant was, "the whole (of our current monetary system) is a giant ponzi," I think you would get enthusiastic agreement.

I brought AnCap into the discussion, because many envision that to be the ultimate in free markets. I understand that we have a problem with semantics when discussing free market. You were using the absolute definition, which is of course fine; I was using the widespread definition, as used by many politicians, claiming that what we have now is a free market, as opposed to the planned economies of the socialist world.
My point was that an ideal free market cannot exist, because it immediately reverts to being non-free due to several factors, but I guess this is a discussion for another time, since we are discussing SS here :)

I guess I have to change my position. The President stated the other day,


The truth is that nobody has "earned" Medicare and Social Security. To state that they have "earned" them is fraud and makes Social Security and Medicare a ponzi scheme according to all the criteria.