With Friday’s announcement by the Trustees of the Social Security Administration that “reserves are still growing and will continue to do so through [the year] 2020,” it didn’t take long for groups like Strengthen Social Security (SSS) to chortle that not only is Social Security “fully affordable and structurally sound, [but it] will
Tag Archives: Ponzi Scheme
14,000 Idle Wind Turbines a Testament to Failed Energy Policies
- Wednesday, 10 April 2013 19:00
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When Element Power announced on Wednesday the closing of a deal to build wind turbines for Blackrock in Ireland, nothing was said about the more than 14,000 other wind turbines lying idle across the world. Instead, Jim Barry, Managing Director for BlackRock, the world’s largest asset manager, expressed great pleasure at its new venture with Element:
Bernanke is Bankrupting Social Security
- Sunday, 30 September 2012 09:18
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The Fed Is Systematically Destroying Social Security And The Retirement Plans Of Millions
The Social Security trust fund needs to earn interest to achieve levels that will preserve it till 2033; with interest rates close to zero, the trust fund is projected to be depleted ten years earlier – by 2023.
By law, the money deposited in the SS trust fund must be invested in U.S. government securities…In order for SS Ponzi to work, the trust fund, invested in government securities, needs to produce healthy returns. It won’t; it can’t. Thanks QE-genie Bernanke
Social Security Card (Photo credit: 401(K) 2012)
I learned years ago that Social Security is a Ponzi scheme which would have failed and collapsed (like all of them do eventually) except that it is enforced at the point of a gun.
I remember a conversation with my father-in-law about this. My company was paying a lot of money into Social Security, and he had just started drawing “his money” out. I suggested, tongue-in-cheek, that since it was my company’s money he was getting, why not just let me write him a check directly and save all the trouble of the round trip to Washington.
He was outraged! I mean, his face got all red, and he blustered and fumbled. He could scarcely believe his ears. His favorite FDR program – which was working “so well” he assured me – was being gored, logically, by one of his (not-so-bright) students! But he had no answer. And that ended, for all time, any further conversations about the matter.
Michael Snyder, of Economic Collapse, explains that low interest rates are devastating Social Security, and hastening its eventual demise:
By keeping interest rates at exceptionally low levels, the Federal Reserve is absolutely crushing savers and is systematically destroying Social Security.
Of course, financial viability was never a concern with Social Security. The bulk of the payouts would be coming from payroll taxes and not from earnings. But every little bit helps put off the day of reckoning. That day is getting closer.
Social Security is Cratering
- Thursday, 16 August 2012 19:00
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WaPo: FACT CHECK: Social Security adds to budget deficit
“Over 77 years and now through 13 recessions, Social Security has not added one penny to our deficit or our debt,” Rep. Xavier Becerra, D-Calif., said at a recent hearing by the House Ways and Means Social Security subcommittee. Becerra is the top Democrat on the panel.
President Roosevelt signs Social Security Act (Photo credit: Wikipedia)
Becerra is a fool. He sports an impeachable 17 (on a scale of 100) Freedom Index rating based on his voting record’s hewing (or not!) to the limitations of the Constitution. So his economic ignorance is only exceeded by his Constitutional treachery!
Social Security is broke. It was broke from the moment it started back under FDR because it was based on the flawed premises of a Ponzi scheme. It’s just taken this long for its unwinding to become obvious. So obvious, in fact, that politicians like Becerra are forced to make stupid statements in order to defend it.
WaPo (The Washington Post)—the liberal establishment’s most trusted mouthpiece) admitted:
For nearly three decades Social Security produced big surpluses, collecting more in taxes than it paid in benefits. The government, however, spent that money on other programs, reducing the amount it had to borrow from the public, including foreign investors. That’s why some advocates complain that Congress has “raided” Social Security…
Social Security is now spending a portion of the interest because it needs cash to cover monthly benefit payments. This year Social Security is projected to pay $789 billion in benefits and administrative costs and collect $623 billion in payroll taxes and taxes on benefits, a shortfall of $166 billion.
About $112 billion of the shortfall is from a temporary reduction in the payroll tax that is scheduled to expire in January. There is no question that money adds to the budget deficit because Congress financed the tax cut through borrowing. (my emphasis)
Do you see what just happened here? A liberal politician is trying to defend Social Security, and the liberal WaPo is saying he’s wrong, that Social Security “adds to the budget deficit.”
That’s really quite remarkable, when you think about it.
Allen Stanford’s Ponzi Scheme a Study on Regulatory Capture
- Friday, 09 March 2012 14:19
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Allen Stanford, former chairman of the Stanford Financial Group of Companies, was convicted on Tuesday on 13 counts of fraud, conspiracy, obstructing justice, violating U.S. securities laws—for operating a Ponzi scheme. Sentencing is scheduled for June, which could result in Stanford remaining behind bars for at least another 20 years.
The scheme, valued at $7 billion at its zenith, has only $300 million in various accounts. Another jury has just ruled these accounts may be seized for potential customer restitution.
The Ponzi scheme was elegantly simple. Stanford’s offshore bank in the British overseas territoryof Montserrat was closed down for “irregularities” in the mid-1980s so he moved it to Antig
ua where he ingratiated himself, using investors’ money, with the local government by lending it millions of dollars and building government administration offices and a hospital. Meanwhile his investors were fooled into thinking they were buying ultra-safe Certificates of Deposit paying above-market rates of interest. His influence went way beyond the local government, however, with regular, sometimes daily, flights of U.S. Senators and Congressmen coming to Antigua to partake of Stanford’s generosity and enjoy his lavish parties. As Mikeda Mikel, the owner of a private jet company in Antigua explained: “They were partying on yachts in an exclusive resort, and when you have US politicians supporting a man like Mr. Stanford on an island as small as Antigua…if you had any doubts before [about his honesty] they go out the window. America has sanctioned him [therefore] he’s good to go.”
By investing in regulatory “protection,” Stanford was able to live for years on his investors’ capital without being disturbed by annoying questions into how he could pay such generous dividends to his clients. As Gaston Browne, chairman of the Antigua Labour Party (ALP), which was in power during Sanford’s heyday, said:
80 is the New 65, Two Surveys Show
- Wednesday, 23 November 2011 04:09
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On Wednesday Wells Fargo released the results of its survey of 1,500 individuals between ages 25 and 75, titling it “80 is the New 65 for Many Middle Class Americans” while another study in June by three financial service non-profits showed three-quarters of those surveyed planning to work beyond age 65.
The first survey focused on middle class (incomes between $25,000 and $100,000 a year) citizens while the second concentrated on higher net worth individuals (those between ages 55 and 75 with investable assets of $100,000 or more) but the results were remarkably similar.
The Wells Fargo study found that one quarter of middle class Americans say they will “need to work until at least 80” to pay their bills, while three-quarters are expecting to work at least part time to help with the bills. And when those between ages 40 and 60 were quizzed, more than half say they will “need to work” after age 65.
When asked about reforming Social Security and Medicare, the younger Wells Fargo respondents were willing to
Is Rick Perry Right? Is Social Security a Ponzi Scheme?
- Wednesday, 14 September 2011 21:17
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Image via Wikipedia
Presidential candidate Rick Perry opined in the first Republican debate that Social Security is a “failure” and a “Ponzi scheme,” and then reiterated the charge in the second debate on Monday night. At the first debate, Perry said Social Security is a “Ponzi scheme for these young people. The idea…that the current program is going to be there for them is a lie.” When pressed by the moderator, Perry reiterated, saying Social Security is a “monstrous lie to our kids.”
On Monday night Perry refused to back down: “It is a Ponzi scheme to tell our kids that are 25 or 30 years old today, you’re paying into a program that’s going to be there. Anybody that’s for the status quo with Social Security today is involved with a monstrous lie to our kids, and it’s not right.” But in his op-ed piece in USA Today on Sunday, Perry backed off, writing instead that
Lieberman Plans to Kick the Medicare Can
- Saturday, 02 July 2011 07:45
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Image by Truthout.org via Flickr
Senator Joe Lieberman (I-Conn.) joined with Senator Tom Coburn (R-Okla.) on Tuesday in announcing their plan to reform Medicare before it goes “broke and take[s] our government down with it.” Noting that Medicare beneficiaries take almost three times more out of Medicare than they ever put in, Lieberman is persuaded that the flawed welfare-state program can be reformed.
With substantial increases in premiums and extensions of age of eligibility, Lieberman said their plan would save $600 billion over the next 10 years, and reduce Medicare’s unfunded liability from
A Harvard Professor’s Goofs, Gaffes, and Blind Spots
- Thursday, 31 March 2011 10:15
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Image via Wikipedia
Harvard Professor Gregory Mankiw, in writing a hypothetical speech in the New York Times for the President in the year 2026, thinks politicians can kick the entitlements can down the road for another 15 years. His opening could come from any politician’s current teleprompter:
My fellow Americans, I come to you today with a heavy heart. We have a crisis on our hands. It is one of our own making. And it is one that leaves us with no good choices.
For many years, our nation’s government has lived beyond its means. We have promised ourselves both low taxes and
Translating Bernanke-Speak About the Great Recession
- Sunday, 10 October 2010 11:53
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Image by Getty Images via @daylife
When Fed Chairman Ben Bernanke says the country is in trouble, many aren’t listening, partly because the media wasn’t there reporting on it, and partly because those listening can’t understand what he’s saying. Speaking at the Annual Meeting of the Rhode Island Public Expenditure Council on Monday, the best he could do was “There is no way around it—meeting these challenges will require…the public to make some very difficult decisions and to accept some sacrifices.”
Fed Confirms Recovery Stalled
- Thursday, 19 August 2010 05:54
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Image by San Diego Shooter via Flickr
When the Federal Open Market Committee announced yesterday that “the pace of economic recovery is likely to be more modest in the near term than had been anticipated,” stocks in Europe lost three percent of their value, interest rates on the U.S. 10-year Treasury note dropped startlingly as investors ran to safety, and the dollar hit the lowest level against the Japanese Yen since 1995.
A Japanese bond dealer said, “Investors were unnerved by the Fed’s statement. It just confirmed that the U.S. economic recovery is slowing.”
Social Security Benefits Only for Needy?
- Friday, 16 July 2010 16:36
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Image via Wikipedia
One way to fix Social Security would be to limit payments only to those who need them, according to House Minority Leader John Boehner (R-OH). In an interview with the Pittsburgh Tribune-Review, he added that increasing the retirement age to 70 for those age 50 and younger would also be necessary.
“We need to look at the American people and explain to them that we’re broke,” Boehner said. “If you have substantial non-Social Security income while you’re retired, why are we paying you at a time when we’re broke? We just need to be honest with people.”
Another Obama, Clinton Fundraiser Going to Jail
- Monday, 22 March 2010 13:31
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Image via Wikipedia
It surprised few close observers of the current political scene to learn that another Democratic fundraiser, Hassan Nemazee, admitted to fraud in raising money for Hillary Clinton and Barack Obama. Iranian national Nemazee pled guilty in Manhattan Federal Court last week to charges of defrauding Bank of America, Citibank, HSBC Bank USA, as well as a “longtime friend and business associate” of nearly $300 million, much of which was funneled into the political campaigns of Senator Clinton and presidential candidate Obama.
Social Security’s Nest Egg is Officially Cracked
- Tuesday, 16 March 2010 08:43
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Image by Samuel M. Livingston via Flickr
In a misleading article by Associated Press that IOUs “stashed away” in an investment account in Parkersburg, West Virginia, were going to have to be sold to meet Social Security shortfalls, all the attention was on the location of the account instead of what was in it.
Analyzed here and elsewhere, Social Security is now suffering in the open as a result of unconstitutional and unsound financial assumptions starting in 1935. First of all, the gigantic welfare program, the largest government transfer program in the world, was sold to the American people during the Great Depression as an annuity guaranteed by the federal government. In fact, it still retains the early efforts to link Social Security to the insurance industry (which, at that time, still retained a high degree of public trust) by calling it the Federal Insurance Contributions Act, or FICA.
Is Social Security a Ponzi Scheme?
- Sunday, 03 January 2010 11:13
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More than $16 billion of investors’ money evaporated in Ponzi schemes in 2009, according to the Associated Press. Although the names Bernie Madoff and Allen Stanford were in the headlines in 2009, many other Ponzi schemes were uncovered as the economy declined, making continued payouts to investors impossible.
As Warren Buffet said, “Only when the tide goes out do you discover who’s been swimming naked.”
Sarbanes-Oxley and the Separation of Powers
- Monday, 07 December 2009 19:15
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On Monday, December 7, the Supreme Court began hearing arguments concerning Free Enterprise Fund v. Public Company Accounting Oversight Board (PCAOB).
While perhaps not as memorable as the “date which shall live in infamy,” this case has been called the most important “separation of powers” case in 20 years by Judge Brett Kavanaugh, the dissenter in the 2-1 decision by the D.C. Circuit Court of Appeals that ruled for the PCAOB, prior to the case going to the Supreme Court for review).
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