Tag Archives: Bernard Madoff

Ponzi schemes: Illegal for Bernie Madoff but not the government

As I noted in Repeat after me: There is no Social Security “trust fund”:

There is no trust fund.  No. Trust. Fund. Anyone claiming there is such a thing is ignorant and/or trying to deceive you.

The government does not have the capability to set aside funds in a bank account like we do.  When the Social Security funds come in they are spent on Social Security, or, as they have done for decades, on other spending projects they didn’t want to raise taxes to fund.  Decades of dishonesty and financial mismanagement by both parties are becoming more visible.

If Social Security taxes stopped today there wouldn’t be a penny saved to meet the commitments the government made.  It is the world’s largest Ponzi scheme.

If some of these Social Security funds went to private investments that you could control then that would limit how much the politicians could abuse.  But they don’t want to lose control, so they play on your fears that something bad will happen.

Yes, the market could crash and you could lose your investments.  It is a risky world.  But think about this: Whether your private account crashed or not it isn’t like the government is saving our taxes today to pay out tomorrow.  Either way the payouts they will make 10 years from now will come from taxes paid 10 years from now.

Simply put, we can’t lose by having at least part of current contributions devoted to private accounts.  The politicians will lose because they’ll have to find a way to fund current spending, or not spend the money at all.

Don’t let fear-mongering by politicians fool you.  The system has been broken for a long time.  Democrats didn’t want you to be informed and Republicans didn’t try hard enough to inform you.  But it isn’t that complicated.

Here are some great ideas from Time to Opt Out of the Social Security Ponzi Scheme.  I urge you to the whole thing.  Now is the time to educate people on how Social works, why it is doomed to fail, and what we can do about it now.  Those young people who swallowed Obama’s lies and are now unemployed and saddled with massive college debts may be willing to listen to some truth now.  Same thing for middle-aged people who will realize that they will spend their careers paying into a system that will be beyond bankrupt when they retire.

The Social Security Ponzi scheme is perhaps the most consequential government infringement upon our lives.  Conservatives are justifiably outraged that Obama egregiously mandated that we purchase health insurance.  However, the individual mandate is not nearly as meddlesome and tyrannical as the government’s complete control over our retirement security.  The only reason why these two programs are regarded differently by the public, is because Social Security has been around for 75 years.  Consequently, most Americans are conditioned to believe that a person’s retirement is indissolubly tied to government-run Social Security.

Now that Social Security is running a perennial deficit and is facing insolvency, conservatives have an opportunity to reverse one of the most flagrant violations of our property rights, by offering workers the option to opt out of the Madoff-style program.

As the unfunded liability for Social Security balloons to $21.4 trillion over the next 20 years, it is painfully obvious to young workers that they will not enjoy much retirement security, if any, from the government program.  Democrats are totally apathetic to their grim future; they will be long retired by then, enjoying the full array of government benefits that they secured for themselves.  Meanwhile, they would rather demagogue the issue, using fallacious scare tactics to stir up current retirees.  Accordingly, we should harness the Democrats’ Mediscare demagoguery towards seniors, and direct it towards younger Americans.  If Paul Ryan’s Medicare plan will push granny over the hill, the status quo of the Democrats’ Ponzi scheme will prevent the grandchild from making it up the hill.

With high unemployment and polls showing a precipitous drop in support for Obama among young voters, now is the time to reach out to those voters.  Congressman Pete Sessions is proposing the SAFE ACT (HR 2109), which would allow younger workers to control all of their retirement savings.  Here are some of the key details of the proposal:

  • Every American would be able to opt out of the current system and direct the full 6.2% of payroll taxes to a personal retirement account beginning January 1, 2012.  Conversely, anyone who wishes to remain in the current system would not be affected.  An employee who chooses to opt for the SAFE account can switch back to the current system during the first five years after opting out.
  • After 15 years of the bill’s enactment, employers would be able to contribute “their share” of payroll taxes to the employee’s SAFE account.
  • Self-employed individuals would be able to divert the full amount of their payroll taxes to a SAFE account.
  • The SAFE accounts would be tax free and any cash contributions would be tax deductible.   Also, all post-retirement distributions from the account would be tax free.  Any pre-retirement distributions would be taxed as income.
  • Upon the death of the account beneficiary, irrespective of his/her age, the inheritors of the estate will be able to assume full ownership of the account.

. . .

So, young Obama zombies with skulls full of mush; with whom do you trust your retirement security: your bank account or Obama’s defunct ATM?  How about Bernie Madoff?