Over at Good Math, Bad Math, Mark Chu-Carroll heard Mayor Micheal Bloomberg refer to Social Security as a Ponzi Scheme and said,
This is, to put it mildly, bullshit. Incredibly, stupid, rampant, bullshit.
Technically, of course, he’s correct. In spite of the many times I’ve refered to SS as a Ponzi Scheme, there are differences and Mark enumerates them.
- Ponzi Schemes are investments and voluntary. Social Security is a tax and non-voluntary.
- In a Ponzi Scheme you have the investors at the top making their money while the poor saps at the bottom aren’t getting anything. In Social Security benefits are paid out to all recipients based on a formula.
- A Ponzi Scheme is based on deceit. No one is ostensibly trying to profit from Social Security, so there is no reason to lie.
- A Ponzi Scheme tries to make a profit and have enough liquidity to make good on some of its promises. Social Security is a zero-balance tax-funded benefit.
In spite of the fact that its not considered an investments, there are those statements you can have mailed to you, where they give you your earnings record along with your estimated benefits, not unlike something I might get from my 403(b).
Politicians have joined in the charade somewhat by referring to the monies collected as investments. And we refer to those benefits as entitlements.
The Trust fund has been skimmed by the government to cover deficits in the general fund, one of the reasons those in the know look at Baby Boomers beginning to collect benefits with some trepidation.
Although not technically a Ponzi Scheme, one can find enough similarities to justify the label.
The 70-year-old Madoff was arrested Thursday on charges of running what amounted to an old-fashioned Ponzi scheme: reporting illusory profits and paying off one set of investors with cash raised from others. [Emphasis mine]
Remind you of some government program? I thought so.
I love it when the media use “Ponzi scheme” because it allows me to refer to Social Security. Maybe I should set up an alert on one of the search engines.
From CNN.com. Here’s the money quote,
Gonzalez filed a lawsuit against Pimstein and his company, the Bottom Line of South Florida, claiming that the entire arrangement was “a classic ‘Ponzi scheme,’ a fraudulent investment operation that involves paying earlier investors from the principal of later investors, rather than from profits generated from real business.”
Doesn’t the federal government call that Social Security?
Dr. Cobin recognizes two rights, positive and negative. Negative rights are natural rights. Positive rights are those rights guaranteed by the government that people do not have naturally.
Dr. Cobin then sets out four categories of public policy.
- Reactive policy which is “action by government which is designed to provide a social service that the market cannot provide well.” The “pure” reactive policies he sets forth are national defense, legal rules based on the law of property, contract and tort, and criminal justice.
- Policies of inefficient public provision wherein, government provides a genuine good or service normally provided by the market.
- Proactive policy aimed at changing behavior (Big Brother or Nanny state policies).
- Proactive policy aimed at fostering redistribution wealth in conjunction with a social goal.
He then rails against two examples of #4, Social Security and student loans.
In Chapter 2, he discusses modern public policy from a Biblical perspective.
First he says that “the Bible never suggests that the institution of government is in and of itself good.” This may come as a surprise to many Bible believers, as it did to me, whose view of government is conditioned by teaching on Romans 13:1-7. He further suggests that nationalism has no place for Christians, which I can agree with.
He spends a lot of time discussing Sept. 11, especially some of the talk of wanting to bomb or even nuke Arab or Muslim population centers in retaliation.
Dr. Cobin contends that any non-reactive policy (i.e., other than #1 above) would be difficult to justify Biblically, even to go so far that a Christian should not voluntary benefit from those policies, and any such benefit would be sin.
He states that, from the Biblical record, “it seems that the main purpose for government is to serve as God’s minister for judgment.”
And he says, “It is the officials in civil government who usually become the greatest beneficiaries of the welfare state or rent seeking society–at the expense of their constituents.”
The rally at the capitol was the big news and was covered by the following Waukesha-based blogs (there are others also):
David at Carrick Bend Thoughts had a post which caused me to think about how much those who favor a
federalization of Iraq are giving Turkey the idea that they could make their excursion into Iraq against the Kurds.
You can catch up with Fletch at Two Heroes.
The MyCommunityNOW blogs have been updated to allow comments and they now have feeds. Here are some pertinent ones: The Right Side of New Berlin (Matt Thomas), Conservatively Speaking (State Sen. Mary Lazich), New Berlin Citizens for Responsible Government, Brookfield City News (Cindy Kilkenny), Thinking Out Loud, Common Ground, Takin’ the Blog for a Walk, Wake Up! Waukesha, Maple & Main, Inside New Berlin, Environmental Stewards, As I See It (New Berlin alderman Joe Poshepny), Pauls’ Falls, Public Trough, Balancing Brookfield, Practically Speaking, and Land Savers. Some of these post periodically, some once a week, some several times a week, others rarely. More are added periodically.
Well, that’s it again for this week. Again if you have a suggestion, know a Waukesha County blogger not on my blog roll, or have read a blogger’s take on happenings in Waukesha (usually the water problem and sprawl issues are most likely), let me know, either by email at thoughtfulconservative [at] yahoo [dot] com or in the comments.