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The T 
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Joined: October 16 2006
Location: FL, USA
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Points: 17493
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 Posted: February 07 2011 at 11:41 |
 Equality 7-2521 wrote:
The T wrote:
Very interesting article. As I haven't lived here all my life, I'm much more ignorant of Reagan than of presidents a d politics since Bush W. It's strange to see the fascination that some in the right have with him, and that fact by itself should make people suspicious: too much personal adoration from the media suggests interests behind it, period. Or commercial appeal. Or both. So in the end he appears to have been just as pro-government as all the lefties after him, wasn't he?
Now, in another light, though originated in my reading of that article, I found this apparent explanation of why social security is not a ponzi scheme. I think the whole thing fails inmediately after it says that one is a "forced" payment from taxpayers, and then acknowledges that Madoff would have loved to have the option to force people to pay. What do you think? |
Yes he certainly was. I used to be an admirer of him, and I would make excuses for why his policies ended up the way that they did. No longer.
About the article.
article wrote:
First, in the case of Social Security, no one is being misled. Madoff
allegedly falsely claimed to have discovered a "black box" method of
earning impressive results, and by doing so enticed individuals and
organizations to invest with him. Social Security is exactly what it
claims to be: A mandatory transfer payment system under which current
workers are taxed on their incomes to pay benefits, with no promises of
huge returns. (Of course, it's true that if Madoff had the power to
require participation, he would have had an easier time keeping his
alleged scheme rolling.) |
My first critique would be that people are being misled. It's called Social Security Insurance. This implies that it operates as insurance, where premiums are invested to yield a profit to be used to pay out the beneficiaries. This is not so. Also, why is deception necessary for it to be a Ponzi Scheme? Especially when one is forced into it. If Ponzi held a gun to your head and said "Give me money. Here's what I'm going to do with it.", we wouldn't have written it off as a good thing because he wasn't deceptive about what he was doing with the money.
| It's true that Social Security faces a huge burden -- and a
significant, long-term financing problem -- in light of retiring Baby
Boomers. (The latest projections anticipate Social Security tax
revenues to fall below costs in 2017 and the Social Security Trust
Funds to be exhausted in 2041.) But Social Security can be, and has
been, tweaked and modified to reflect changes in the size of the
taxpaying workforce and the number of beneficiaries. It would take
great political will, but the government could change benefit formulas
or take other steps, like increasing taxes, to keep the system from
failing. |
The basic argument laid out here is that, it's not a Ponzi Scheme because it's not doomed to fail. The government can just tax more to keep the system going. Oh my. And someone printed that justification? It's not a ponzi scheme because instead of crumbling because of lack of new investors, we can just take more from the current investors? Terrible.
| Social Security is morally the polar opposite of a Ponzi scheme and fundamentally different from what Madoff allegedly did. |
Yeah... Because it has good intentions...
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Exactly. Basically the fact that force can used in the case of SS doesn't really un-make it a ponzi scheme
Maybe a ponzi scheme has to have the intention to commit the fraud? In theory, the intention is not there, but the figure is very similar. If freedom was truly free, lawyers would have a day trying to figure this out.
Yes the second argument is horrible. It's like saying "it's not fraud because the person who did it knew he was going to run out of the stolen money in a few years"...
Good intentions... Yes. I agree there might be. But the problem is that with this banner ideas are sold that are inherently not good...
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The T
Special Collaborator
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Joined: October 16 2006
Location: FL, USA
Status: Offline
Points: 17493
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Posted: February 07 2011 at 11:43 |
JJLehto wrote:
I don't thin anyone really believed that Teo, least I hope not.
Obvious SS was not a ponzi scheme, BUT it makes a strong case against it especially in light of Madoff. One powerful talking point to be used by the opposition.
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Yes, in the big scheme of things a minimal % of the population does believe the SS to be a Ponzi scheme. That doesn't mean they're right...
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The T
Special Collaborator
Honorary Collaborator
Joined: October 16 2006
Location: FL, USA
Status: Offline
Points: 17493
|
Posted: February 07 2011 at 11:45 |
Equality 7-2521 wrote:
JJLehto wrote:
Speaking of which, how do yall feel about this?
I only know a few details, but I believe the attorney representing the Madoff victims is sueing EVERYONE that made any money involved with him. Claiming it is not for punishment or anything but merely an attempt to get back money to those cheated out of it.
I heard it on ESPN actually since the owner of the Mets is....well not in a happy place.
While what happened is terrible, and these people made money through ill means (on purpose or not) how do you feel about taking their money away and giving it to the victims? I guess even if you don't like it, this is being done by the courts so what can you do about it?
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It depends on how the money was acquired. If it was a gift for example, I have no problem with the confiscation. If anyone knew the money was illegally obtained, I have no problem with it. If the money was given as a payment for services by a party ignorant of the ill-doing, then they are victims just as much as the people who were originally looted, and I am not in favor of the confiscation of funds from them.
If you steal a lady's purse, and then pay me to cut your lawn, I'm stilled entitled to the money which you agreed to pay me for cutting the lawn.
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Agreed.
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The T
Special Collaborator
Honorary Collaborator
Joined: October 16 2006
Location: FL, USA
Status: Offline
Points: 17493
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Posted: February 07 2011 at 11:48 |
JJLehto wrote:
Obama just said he wants to lower corporate taxes?
Even mentioned doing away with some outdated/unnecessary regulation.
That socialist b*****d! Next thing you know he'll declare the government takeover of all businesses and centrally planned economies. It would be the logical next step!
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Damn I missed that. I was in my country's consulate paying 110 $ to renew my passport, basically paying 110 for a little book that should cost about 3$ plus the necessary money for the government and the consulate guy who works that horrible schedule of 9 to 3. In a few months I'll have an american passport but since I'm going to my country in march I HAD to renew my damn ecuadorian one or they wouldn't let me out with an expired one.
Bad thing is, he probably will lower those taxes but he'll make up for them someplace else, and maybe in the people that get hurt the most. Why don't just lower all of them?
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Equality 7-2521
Forum Senior Member
Joined: August 11 2005
Location: Philly
Status: Offline
Points: 15784
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Posted: February 07 2011 at 12:00 |
The T wrote:
Equality 7-2521 wrote:
The T wrote:
Very interesting article. As I haven't lived here all my life, I'm much more ignorant of Reagan than of presidents a d politics since Bush W. It's strange to see the fascination that some in the right have with him, and that fact by itself should make people suspicious: too much personal adoration from the media suggests interests behind it, period. Or commercial appeal. Or both. So in the end he appears to have been just as pro-government as all the lefties after him, wasn't he?
Now, in another light, though originated in my reading of that article, I found this apparent explanation of why social security is not a ponzi scheme. I think the whole thing fails inmediately after it says that one is a "forced" payment from taxpayers, and then acknowledges that Madoff would have loved to have the option to force people to pay. What do you think? |
Yes he certainly was. I used to be an admirer of him, and I would make excuses for why his policies ended up the way that they did. No longer.
About the article.
article wrote:
First, in the case of Social Security, no one is being misled. Madoff
allegedly falsely claimed to have discovered a "black box" method of
earning impressive results, and by doing so enticed individuals and
organizations to invest with him. Social Security is exactly what it
claims to be: A mandatory transfer payment system under which current
workers are taxed on their incomes to pay benefits, with no promises of
huge returns. (Of course, it's true that if Madoff had the power to
require participation, he would have had an easier time keeping his
alleged scheme rolling.) |
My first critique would be that people are being misled. It's called Social Security Insurance. This implies that it operates as insurance, where premiums are invested to yield a profit to be used to pay out the beneficiaries. This is not so. Also, why is deception necessary for it to be a Ponzi Scheme? Especially when one is forced into it. If Ponzi held a gun to your head and said "Give me money. Here's what I'm going to do with it.", we wouldn't have written it off as a good thing because he wasn't deceptive about what he was doing with the money.
| It's true that Social Security faces a huge burden -- and a
significant, long-term financing problem -- in light of retiring Baby
Boomers. (The latest projections anticipate Social Security tax
revenues to fall below costs in 2017 and the Social Security Trust
Funds to be exhausted in 2041.) But Social Security can be, and has
been, tweaked and modified to reflect changes in the size of the
taxpaying workforce and the number of beneficiaries. It would take
great political will, but the government could change benefit formulas
or take other steps, like increasing taxes, to keep the system from
failing. |
The basic argument laid out here is that, it's not a Ponzi Scheme because it's not doomed to fail. The government can just tax more to keep the system going. Oh my. And someone printed that justification? It's not a ponzi scheme because instead of crumbling because of lack of new investors, we can just take more from the current investors? Terrible.
| Social Security is morally the polar opposite of a Ponzi scheme and fundamentally different from what Madoff allegedly did. |
Yeah... Because it has good intentions...
|
Exactly. Basically the fact that force can used in the case of SS doesn't really un-make it a ponzi scheme
Maybe a ponzi scheme has to have the intention to commit the fraud? In theory, the intention is not there, but the figure is very similar. If freedom was truly free, lawyers would have a day trying to figure this out.
Yes the second argument is horrible. It's like saying "it's not fraud because the person who did it knew he was going to run out of the stolen money in a few years"...
Good intentions... Yes. I agree there might be. But the problem is that with this banner ideas are sold that are inherently not good... |
I mean it's kind of quibbling over definition, but to me a Ponzi scheme is the structure itself which is naturally insolvent. I really doubt how good the intentions are of SS. You could pretty much put those funds into random investments and yield a much higher return than you get from SS. I would argue that forcing people into a system doomed to fail constitutes very poor intentions.
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"One had to be a Newton to notice that the moon is falling, when everyone sees that it doesn't fall. "
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Equality 7-2521
Forum Senior Member
Joined: August 11 2005
Location: Philly
Status: Offline
Points: 15784
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Posted: February 07 2011 at 12:02 |
The T wrote:
JJLehto wrote:
Obama just said he wants to lower corporate taxes?
Even mentioned doing away with some outdated/unnecessary regulation.
That socialist b*****d! Next thing you know he'll declare the government takeover of all businesses and centrally planned economies. It would be the logical next step!
|
Damn I missed that. I was in my country's consulate paying 110 $ to renew my passport, basically paying 110 for a little book that should cost about 3$ plus the necessary money for the government and the consulate guy who works that horrible schedule of 9 to 3. In a few months I'll have an american passport but since I'm going to my country in march I HAD to renew my damn ecuadorian one or they wouldn't let me out with an expired one.
Bad thing is, he probably will lower those taxes but he'll make up for them someplace else, and maybe in the people that get hurt the most. Why don't just lower all of them? |
If politicians actually cared about freedom or economic health they would lower taxes. That never happens. Instead we cut certain kinds of taxes. It's a joke. They cut taxes when it becomes politically profitable to throw meat to the particular group which will benefit. We have a government of whores.
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"One had to be a Newton to notice that the moon is falling, when everyone sees that it doesn't fall. "
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Padraic
Special Collaborator
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Joined: February 16 2006
Location: Pennsylvania
Status: Offline
Points: 31169
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Posted: February 07 2011 at 12:03 |
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I think there was deception done with regards to SS - I can't tell you how many older folks think that the SS check they receive is "their money", that the govt. set up a little account for them and is simply now paying them back from all SS taxes collected over their working lifetime. Some were quite surprised when I informed them how the system actually works.
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Padraic
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Joined: February 16 2006
Location: Pennsylvania
Status: Offline
Points: 31169
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Posted: February 07 2011 at 12:06 |
And, tell me that SS does not fit this description (from wiki)
A Ponzi scheme is a fraudulent investment operation that pays returns to separate investors, not from any actual profit earned by the organization, but from their own money or money paid by subsequent investors.
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Epignosis
Special Collaborator
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Joined: December 30 2007
Location: Raeford, NC
Status: Offline
Points: 32530
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Posted: February 07 2011 at 12:11 |
Padraic wrote:
And, tell me that SS does not fit this description (from wiki)
A Ponzi scheme is a fraudulent investment operation that pays returns to separate investors, not from any actual profit earned by the organization, but from their own money or money paid by subsequent investors. |
But Social Security isn't fraudulent, so it can't be a Ponzi scheme!
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Padraic
Special Collaborator
Honorary Collaborator
Joined: February 16 2006
Location: Pennsylvania
Status: Offline
Points: 31169
|
Posted: February 07 2011 at 12:12 |
Epignosis wrote:
Padraic wrote:
And, tell me that SS does not fit this description (from wiki)
A Ponzi scheme is a fraudulent investment operation that pays returns to separate investors, not from any actual profit earned by the organization, but from their own money or money paid by subsequent investors. |
But Social Security isn't fraudulent, so it can't be a Ponzi scheme!
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See my first post on the subject. Also, I consider the SS "trust fund" to be almost fraudulent, it's certainly a complete joke.
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The T
Special Collaborator
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Joined: October 16 2006
Location: FL, USA
Status: Offline
Points: 17493
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Posted: February 07 2011 at 12:13 |
Pat what happened with you avatar? (who is it anyway?)
You have been defaced!
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The T
Special Collaborator
Honorary Collaborator
Joined: October 16 2006
Location: FL, USA
Status: Offline
Points: 17493
|
Posted: February 07 2011 at 12:15 |
Padraic wrote:
I think there was deception done with regards to SS - I can't tell you how many older folks think that the SS check they receive is "their money", that the govt. set up a little account for them and is simply now paying them back from all SS taxes collected over their working lifetime. Some were quite surprised when I informed them how the system actually works. |
How do you explain it to them?
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Padraic
Special Collaborator
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Joined: February 16 2006
Location: Pennsylvania
Status: Offline
Points: 31169
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Posted: February 07 2011 at 12:15 |
The T wrote:
Pat what happened with you avatar? (who is it anyway?)
You have been defaced!
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?
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Epignosis
Special Collaborator
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Joined: December 30 2007
Location: Raeford, NC
Status: Offline
Points: 32530
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Posted: February 07 2011 at 12:17 |
Padraic wrote:
Epignosis wrote:
Padraic wrote:
And, tell me that SS does not fit this description (from wiki)
A Ponzi scheme is a fraudulent investment operation that pays returns to separate investors, not from any actual profit earned by the organization, but from their own money or money paid by subsequent investors. |
But Social Security isn't fraudulent, so it can't be a Ponzi scheme!
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See my first post on the subject. Also, I consider the SS "trust fund" to be almost fraudulent, it's certainly a complete joke. |
http://en.wikipedia.org/wiki/Sarcasm
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Padraic
Special Collaborator
Honorary Collaborator
Joined: February 16 2006
Location: Pennsylvania
Status: Offline
Points: 31169
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Posted: February 07 2011 at 12:17 |
The T wrote:
Padraic wrote:
I think there was deception done with regards to SS - I can't tell you how many older folks think that the SS check they receive is "their money", that the govt. set up a little account for them and is simply now paying them back from all SS taxes collected over their working lifetime. Some were quite surprised when I informed them how the system actually works. |
How do you explain it to them? |
That benefits paid out come from current taxes - when they paid taxes, they were paying for the SS beneficiaries at that time. When they receive a check now, it is I (and everyone else who works) who is providing that money.
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Padraic
Special Collaborator
Honorary Collaborator
Joined: February 16 2006
Location: Pennsylvania
Status: Offline
Points: 31169
|
Posted: February 07 2011 at 12:18 |
Epignosis wrote:
Padraic wrote:
Epignosis wrote:
Padraic wrote:
And, tell me that SS does not fit this description (from wiki)
A Ponzi scheme is a fraudulent investment operation that pays returns to separate investors, not from any actual profit earned by the organization, but from their own money or money paid by subsequent investors. |
But Social Security isn't fraudulent, so it can't be a Ponzi scheme!
|
See my first post on the subject. Also, I consider the SS "trust fund" to be almost fraudulent, it's certainly a complete joke. |
http://en.wikipedia.org/wiki/Sarcasm
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Ah, thank you. I had never actually heard of this term "sarcasm" before today. You really taught me something new!
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The T
Special Collaborator
Honorary Collaborator
Joined: October 16 2006
Location: FL, USA
Status: Offline
Points: 17493
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Posted: February 07 2011 at 12:19 |
Padraic wrote:
The T wrote:
Pat what happened with you avatar? (who is it anyway?)
You have been defaced!
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? |
Sorry Pat, but the other Pat is usually Brother No. 1 in Democratic Liberpuchea...
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The T
Special Collaborator
Honorary Collaborator
Joined: October 16 2006
Location: FL, USA
Status: Offline
Points: 17493
|
Posted: February 07 2011 at 12:21 |
Padraic wrote:
The T wrote:
Padraic wrote:
I think there was deception done with regards to SS - I can't tell you how many older folks think that the SS check they receive is "their money", that the govt. set up a little account for them and is simply now paying them back from all SS taxes collected over their working lifetime. Some were quite surprised when I informed them how the system actually works. |
How do you explain it to them? |
That benefits paid out come from current taxes - when they paid taxes, they were paying for the SS beneficiaries at that time. When they receive a check now, it is I (and everyone else who works) who is providing that money. |
Simple yet effective. I'll steal this line. I'll commit intellectual theft. And I'll educate myself more on SS.
Edited by The T - February 07 2011 at 12:21
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Padraic
Special Collaborator
Honorary Collaborator
Joined: February 16 2006
Location: Pennsylvania
Status: Offline
Points: 31169
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Posted: February 07 2011 at 12:21 |
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Everyone can just refer to me as Old Pat to eliminate confusion.
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The T
Special Collaborator
Honorary Collaborator
Joined: October 16 2006
Location: FL, USA
Status: Offline
Points: 17493
|
Posted: February 07 2011 at 12:21 |
Padraic wrote:
Epignosis wrote:
Padraic wrote:
Epignosis wrote:
Padraic wrote:
And, tell me that SS does not fit this description (from wiki)
A Ponzi scheme is a fraudulent investment operation that pays returns to separate investors, not from any actual profit earned by the organization, but from their own money or money paid by subsequent investors. |
But Social Security isn't fraudulent, so it can't be a Ponzi scheme!
|
See my first post on the subject. Also, I consider the SS "trust fund" to be almost fraudulent, it's certainly a complete joke. |
http://en.wikipedia.org/wiki/Sarcasm
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Ah, thank you. I had never actually heard of this term "sarcasm" before today. You really taught me something new! |
The wonders of private self-education?
Edited by The T - February 07 2011 at 12:22
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