The Worlds Largest Ponzi Scheme
December 15, 2008 9:32pm CST
I am sure everyone has heard about this guy name Bernard Madoff and his Ponzi scheme. Sure what Madoff did was horrible but it pales in comparison to the worlds largest Ponzi scheme, Social Security. Social Security uses the same principles as a pyramid or a Ponzi scheme does. Social Security depends on you paying for someone else's Social Security then when you go one Social Security someone will take care of you, hopefully. Of course the Feds take there cut just like Mr. Madoff did.
16 Dec 08
Y'know, I've never thought about it in that way. But you are right, social security and state pensions are paid out of money that is being paid now by taxpayers. Lets hope that the governments ponzi scheme does not collapse or we'll all be on skid row singing "Can you spare a dime"
• United States
16 Dec 08
I'm not so sure it's a ponzi scheme but you have a very interesting perspective that is worth my consideration. What I do know is that the system is broken and social security is almost broke as a result. What may have worked 20 years ago does not work today.
• United States
16 Dec 08
Ponzi schemes are remarkable in their appeal to the victims. The victims of Ponzi schemes will even beg the criminal to take their money! In the case of Social Security, the victims will even chose the criminals to be their leaders and feel ill will towards anyone speaking the truth about the Ponzi scheme. I have a personal experience with a Ponzi scheme. This goes back to the late 1980's. A friend of mine who knew I've had a lot to do with investments asked me to a meeting he was going to attend concerning a special investment opportunity. He wanted my expert opinion before putting any money into this 'opportunity'. Long story short is this. I got into a shouting match with the crook. I explained to the about 25 people present it was an illegal scam and why. Only my friend listened. So, I'm thinking maybe 4% of people have enough objectivity to evaluate an emotionally laden extreme greed situation. Extrapolate that to our nation and think of what 96% of people must think when we warn them about Social Security! I've saved the most important point about Ponzi schemes for last. The perpetrators will pull this scam on their dearest friends. It is what makes it work. When I tried to explain to the 25 the illegality and that the man was a criminal, no one would listen because many knew the man for years. One guy told me out right, "I've known him for years. He is my friend. He would not do that to me!". Popular politicans are just like that guy running that Ponzi scheme. What happened in the case I related? I informed the State's Attorney General. An investigation was started. The crook fled the country with a reported $4 million. Ponzi schemes are evil and work because there are evil people good at looking good who can screw over their friends who just don't think there are people that evil.
16 Dec 08
hi there gewcew23. i agree that Bernard Madoff staged one of the worst Ponzi schemes in history, along with Charles Ponzi's criminal schemes. there are also a lot of scandalous Ponzi schemes running all over the world, mostly under the disguise of claiming as a network marketing or multilevel marketing company. in the end, they're still fraudulent companies that rip investors' money off. as for Social Security, even if the Fed (or my country's Social Security System, which obviously is 101% corrupt here) is corrupt, it probably does not qualify as a Ponzi scheme. although Social Security's structure is like a Ponzi scheme (contributors are also investors, and they get returns from the investments done by Social Security from their contributions), if i recall correctly, the contributors do not get extraordinary profit in just a short period of time. this is one of the main features of a Ponzi scheme: investors are lured with the fact that they can get extraordinary profits (e.g., 10% per day, 50% per day, 100% per day, or even higher) in just a short period of time. the reason why Ponzi schemes fail is that investor market eventually saturates, and the scheme could not provide extraordinary returns anymore. thanks and more power to you! =)