Posted on 08 January 2009.
In the wake of the Madoff disaster, I have read some minor op-eds citing Social Security as the biggest Ponzi scheme ever.
Really?
Honestly, I would think that this kind of talk might not warrant coverage from CNBC, whose article “The Real ‘Mother’ of All Ponzi Schemes” likens our national safety net for seniors and the poor to losing your money in fictitious investments.
I quote:
We feel bad for the people who came late in investing with Bernie Madoff and got burned when his Ponzi scheme fell apart. Now, I don’t begrudge anyone their social security benefits, but I also don’t want my generation to be feeling sorry for itself when our time to collect comes around and the money isn’t there.
Mitchell Zuckoff offers his retort at CNN via Social Security a Ponzi scheme? No way!
P.S. For those following the Madoff scandal — as I am, shamelessly — I would commend the Boston Globe article about the chief whistleblower Harry Markopolos.
About Paul Griffiths
Paul has been CEO of MedTouch since April of 2007 and, prior to that, held the position of COO. As a co-founder, he has helped set the vision for the company from its inception. Paul is an active speaker in the healthcare marketing community. In addition to the dozen webinars MedTouch presents each year, Paul can be seen and heard giving lively talks around the country about helping healthcare organizations succeed online: from New England (NESHCo), to Tennessee (TSHPRM), Florida (FSHPRM), and Las Vegas (Annual Healthcare Internet Conference).
Prior to MedTouch, Paul managed online brand experiences for a variety of for-profit and not-for-profit organizations. He has over 15 years of combined experience in online commerce, interactive marketing, experience design and content management solutions. Most notably, he directed the consumer-facing channel for the now defunct Send.com, an online gift delivery network that raised $45 million from such VC luminaries as Greylock, Highland Capital, Benchmark and Charles Rivers Ventures in the late 1990s.
Paul earned a Master of Arts in Creative Writing from Boston University, and a Bachelor of Arts in Creative Writing from Sarah Lawrence College.
When he’s not traveling across the country to visit clients or to speak at healthcare conferences, Paul runs a humanitarian non-profit with his wife. He’s thrilled to finally have a yard for his dogs and two boys, and often daydreams of spending a summer in Iceland.
Agreed, a social security system is that, a social security network, not an investment mechanism. You can think about it this way to make it really simple. I pay for my folks now and I would hope that when I am old my children pay will for me. That is how this works. Is that a Ponzi scheme? Is God’s last name Maddof? no. The fact that this generation is not going to collect the same benefits that the old generation is collecting now is exactly the analogy of you having less or no kids after taking care of your parents… what will you get? less… or nothing at all. That is what is happening now, so are you “Ponzi-Scheming” yourself if you do not have kids? The answer again is no. With this I am not saying that the way the social security system is working now is good (know as pay-as-you-go), what I am saying is that it worked when the structure of the population was that of a pyramid. Now it is not, and it is no longer sustainable, but that does not imply that is a Ponzi Scheme.
re: Erick Ramos Murillo’s comments—
Erick, the average “white woman” in the U.S. has 1.71 children per lifetime. That’s not enough to even replace the previous generation. Social Security has sucked in enough people to think that someone else’s children will take care of them. And then we (as a nation) have the audacity to dump on illegal aliens, when it is many of them who are both supporting us as well as generating enough more children so we are currently at about exact replacement.
At 2.1 children per woman per lifetime OVERALL, we are static. Our economy can’t grow, without immigrants (legal or illegal – and we don’t allow enough “legals” in to grow enough).
Even at 2.1, our economy will dwindle. This is likely a much larger contributor to the economic depression we are sliding into as a nation than most anyone supposes!