Why Social Security and Medicare Comprise the Largest Ponzi Scheme In History

Unless you've been living underground for the last 5 or so years, you've probably heard all the complaints thrown around about Social Security and Medicare and their inevitable failure. Basically, the systems have gone bust. The government forced upon us this entitlement that we did not necessarily ask for that's supposed to provide us with some money when we get old. This is a brief overview of the utter failure of this unwanted entitlement.

Many people I've talked to don't even understand how this horrible system works. They seem to think that the money you pay in Social Security and Medicare taxes goes into some "account" that you have access to at retirement. This could not be any further from the truth. Essentially, Social Security and Medicare make up the largest Ponzi scheme the world has ever seen, in which the youth of today are supposed to pay for the retirement of the current elderly and the baby boomers. The problem that has been pointed out recently is the fact that life expectancy, as well as the American population, has increased dramatically. People aren't dying, and we can't afford to pay them anything. The government refuses to pay anything because they've spent it all on other things (like "bailing out" the domestic auto industry, for example). The more victims that get sucked in, the larger the entire Ponzi scheme becomes. The system takes in more than it can pay out.

Do not fear, however. The brilliant Democrats have a plan! In a nutshell, their proposed solution to avert insolvency is to dump more money into the failing system, thereby increasing its magnitude. They want to tax the youth until the economy crashes further, and, if not, they'll just print so much money to where it's not even worth the paper it's printed on.

If he answered honestly about the system, I can see President Obama shrugging and borrowing the words of Bernie Madoff: "The money's all gone."

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About the author

Tyler Williamson runs a site about basic principles of economics that are applicable to everyday life and realistic situations. His site is called Armchair Economics.

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