via Wikimedia Commons

Social Security is a Ponzi scheme

The inevitable collapse of America’s greatest scam

WIKIMEDIA COMMONS | PHOTO COURTESEY
These cards which provide security for baby boomers mean destruction for younger generations.

One of the most under-addressed and ignored topics in America’s political psyche is that of Social Security and the just how disastrous it can truly be. 

Social Security, for those that don’t know, is a government-run support system that’s been in place in the United States since 1935. The purpose of the program is to give the retired and disabled the ability to keep themselves out of poverty with money taken from payroll taxes.

 In theory, American workers who pay into Social Security via their taxes will eventually receive financial benefits from the pot of accumulated Social Security payments when they’re eligible after retirement. 

In practice, however, Social Security has revealed itself in recent years to not only be a financial failure, but also a massive Ponzi scheme directly harming the youth of America. The young people of America, ourselves included, should take note of Social Security and the effect it has on us, given that we currently pay into it with our tax dollars. 

Ponzi schemes are a form of investment fraud made popular by its namesake Charles Ponzi in the 1920s. They work by promising high reward with low risk in order to lure in investors. Once enough people invest, the schemer pays back the promised investment with new income from other investors drawn into the scam. 

For example, a Ponzi scheme might promise investors that if they invest 100 dollars into some new and low-risk venture, they’ll triple their money in a year. Once a handful of first investors are suckered in, the schemer skims some of the investment money for him or herself and then attempts to trick new investors to put their money into the scheme in order to pay back the promised 300 dollar sums to the original investors.

 Inevitably, Ponzi schemes always collapse because they require a constantly growing number of investment dollars. The second the investment numbers dip, the schemer is unable to pay back all the earlier investors and the scheme ends up collapsing.

If this sounds eerily similar to Social Security, it should. Social Security operates on the same investment model. Young Americans are forced by the government to invest a certain portion of their money into Social Security with the promise that they’ll be paid back upon their retirement. 

These younger “investors”, in this case, Gen-Zers, Millenials and Gen-Xers in the workforce pay for the benefits of retiring baby boomers. 

Unfortunately, just like with any other Ponzi scheme, the whole thing is eventually going to fall apart. The difference this time is that the government doesn’t actually have to “invest” or keep the money in some sort of vault or lockbox.

I know this all sounds like I’m babbling about boring economic jargon, but bear with me because the way the government handles this money could have a massive impact upon your life.

Ignoring all the other overfunded programs being run by our government, Social Security itself has been in the red since 2010. This is despite the constant denial of its problems by several politicians, such as the Obama administration’s Budget Directo, Jacob Lew, who said in 2011 that Social Security is “entirely self-financing” (which is a blatant lie). 

That means that for the last nine years more Social Security money has been spent than what’s been taken in. According to the Congressional Budget Office, in 2010, Social Security ran a deficit of 37 billion dollars.

In 2011, that deficit grew to 45 billion dollars. The most recent full year of spending, 2018, showed that Social Security ran a deficit of 79 billion dollars. According to CBO projections, this astronomical deficit will swell to 118 billion dollars by 2021 before becoming insolvent by 2035.

How could such an inefficient and bankrupt program exist? Simple: the U.S. government has the financial prowess of a toddler. The national debt is currently 23 trillion dollars, the highest it’s ever been in our country’s history, and it’s showing no signs of slowing down. 

The last time the U.S. had no federal debt was in 1836, more than 150 years ago. Our government hasn’t run a budget surplus since the Clinton Administration. 

Obviously, Washington doesn’t know how to actually handle the budget efficiently. If he did, we wouldn’t be in mountains of debt and the budget would be spent efficiently. 

Despite all this, the government still insists on running a giant, idiotic Ponzi scheme that they constantly defend and explain away while all our hard-earned tax dollars are being sunk into a bloated military budget, ineffective social programs and the payrolls of overfunded bureaucrats.

I know I’ve been sounding long-winded and boring in this article, so I’ll cut to the chase and summarize the point I’m getting at: the young people of America are being schemed forcefully by their own government into a program that’s not only incredibly costly, immoral and indebted but on the brink of collapse. 

Politicians in Washington refuse to address the problem because doing so would be political suicide. The media ignore it because it’s far easier and profitable to devote hours of their air time to covering President Trump’s newest scandal than to address the massive, catastrophic tax-funded elephant in the room.

Those who should be worried about this the most, however, are us, the younger generation. Our money is being forcibly taken by the government to be funneled into this broken and bankrupt system. Younger people are having fewer and fewer kids, while Baby Boomers are retiring at a record pace. 

In other words, the number of newer investors is shrinking while the older investors are reaching the point when they need to be paid back on their promised investment. Hopefully, Washington and the American public can wake up to this lie we’ve been fed and solve the crisis before it’s too late.

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