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Sep 14 2011

Social Security Ponzi Scheme Fast Approaching Point of Collapse

Although progressives like Willard “Mittens” Romney attack Rick Perry for referring to Social Security as a Ponzi scheme (as many have done before), the question isn’t whether this sacred pillar of statism is an unsustainable swindle, but rather how long it will be before its inevitable collapse. The answer — not long at all:

There were only 1.75 full-time private-sector workers in the United States last year for each person receiving benefits from Social Security, according to data from the Bureau of Labor Statistics and the Social Security board of trustees.

That means that for each husband and wife who worked full-time in the private sector last year there was a Social Security recipient somewhere in the country taking benefits from the federal government. …

In its latest annual report, the Social Security board of trustees reported that the federal government’s total revenue from Social Security taxes in 2010 — $544.8 billion — was not enough to cover Social Security’s total benefit payments — $577.4 billion.

Obviously this isn’t going to last long. Congratulations to those who got in on the scheme early enough to get their money back. As for the rest of us, we can only wish it were a private company running Social Security, so the people responsible could be imprisoned for fraud.

Of course, if it were a private company, we wouldn’t be forced to participate at gunpoint, so Social Security is really closer to armed robbery than fraud.

This classic swindle is also known as a pyramid scheme.

On a tip from AC.

35 Responses to “Social Security Ponzi Scheme Fast Approaching Point of Collapse”

  1. A. Levy says:

    Personally, i put Romney in the same class as John (the RINO) McLoser from AZ. Meaning? I don’t trust him! Aside from his positions on many matters which i strongly disagree with, he seems to be the favorite of Demoncrats, who are trying to push him down our throats.

    Now, why would they want to see him as the Republican nominee? Do they know more about him than we do? Do they sense his weakness? Do they know him to be the phony i think he is? If my enemy tells me which road to take, am i dumb enough to listen?

  2. hiram says:

    The only reason Mr. Ponzi went to prison and FDR didn’t? Ponzi couldn’t pack the SCOTUS.

  3. Grunt says:

    Yeah….got WAY more younger generations on SS and medicaid than there used to be.

    Heck, for much of my life I thought folks had to be old to collect Social Security…but that’s not so! Friends of the Family up North have kids who collect social security, the Adults collect Social Security and get welfare…and they can buy a house with that money; in fact, that’s exactly what they are doing.

    Meanwhile, unless you have a really good credits score (or at least in the event you don’t receive some form of Public benefit, or have all the kids by one Dad and are married to the same Dad), your chances of being able to buy a house and pay for it yourself are limited.

    While I’m at it, one of their kids has a baby (covered by the Stare), another is going to college (Loans + State) another wants to go to college…and the last of these is a violent jerk who’s as crude to his parents as he can possibly be, had the cops called on him because he’s attempted physical violence. Why is he violent? Because he gets a check (SSI) and thinks he has some right to live free with his folks (also State Supported, as mentioned), and be able to use “his money” as he desires–meaning, to go out and piss it away. Meanwhile, he’s got “friends” wanting to have him live at their home, and the Dad of THAT family is already asking about the kid’s check.

    No red flags there.

    These folks, for the most part are some of the nicest folks…problem is, they have this…mindset…everything should be freely shared and freely provided, all you gotta do is stick your hand out.

    It drives me insane. Just like the folks in Section 8 housing, they have really nice electronic items in the home when it comes to entertainment and gaming. By golly they have a computer and Internet and of course.

    The only thing they lack is the super-fancy brand name clothes and shoes and lots of tacky jewelry.

    All provided by the State.
    I don’t recall them ever sending thank you notes to the Taxpayers for that…

  4. Grunt says:

    “Stare”…LOL….is meant to be “State”.

    Yerp…one phrase the Man of the house is often heard using is “Man, I wish someone would give me something like that.” every time he sees something nice, or when we would show him something we’d recently acquired (we save for everything and just pay for it. I don’t want a credit card or anything like it so we don’t really have any debt.).

    We told him plainly that the item was saved for, worked for, and so on…he says “Can’t work, bad back.”

    Might have something to do with the days spent in front of the telly and never really exercising.

  5. Marci says:

    Mitt is a RINO and a full-on leftist. And I am appalled at Pawlenty for suddenly going on board with him. I knew Paw was an establishment GOP member, and he really showed it at the primaries—but to turn around and climb on the bandwagon of that which he called a partner in crime to the President? Down with Paw. SS is a scheme, and those who mention it are struck down immediately as the charade unravels. They are trying to switch the piles and cover their dirty little rat prints.

  6. RUKiddingMe says:

    As always, it devolves to me to point out the stupidity inherent in everything posted on Moonbattery…

    SO… what is the purpose of Social Security? Is the purpose to reduce the poverty rate among the elderly? It is wildly succcessful in that regard.

    On the other hand, if the goal is to conform to some arbitrary set of budget numbers, then I guess you have a point. A stupid, meaningless point, but I work with what you give me.

    So… answer me this: Are you willing to accept a small measure of shared sacrifice (SS taxes are tiny. I mean c’mon folks) if the result is dramatically higher standards of living for the least well-off among us?

    Most people (well, people with human feelings and such) would say “Yes, of course”. You, on the other hand, apparently think the pre-SS level of poverty among the elderly (hovering arouund 65-70%) is OK. The burden of caring for them fell on their children, if they had children, else they were simply left to their own devices, to live or die. Which hurts the buying power of the middle class, creating a spiral thatin the end affects the economy at large. Are we learning yet?

    (“But wait”, you whine, “people should take individual responsibility!”. OK, fine, but human nature being what it is… how was that going before SS? Incredibly poorly, you say? Imagine that. Its almost like we decided as a country that it was in our best interest to have some sort of safety net that kept people from abject poverty. Remind me…)

    What happens when it is your turn? You gonna cancel those checks and mail them right back to the Treasury? Someone has to go first. Might as well be you, if you actually believe the nonsense you are yammering…

    Some things are worth doing, because we are all in this together. You don’t get that. You think somehow that this is ‘every man for himself’. Which is great… until you are the man with no options left.

    Desperation, poverty, and the collapse of the middle class! Yep, lemme get some of that!

    Keep on whining folks. And remember to mail back your checks. Take the lead on personal responsibility and make a stand! HAHAHAHAHAHAHA yeah that’s gonna happen.

  7. Fiberal says:

    RUKiddingMe says:
    And remember to mail back your checks.

    As soon as Buffet and the other phony rich liberals mail theirs into the IRS.

  8. President Potemkin says:

    it devolves to me to point out the stupidity inherent in everything posted on Moonbattery

    Yeah, like the brilliant “a bunch of zygote cells” statement from the other thread…oh wait!

  9. Profiler says:

    I would love for them to pay me out completely, and make me sign a paper waiving any claims to social security benifits when I retire… I can invest better myself.

  10. Hail The Amberlamps! says:

    Wait, you don’t have to be 62 years or older to collect Socialist Security?

  11. StanInTexas says:

    RUK, I’m not getting a check. I am having money taken from my pay at the point of a gun. And when it is my turn at the top of this Ponzi scheme to get a small fraction of what I have paid in back, you can bet your sweet bippy that I will take and cash and spend that check.

    Like Profiler said, you want personal responsibility? Then give me all my money back and remove me from the program.

  12. hiram says:

    Well, RUKM, considering that by the time I get my whopping $850/month check from the SSA, it’ll just about cover a Venti Latte at Starbucks… yeah, I might not bother to cash it.

    With all the jib-jabbering the left does about “sustainability”, you’d think they’d at least *try* to do some basic math.

    This isn’t about “feelings” or “compassion”, you insufferable twit. It’s about friggin’ REALITY, and the reality is that Social Security is going to collapse. No matter what you do, no matter what you say, no matter how much you whine about ‘poverty’, it IS going to collapse. It’s simple math.

    In a Ponzi scheme, the original investors get their money from the second wave of investors. Immediately. The second gets theirs from the third, and so on. Let’s just say, for the sake of argument, that 1.75 workers actually *can* support a retiree. (laughable, but apparently you think this is feasible). And let’s start with a retiree population of, oh, say 25 million. It’ll take 43.75 million workers to support these old codgers.

    They die off, and the 43.75 million workers now retire. We now need 76.5625 million workers to support *them*.

    In ten generations, you’d need the entire current population of the Earth… every man, woman, and child, on every continent… plus about 5 billion aliens from Xenu or somewhere… to keep this going.

    It is destined to fail, no matter how noble and empathic and generous. Pointing fingers and calling us “heartless” does not change this simple fact. In fact, ignoring it & trying to keep this fraud going on is the real heartlessness… you’re dooming future generations to slavery, paying the mountain of debt that will accrue while trying to ‘save’ this pyramid scheme.

    All just so you can feel good about yourself.

    What a dick.

  13. RICH says:

    Yup. The only difference between ponzi and social security is that puting your money in a ponzi scheme is voluntary.

  14. Fiberal says:


    I think you are confusing this country with some kind of ex-Soviet collective.

    You are certainly confusing the intent of SS to keep the elderly from eating dog food with the pig trough that it is today.

    The problem is that SS does not stand on its own as a safety net for the disenfranchised elderly. More than 60% of the U.S. budget goes to individual entitlements in one form or another and this includes SS.

    This only happens by forcibly taking a lot of money from one man and giving it to another.

    It is not that people wouldn’t be willing to pay something (conservatives are a lot more charitable than liberals) but as we see to day, the government is completely wasteful, corrupt, has no stopping point and is being run by imbeciles.

    The other problem is that half the people in this country don’t pay a dime in taxes of any kind.

    RUKMe: Take the lead on personal responsibility and make a stand!

    Okay, if you are such a responsible individual then do what you are advocating for everyone else and write out a check to the federal government to enhance your contribution to SS.

    Don’t forget, BO needs another $500B stimulus money.

    If fact, what you really want is government to force other people to do something that you think is correct.

    But you have that now. And you’re still posturing to still show off how wise your counsel is and how superior your moral position is.

    We are at a point in taxation in this country where only a liberal or an abject fool would say we need to pay more. And only a liberal or a someone who forgot to duck while subway surfing riding would need to say that we should continue paying anything at all to what we have today as a government.

    BTW how much more did you say you wanted us to pay?

  15. RUKiddingMe says:

    Profiler –

    You are the one, eh?

    If everyone dumped their retirement into the stock market when W proposed it… say in 2007-2008… how many Americans would have lost it all already? Sophisticated investors with powerful supercomputers and advanced software got crushed; do you really think that the average dumbass is capable of investing in a safe and reasoned manner for him/herself?

    I think that betting the future ability to feed, house, clothe, and medicate ourselves, as a country, should not be the sort of thing we bet on a horse. Especially a 3-legged horse like the US stock market. There are still bubbles all over the place – student loans, internet companies are overvalued again… look, this is not something that you can pick up and handle as an individual. You think you can… fine. But the day you fail… that’s it. No medicine for you. No food for you. And you are multiplied by tens of millions.

    Sounds like a winner to me. “C’mon Papa’s Moustache in the 3rd!”

    You disagree… and I am thankful that you are not in a position to make decisions.

  16. Resident Loon says:

    I think that betting the future ability to feed, house, clothe, and medicate ourselves, as a country, should not be the sort of thing we bet on a horse. Especially a 3-legged horse like the US stock market.

    If the US Stock market is “a 3 legged horse” then Social Security is a dead horse that has been decomposing for 20 years.

  17. President Potemkin says:

    If everyone dumped their retirement into the stock market when W proposed it

    You completely misrepresent what was proposed. Only a small percentage would have been allowed to be put into other investments, and it was targeted to those under 40 years of age. Oh yeah, it was completely voluntary.

  18. Profiler says:

    @ RUK WOW!!! Thanks for assuming… I guess you’re right… der di der… I guess i’ll just go back in and marry my sister yep yep yep… I’m shore glad I has gots someone like you to make up my mind for me…

    you are a true cockmaster…

  19. RUKiddingMe says:

    “We are at a point in taxation in this country where only a liberal or an abject fool would say we need to pay more. ”

    You do know that this is around the lowest taxes have ever been, anywhere, ever… right? What is the top marginal tax rate in … any other 1st world country?What was the top marginal tax rate in the US, from its inception until now? Go look it up. I’ll wait right here for your apology for not knowing what the hell you are talking about.

    So… you are saying that this, right now, is the best it has ever been in terms of our economic security and success? And you want even more of what you see right now? Fewer programs, fewer options, more poverty, fewer jobs… but the top 400 richest guys are sure as shit getting richer! Now that’s what I think of when I think of America!

  20. RUKiddingMe says:

    “If the US Stock market is “a 3 legged horse” then Social Security is a dead horse that has been decomposing for 20 years.”

    …and yet, nobody has ever missed a check. Guess you think dead things can walk and talk, eh? (Lemme guess… you’re also keen on jesus!)

  21. President Potemkin says:

    In Chicago, dead people vote all the time.

  22. StanInTexas says:


    Are you serious? You think Social Security is fine because no one has missed a check?

    WOW? Nothing for me to add to that!

  23. Dupree says:

    At least I will get something from the stock market. Social Security will crash long before I am ever eligible for payments, yet I will pay for it until it does.

  24. President Potemkin says:

    Social Security is structured from the point of view of the recipients as if it were an ordinary retirement plan: what you get out depends on what you put in. So it does not look like a redistributionist scheme. In practice it has turned out to be strongly redistributionist, but only because of its Ponzi game aspect, in which each generation takes more out than it put in. Well, the Ponzi game will soon be over, thanks to changing demographics, so that the typical recipient henceforth will get only about as much as he or she put in (and today’s young may well get less than they put in).

    —Paul Krugman, Circa 1997

  25. hiram says:

    Don’t even bother, guys. This is just another perpetually indignant troll with no original thoughts, nothing to add that’s even remotely new, and retarded math skills to boot. Just a smug attitude and a mush-filled skull.

    I can explain how a pyramid scheme works to my cat, and see more comprehension in his eyes….

  26. Fiberal says:

    RUKiddingMe says:
    You do know that this is around the lowest taxes have ever been, anywhere, ever… right?

    Right. On average the personal income tax burden is low bc 1/2 the receiving population pays no income taxes while the top 10% shoulder almost all the tax burden.

    Seriously though, the gist of your diatribe was that SS taxes …and more thereof are needed and that conservatives are too dense and selfish to pay up. But since you left off that wonderful position to go to the next liberal talking point, I will educate you.

    The core of the problem, or at least the problem for people who work and pay these taxes, is the corporate tax rate.

    We currently have about the highest CTR in the world at around 36 – 38% Even socialist countries like Canada have cut theirs back to ~25%. As has Japan.

    This would create immense wealth. It’s just that the U.S. that can’t bring itself to allow significant corporate tax relief either for companies doing business in the U.S. (trying to) or for companies that are sitting on 1.5 trillion revenue overseas, since we’re fighting a culture war.

    But lift the corporate tax rate and you’d have enough jobs and opportunity that the poor wittle downtrodden you feel compelled to defend would not need your money.

    I mean, you are writing a check to the government to help the SS fund. Right?

    If we were having a serious rather than a liberal-stupid discussion, your obligation after some $6.5 Trillion and climbing, spent since the Johnson “war on poverty,” would be to justify how more taxes are would be economically, much less ethically, rational.

    (BTW, excellent liberal sneer response…that’s always a give away that you guys have nothing.)

    If you want

  27. Fiberal says:

    hiram says:

    Don’t even bother, guys.


    I do it bc I’m still optimistic enough to believe that there are enough fence sitters out there who come by, read these exchanges and say to themselves,

    “Wow…I didn’t realize that.. Well that does it; no way I’m gonna donate my brain to liberalism.”

  28. angryK9 says:

    Who’s a cute little blogger. You are RUKme. Yes you are.

  29. Fiberal says:

    Gettin late RUKMe…..just got nothing do you?

    Rukkin’ dumb-as-dirt liberal.

  30. AC says:

    Keep on whining folks. And remember to mail back your checks. Take the lead on personal responsibility and make a stand! HAHAHAHAHAHAHA yeah that’s gonna happen.

    I’ve paid several hundred grand in FICA over the years.

    I’m not sure I’ll ever be paying it again.

    I would renounce every cent of benefits if I never had to pay it again.

    I saved for my own retirement through thoughtful investments in real assets. Needless to say Helicopter Ben has multiplied my wealth severalfold.

    The system is fundamentally set to fail and it’s entering a period of demographics running counter to what is needed to keep it alive.

    The taxpaying workers are having fewer children (0 here) and the taxpayers themselves are paying in less.

    What you don’t understand is that, from a mathematical sense, an underwater Ponzi is unsalvageable. The system cannot be unwound without somebody taking a massive loss, as the excess gains have already been removed from the system.

    One of three things can happen:

    1. Current retirees are slashed into poverty, making up for the money their generation allowed to be squandered, leaving future workers with a just ratio of payments in to payments out.

    2. Current retirees live high on the hog despite political malfeasance, with future generations getting less in benefits for more in taxes, in effect paying off the bad behavior of earlier generations.

    3. Hyperinflation. Everybody gets paid every dime they’re owed and it still doesn’t matter.

    Guess where fiat currencies always end, especially in long-term secular contractions among world superpowers.

    Why would I give up a hell of a lot in future benefits (per the current formula) if I could opt-out of taxes I might never pay? Because the value of fiat converted to hard assets before the financial reset will be worth far more than Bernankebucks when we make it to the other side.

  31. hiram says:

    AC, I think you’re probably right. Take into account though, that SSI payments are tied to inflation… that’s why they’ve been doing the craziest of ENRON accounting to understate inflation for the last several years.

    Simply as a student of history, I *know* we’re headed for a hyperinflationary depression that’ll make the 30’s look like the 20’s. With the monkey of SSI on the economy’s back, it’ll just accelerate at a more rapid pace, until it doesn’t matter how many zeroes are on your gubbermint check because no one accepts dollars anymore.

    I wonder what the new troll will pay the old people with then? Happy thoughts? Protest placards? I hear they can be burned for heat…

  32. FreedomFox says:

    Let’s see, using the numbers available here and from the government I’ll go ahead and crunch some numbers and see how this works out.

    The social security tax rate is 10.4% with a maximum of $11,107.20 (10.4% of the $106,800 cap on what is taxable towards SS). According to the US Census, the median household income in 2009 was $50,221, of which $5,222.98 went to Social Security. Assuming a minimum wage of $8/hour and defining “full time” as 40 hours per week, the annual income of a full-time minimum wage worker would be $16,640, of which $1730.56 would go to SS. Due to the nature of minimum wage jobs these will drastically outnumber the higher pay scales, dragging down the average, but I don’t have the time or motivation to factor that into my calculations so I’ll simply average these three values together.

    Using those numbers, the average SS tax is $6,020.25. At a rate of 1.75 workers per beneficiary, SS will incur a deficit if it provides any more than $10,535.43 on average, or if the worker:beneficiary ratio next cycle falls below 1.75 plus the percent increase in payments. For example, if they increase payments by 3% every cycle, the next generation would need 1.78 workers for each in the previous.

    As has already been pointed out, no matter how much you tax for for SS, because it is adjusted for inflation it will always be promising to give out more than it took in previously and thus will always require a worker:beneficiary ratio greater than 1:1. Unfortunately that makes it a pyramid scheme and exponential growth inevitably sets in until it collapses. If there are any beneficiaries that do not go through a worker stage it only makes the problem worse, as they are withdrawing but not contributing.

    The only way SS was able to “work” previously was that they set its benefit age well above life expectancy, thus it was able to keep the worker:beneficiary ratio high because the majority of workers never expected to live long enough to cash in. In other words, like a casino owner, the government originally rigged Social Security so that the house always wins. Now however, every worker is almost guaranteed to become a beneficiary. This creates an exponential growth pattern on the beneficiary side that turns SS into a Ponzi scheme that will self-destruct if certain demographics shift in the wrong direction. For example, a rise in unemployment or a fall in birth rates causing the growth in workers to be lower than the ratio needed to maintain payouts. Not like that will ever happen right? Unemployment rising and birth rates falling? Who ever heard of such a thing? /sarc.

    The only way to “save” SS is to make sure people can’t count on it. As long as it’s an entitlement that everyone and their dog expects to collect, its collapse is inevitable.

  33. Fiberal says:


    The government has a plan to save SS.

    Namely: absorb all of Mexico.

    Then we’ll have millions of Mexicans so that the work:beneficiary ratio will go to 3:1 from 1.75:1. Or it could be the other way around — 1:3.


    Any questions?

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