Another’s use of “Ponzi Scheme” — 9/12/2012

  1. If you [JDP] want to apply your own definition of Ponzi scheme rather than applying the term as commonly defined I suppose you can call Social Security a Ponzi scheme. Personally, I think that is misleading and only serves to diminish or discredit the point you are trying to make. On a broader scale, this is another example of the need for more intellectual honesty and accuracy in our public discourse.

    POSTED MONDAY SEP 12, 2011 21:19 #
  2. chrisrobling
    Member

    OK, so some of us, on this thread, now, after scores of posts distinguished by their needle-pinning truculence and tendentiousness, say, ‘we want intellectual honesty.’ Having read literally hundreds of attacks and characterizations here, several of which have been directed at conscientious public servants who happen to disagree with the adopted norm here, i feel justified in noting i will believe it when it is said to all, and not just to those who question the established liberal order. The heart of intellectual honesty is the ability to converse and respect — if not credit — one’s opponent’s argument while applying the same standards to both.

    That said, here is a wikipedia definition of “ponzi scheme”:
    A Ponzi scheme is a fraudulent investment operation that pays returns to separate investors, not from any actual profit earned by the organization, but from their own money or money paid by subsequent investors.

    By definition, SS is not “illegal,” but that hardly distinguishes it from “fraudulent.” The truth is SS was started with decent social welfare intentions. It was also started with key elements and guarantees that, as they have become burdensome or inconvenient, have been tossed overboard (please see above).

    In government lingo, it started as a tax-advantaged earned benefit program. The tax advantages are almost gone, and it is now insidiously — and very wrongly — called an entitlement program.

    No longer tax-advantaged, instead taxable, and no longer an earned benefit, instead an entitlement. What are we talking about? If FDR had proposed what we have today, would it have passed?

    As for the Ponzi descriptor, i wonder what specifically JDP cites to thwart its applicability. Once the demographic worm turned, and the trust fund cash was raided in exchange for I-O-U’s, leaving cobwebs and scrip in the lock box, i think it is fairly descriptive to call the cash-in / cash-out mess we now confront a Ponzi scheme. The benefits are paid only by new contributions. Left as-is, it will fail. What’s the precise difference between this and Bernie Madoff, apart from its statutory basis?

    And JDP, since you feel empowered to implicate another’s honesty, allow me in that spirit to enjoin you to do your best to remain ‘honest.’

    POSTED MONDAY SEP 12, 2011 21:51 #
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