Tuesday, September 13, 2011
Is Social Security a Ponzi Scheme?
Due September 19, 2011. What is a ponzi scheme? Why does Rick Perry think SS is a ponzi scheme? After reading the article, what do you think??
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Ponzi schemes depend on garnering an ever-increasing pool of new investors to pay out returns to prior investors. Rick Perry thinks Social Security is a ponzi scheme because the new investors, who are the working-Americans, paid out returns(which is Social Security benefits) to prior investors, who are the retired/disabled people at this time. According the definition or the scenario provided, SS might seem to be a ponzi scheme. However, after reading the article(especially the graphs), SS is definitely not a ponzi scheme because GDP is not growing continuously. Whether Rick Perry does not know what a ponzi scheme is, or he is just trying to fool people for political purposes, people should all be aware of this issue.
ReplyDeleteOk, so I just found out that the headings are links so thats definitely helpful.
ReplyDeleteIn regards to social secrurity being a Ponsi scheme I would have to disagree with Xiaowen, primarily because of a ligitimate sounding blogger on the link. He said, and I quote...
"Hate to quibble, M.S., but a Ponzi scheme with logistic growth or growth tied to an exogenous variable is still a Ponzi scheme. Your graph shows a scheme with growth as x^n, but the graph above shows a clearly logistic set of payment increases corresponding with the baby boom demographic bulge. As evidence, your second graph doesn't show much."
In other words, the graph shown by M.S. is sketchy and doesn't accurately show the relationship between a ponzi scheme and SS.
P.S.
It would definitely be in everyone best interest to look at the comments on the link because they all disagreed with M.S.' statements, and if M.S. can't get a single economist to agree with him he obviously needs to check himself before he recks himself. No swag for M.S.
A Ponzi scheme is an investment operation in which investors are paid money from money paid by later investors. Rick Perry thinks that Social Security is a ponzi scheme because he thinks that the money that the current Americans are paying is going towards paying those that are already retired. After reading the article, I think that Social Security could possibly be a ponzi scheme; however, it most likely isn't. Since the start of social security individuals who have retired have received payments. And the money doesn't "run out". Clearly, as the article says the problem is that by calling it a monstrous lie we are just hurting the system. I think people should continue to pay Social Security and expect to receive payments once they are retired.
ReplyDeleteA ponzi scheme is an investment that relies on an increasing amount of investors that pay out returns to prior investors. Its purpose is to persuade people to give in their money, while their money is not given to the purpose they agreed to. Rick Perry thinks Social Security is a Ponzi scheme because he thinks Social Security presents multiple problems in the long run. He doesn't believe that at the current rate of taxes, we cannot provide the monetary benefits that Social Security promises to give citizens. I do not think that Social Security is a Ponzi Scheme. The article clearly points out that Social Security has been in operation for 75 years and has clearly been a functioning government-run program. Social Security is not trying to trick you into anything. It is actually assisting those people who are retired, older, disabled etc. We must keep the program as it is needed for the benefit of future generations of American citizens.
ReplyDeleteA Ponzi scheme is where a group of investors invest their money into a fund and later on receive their money from another group of investors. Rick Perry thinks Social Security is a Ponzi scheme because he believes that the workers who are being taxed are being promised benefits that he believes will not be fulfilled. My opinion is that Social Security is not a Ponzi scheme because like Zoey said, it has been operating for 75 years. The people who have their rights to Social Security have been receiving their payments every month. I think that Social Security should continue running because it has been supporting the retired or disabled people. Social Security may also be retired people’s only source of income which they would have to live off of.
ReplyDeletehttp://www.sec.gov/answers/ponzi.htm
ReplyDelete"A Ponzi scheme is an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors."
Rick Perry thinks SS is a Ponzi Scheme since people are being promised that they will get a consistent payment back when they retire and is being questioned that people will get underfunded. Basically people think since the population is aging, the SS will fall short.
It is also said that the SS system is “borrowing” money from the trust because it holds a large surplus of Treasury bonds.
Although people say that it is a Ponzi scheme it has been a source of assisting in the retirement of the elderly, assistance for needy families, unemployment benefits, and disability insurance. How would people be able to afford anything? Part of your salary goes to Social Security and goes into this program so when you retire you are set. it is kind of like a form of Socialized healthcare
http://lifeinc.today.com/_news/2011/09/08/7670909-of-social-security-and-ponzi-schemes
A Ponzi scheme is an investment that depends on an "ever-increasing pool" of new investors to pay returns to prior investors. Rick Perry uses this definition in order to place Social Security into this category. He believes that the taxes placed on workers (new investors) are transferred to those who receive SS (prior investors). At face value, it may seem that Social Security may be a Ponzi scheme, but there are other factors that must be considered when labeling it so. The fact that there is consistency among the payments of benefits to those who receive SS clearly indicates the stray between the two. However, after reading the article, it seems as if M.S. focuses on the purpose of why Rick Perry attacks SS rather than to defeat his opinion.
ReplyDeleteA Ponzi scheme is a type of investment that is constantly seeking out new investors to pay the current investors instead of paying with actual profit. Rick Perry thinks that social security is a Ponzi scheme because as the baby boomers begin to start collecting social security, the workers are going to be paying taxes for them, though the benefits of social security may not be able to be met. After reading this article, I believe that Rick Perry is wrong to be calling social security a Ponzi scheme. While it's true that social security costs will stagger as baby boomers retire, these costs can be accommodated by raising the social security tax. Also, Social Security has been around for years, and it has continually fulfilled its requirements for the retired citizens who collect it
ReplyDeleteA Ponzi scheme is type of investment that involves the payment of purported returns to existing investors from funds contributed by new investors. Rick Perry thinks Social Security is a Ponzi scheme because people are being taxed for benefits that may not be fulfilled. Perry may make some good points but I think he is incorrect. The social security system is essential to older people and is an honest way of receiving money and benefits once out of the work force; labeling it a Ponzi scheme makes it seem otherwise.
ReplyDeleteA ponzi scheme is investing that solicits new investors by guaranteeing to put their money into secure opportunities that will promise a high return with very little risk.Instead of investing the money into legitimate activity, the fraudsters will use the money for personal expenses, therefore leaving the investors with little or no money in return. Rick Perry believes that social security is a ponzi scheme because we are currently taxing workers for benefits that they will later on recieve. He believes that the system will not be able to meet those commitments later on. In my opinion, social security is not a ponzi scheme. When workers are being taxed on their paychecks, it is going into something that they will be grateful for in the future after retirement. For years and years, people have been getting payed back the money that they have dished out. There is no reason to believe that the workers will not get their social security benefits in the future.
ReplyDelete