Really horribly managed programs.

That's like assuming all companies that lose money are ponzi schemes because they take investers money and never return it. A ponzi scheme must be an intentional act of deception to take money and not actually give a return.

I don't think we're there yet or really will be with those programs you described. Are they terribly managed and set up? Definitely. Can they be reworked so that they provide the good that they are intended to? I believe so. The questions are how, when, and who's going to do it.

I Wear Pants;535409 wrote:Really horribly managed programs.

That's like assuming all companies that lose money are ponzi schemes because they take investers money and never return it.

Good post, IWP. I copied the above to address a couple points:

1. Ponzi schemes are ILLEGAL. People go to jail for running them. Bernie Madoff is the quintessential example. The jails are full of them. Yet...SS and Medicare are "legal" Ponzi schemes. This has to end...soon.
2. If a business survives the legal scrutiny of operating as a Ponzi scheme, then the ultimate penalty is bankruptcy and liquidation. Is that the ultimate penalty for SS and Medicare? If we don't get their solvency under control real soon, it will not be there for people getting ready to retire.

Well I mean, I don't think SS and Medicare are what we're calling Ponzi schemes or are/should be illegal. I just think that their current setup isn't good for anyone. Drains cash and doesn't serve the people they're supposed to help very well. It does need to change. I've sadly not heard any good suggestions or ideas by people who can do something about it though.

I Wear Pants;534764 wrote:Social programs aren't (well they could be I guess) Ponzi schemes.

To the extent they begin immediately with benefits not paid for/earned, they are Ponzi schemes. SS being a pay-as-you go system is a perfect example. It relies on an ever growing working base. You're seeing the US, Japan and other developed economies struggling with such programs as the beneficiary base expands against a shrinking work base.

A Ponzi scheme is basicallly taking money from new investors to pay returns to early investors, and citing those "returns" to entice more investors. Sound a lot like SS, except we are forced to invest. A pyramid scheme is more accurate, and a pyramid scheme is a type of Ponzi scheme.