Monday, March 16, 2009
Another Victim of the Ponzi Schemers: The IRS
Who said nothing good came out of the investment banking Ponzi schemes? It's not often that the world's largest thief finds itself on the wrong end of the looting relationship. Of course this minor "silver lining" is only superficial since the damages will be passed along to the taxpayers and those holding American dollars.
It is ironic that the federal government is prosecuting crooks like Bernie Madoff for his alleged Ponzi scheme when it is the government who operates the most expensive Ponzi scheme the world has ever seen: social security.
Writes Bill Anderson:
While Madoff has managed to mangle at least $50 billion, there is another Ponzi Scheme with trillions in unfunded liability: the U.S. Social Security System. No matter how many times Paul Krugman declares that SS is safe and sound, it is not.
Most people don't realize that SS actually is a "legal" Ponzi scheme, made legal because the government has declared it so. Nonetheless, the principle of SS is that of the chain letter in which people pay in, other receive the benefits, and it works only as long as others are there to pay in more money.
At the beginning, the ratio was about 20 payees to one person receiving benefits, but the numbers have changed to where it now is about 3 and 1. This is an ominous trend, and I suspect that in the end, the government will simply print the money, as it has done in other situations.
So, my recommendation is for Obama to appoint Madoff to head the SS Administration, as he already is experienced in putting together Ponzi payments.