From this title you're probably assuming the recently discovered Ponzi scheme run by Bernard Madoff. However, that's not the case. Since family is visiting there really is only one topic of conversation in my house to bring about holiday cheer: Politics. So, as much as I desire a reprieve from all things political until Obama's inaugaration, I find myself lured into the political realm. I still enjoy reading about business happenings as well, so this is how my thought process evolved last night.
Me, "Wow, what a scam Madoff pulled. How did people not notice? Sure, he was one consistently deemed one of the top Wall Street investors, but someone (*cough* SEC *cough*) must have noticed something."
Me, "It's craziness I tell you, craziness... which is why I will always tightly manage any portfolio I have regardless of size."
Family, "So, government... blah blah blah... Obama is savior... blah blah blah... Palin is the biggest idiot every nominated/no she's not... blah blah blah... what do you think about the Caroline Kennedy pursuit of the New York Senate seat?... blah blah blah...there's on way civilized people will let stupid people starve to death... But there's no way Social Security is going to be fixed with this economic debacle..."
Husband, "You know that social security 'investments' only average a return rate of about 1-2%... whereas even the most conservative funds in the market over time average..."
Me, "Well, of course we can't manage our own social security money, that's not the point... Wait a minute - "
*Lightbulb flash*
"Social security is the biggest Ponzi scheme EVER!!!"
*Shake my head until I'm dizzy*
Husband, "You're right!"
Me, "Good grief... I'm just like those last investors... paying in to support those ahead of me only for the fund to go bust when it's my turn... thanks American government 'safety net'!"
"Does that mean I get to sue the government when there are no social security funds left and I reach retirement?"
If only...
The perks of being a member of Generation Y.
*Update* I realized after re-reading this post that it might look as if I don't actually understand fully what a Ponzi scheme is (as I related it to Social Security.) Therefore, I would like to clarify by saying that many working Americans view Social Security to be an investment of sorts for their future... you contribute now to support the generations above you, but believe likewise that the next generation will support you. Some people also don't understand that their Social Security contributions are not in fact put into an investment fund where a certain portion is set aside specifically for them. This is where the problem lies for the Gen Yers and maybe even some Gen Xers... we're paying in thousands of dollars over our lifetime and will most likely get nothing in return. At least with other taxes you can argue that we benefit from the public works, institutions of law and justice, etc. Not so much with Social Security. And it's mandotory... Your choice as a taxpayer: Ponzi Scheme where you're the loser or a hefty fine and potentially jail time. Even Madoff points out that people sought him out to manage their investments and he's looking to be one of the biggest crooks of our time.
All this to say, we need to reform Social Security [immediately] and unfortunately that's less likely to happen than the complete revitalization of Detroit in the first quarter of 2009.
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