Wednesday, January 22, 2020

Paul Krugman Admits Social Security is a Ponzi Scheme

Charles Ponzi
Well, New York Times columnist Paul Krugman is too much of a wimpy establishment apologist to use the P-word but nevertheless, he does make the point.

Consider.

The Merriam-Webster Dictionary explains a Ponzi scheme this way:
A Ponzi scheme is an investment scam that pays existing investors out of money invested by new investors, giving the appearance of earnings and profits where there are none. 
In his private email newsletter, Krugman writes this:
Social Security is America’s oldest major social program, and it’s a crucial support for older Americans, a majority of whom depend on it for more than half their income, and a quarter of whom depend on it for almost all their income. The program is structured to look like a pension fund, where what you get out depends on what you paid in, but that’s bit of a Noble Lie. For the most part it’s a pay-as-you-go system, in which Americans of working age support retirees.
And he knows the problem:"[T]he long-term finances of Social Security look a bit dodgy... [becasue] the aging of the population, with a rising ratio of older Americans to those of working age." That is there are more funds flowing out in the scheme than flowing in.

Krugman, again:
All of this means that something will probably have to be done to keep Social Security sustainable...if the Social Security trust fund is eventually exhausted, it will be necessary either to raise taxes or to cut benefits.
-RW



4 comments:

  1. They will be pressured to raise taxes or cut benefits---or create a larger base of taxpayers, e.g. admit more asylum-seekers and immigrants into the country, the better to sap their wallets.

    ReplyDelete
    Replies
    1. I vote they do all of the above.

      Delete
    2. Why does someone with an anarchist picture support more government intervention?

      Delete
  2. Yikes!
    Are we certain that the picture of CP is not CP's head superimposed onto another picture of someone sitting at a desk? CREEPY!!!

    ReplyDelete