So, by definition, a Ponzi scheme through the years since then is generally thought to be a fraudulent investment
operation that pays returns to its investors from their own money or the money paid by subsequent investors, rather
than from any actual profit earned by the individual or organization running the operation.

The classic Ponzi scheme brings in new investors by offering returns that are either abnormally high or unusually
consistent. The expectation of either high or long-term returns, however, requires an ever-increasing flow of money
from new investors to keep earlier investors paid. That's the only way the scheme can be sustained.

The system is destined to collapse because the earnings, if any, are less than the payments to investors. Usually,
the scheme is interrupted by legal authorities before it collapses because a Ponzi scheme is suspected or because
the promoter is selling unregistered securities. As more investors become involved, the likelihood of the scheme
coming to the attention of authorities increases.

So, what is the difference between a Ponzi scheme and Social Security?

Franklin D. Roosevelt's brainchild, initially signed into lawin 1935 as part of his "New Deal," has been perpetuated
since then by both Democrat and Republican politicians to the point that it is now the largest government program in
the world and the single greatest expenditure in the federal budget!

Democrat assertions to the contrary, there is no lock box where the funds are squirreled away. As became even
more clear during the 2011 budget debates and President Obama's less-than-veiled threats that Social Security
monies might not be paid, the only way for all the people who invested in this system is to get lots of new investors.

Unfortunately, the fragile deck of cards is already crumbling. The very
rosiest estimates point to the fact that by 2035, the ratio of potential
retirees to working age persons will be 37 percent. In all likelihood, more
realistic estimates point to the fact that it will take two "new investors" to
support every single "early investor."

As with Ponzi’s scheme, Social Security turned out to be a very profitable
deal for those who got in early. In fact, the very first Social Security
recipient, Ida Mae Fuller of Vermont, paid in just $44 in Social Security
taxes, but because she lived to a ripe old age, she collected a
comparatively whopping $20,993 in benefits!

That hasn't happened in a long time. It's not happening today. And it
certainly won't be happening in the future. In fact, a person earning an
average $95,000 per year throughout his/her career and retiring in 2045
is estimated to lose over $200,000 by participating in the Social Security
system, versus even the most conservative private investments.

Everyone seems to agree that Social Security is headed for a complete meltdown without massive, ongoing
infusions of new investors.

    Yet, even after Rick Perry dared to use the Ponzi scheme analogy to Social Security, people from
    all sides were quickly and loudly pointing out all the differences.

    I've read them. You probably have too. Maybe you understand the difference. I don't. I still don't
    see a massive difference between the programs masterminded by Charles Ponzi and FDR?

    Okay, I have one difference. At least Ponzi's investors had a choice. Hard-working
    Americans haven't. Today, as in past decades, we watch it deducted from every paychec
    through a mandatory payroll tax. We could do a better job investing those funds, but we can't.
    Those funds have to be paid every month to keep up the appearances that all is well in our
    government's "trust fun" fantasyland.

    Here's another difference: Until his scheme finally collapsed, Charles Ponzi had to keep
    paying his early investors what he promised. Otherwise all the future investors would know
    something was askew. With Social Security, on the other hand, Congress has shown no shame in
    changing or cutting benefits, whenever the need arises, to keep the scheme going. Case in
    point: Social Security is currently facing more than $20 trillion in unfunded future liabilities.
Therefore, raising taxes and cutting benefits is the only way to keep the program limping along until it absolutely,
positively collapses.

Here's another big difference:
When Charles Ponzi was no longer able to bring in enough new investors
fast enough, the scheme collapsed.
Ponzi was convicted of fraud and sent to prison. End of story!

With Social Security, however, with the monies each worker is forced to "invest,"
only a small portion is
reportedly used to buy special-issue Treasury bonds
that the government will eventually have to repay.
However, the pesky truth, out in the open more than ever before thanks to Obama's threats, is that
the vast
majority of the money you pay in Social Security taxes is not invested in anything with a financial return,
but is blatantly and routinely used to pay benefits to  “early investors”
who are now retired and rightfully
reaping the rewards from their investments.

If you are retired as I am, let me hasten to say that it's not us retirees that have done anything wrong. We've
believed in the system for far too long. All the terms and promoted benefits sounded so good. Plus, who can argue
with names like "The New Deal" or "The Great Society." We were all headed for a self-sustaining, one-for-all-and-all-
for-one Utopia.

Like it or not, however, the sad fact we must face today is that our children, grandchildren and great-grandchildren
will be paying huge, burdensome amounts from their paychecks to pay dwindling benefits.

I, for one, would rather deal with the truth instead of kicking the proverbial can down the road for future generations
to face.

Apparently, finally, someone in the national news is finally saying the same thing.

Apologies to Rick Perry, anyone? If anything, the Texas candidate was being too kind to those, even in the
Republican ranks who should know better, who don't want to face the facts.

Maybe it takes an old simple-minded rancher to ask why all the politicians and pundits who have perpetuated this
gigantic Ponzi scheme haven't been arrested, tried and sentenced for fraud against the fine people of the United
      ...Perry Raises a Texas-Sized Ruckus with Social Security Claims

Recently, Governor Rick Perry was practically drawn and quartered when he dared to call Social Security a "Ponzi
scheme." Some of his fellow Republicans, including Mitt Romney, even joined in the chorus of boo-birds, attacking
the Texan's "radical" views.

What did he mean?

From time to time, the term "Ponzi scheme" is bandied about, but what does it mean?

The original scheme started before World Ware I when an Italian immigrant born
Carlo Pietro Giovanni Guglielmo Tebaldo Ponzi in Lugo, though poverty-stricken,
came up with a daringly ingenious plan. He talked a number of men and women into
investing their money to take advantage of the price difference between international
reply coupons and postage stamps.

Sure enough, the first investors began talking about the amazing returns they were
receiving from Charles Ponzi's remarkable investment plan. Naturally, more people
rushed to invest in the can't-miss deal.

Ponzi quickly learned that there was more money to be made by getting investors
involved than in actually carrying out a legitimate financial arrangement. As long as
the new money went to earlier investors, who would be the wiser?

Granted, it was effective marketing. There was one major problem: To keep the scam going, Charles had to find lots
of new people with enough money to keep the appearances of immense cash flow going.

It worked for awhile, especially after Ponzi hired agents, paying generous commissions. By early 1920, he made
$5,000. The next month that jumped to $30,000. As the frenzy swept through the New England area, by mid-1920,
he brought in $420,000 (over nearly $5 million in today's dollars!).

    On July 24, 1920, the Boston Post printed a favorable article on Ponzi,
    bringing in a new harvest of investors. Reports show that he was
    making $250,000 a day.

    When he couldn't keep huge infusions of new investors coming fast
    enough, the fragile house of cards collapsed. In short order, the
    "Father of the Ponzi Scheme" went to prison for fraud.

    In 1934 he was released from prison and deported to Italy where he
    moved from scheme to scheme. Nothing was nearly as successful as
    the "big one" in the United States. Eventually he moved to Brazil where
    he worked occasionally as a translator.

    He was weakened by a heart attack in 1941, and he died in a charity
    hospital in Rio de Janeiro on January 18, 1949.

    Apparently unrepentant to the end, he said in the final interview
    granted before his death, "Even if they never got anything for it, it was
    cheap at that price. Without malice aforethought I had given them the
    best show that was ever staged in their territory since the landing of the
    Pilgrims! It was easily worth fifteen million bucks to watch me put the
    thing over."
All contents © 2012 No portion may be used in print, for broadcast or on the Internet without prior permission.
Texas Governor Rick Perry,
perhaps too kind?
Ida Mae Fuller