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Social Security
Introduction
Welcome to the worlds of Social Security and Medicare, the "third rail" of American politics. It has virtually been political suicide, for any politician to speak negatively about these favorite government programs. This appropriate analogy is derived from the third-rail of an electrically powered train, which is charged with high voltage and thus lethal to touch.
Social Security and Medicare are Federal Ponzi Operations, which constitute the most dangerous hybrid models of a variant classic Ponzi scheme design. The federal government has enacted these immoral and socialistic wealth transfer schemes into law, which is the crucial problem.
Americans born after about 1965 will be the ultimate victims, of our well intentioned but foolish federal schemes. They will rightfully be angry and perhaps riotous, after paying conscription stakes all of their working careers and then nothing remains for them. Moreover; scheme collapse will occur well before the Boomer's needs have been completely met.
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Conscription Investors
National politicians, SS managers, union leaders and academics continue to tap dance around the Ponzi subject. Such defenders avoid any serious discussions of Social Security and Medicare Ponzi operation core issues. From a defiant stance; they are politically compelled to condescendingly emphasize only the contrarian fine points, against applying the Ponzi label.
Many such defenders will argue that Social Security does not meet the requirements of Phase-I, in order to be declared a true Ponzi scheme. However within this document, their rebuttal shall be proven fallacious and irrelevant.
Any classic Ponzi schemer would always covet the ability to directly execute Phase-II; whereby, the inconvenient necessity of Phase-I could be completely avoided. Moreover, Phase-II is the very heart of the fraud and precisely where the money is made.
But Phase-I exemption is a luxury, which the classic Ponzi schemer can never possess. However; Uncle Sam enjoys such great luxury by utilizing multi-millions of conscripted 'investors', who function as perfect Phase-I substitutes.
In practical effect; Social Security meets the principal Phase-II and Phase-III qualifications, which actually cause the catastrophic outcome of a classic Ponzi scheme. You are now looking directly into the bore, of the charged Social Security cannon, which is an appropriate analogy. As a result, should you even be concerned about Phase-I?
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Technical Analysis
Any Ponzi scheme can be examined best, in three distinct phases or stages. Consequently and as follows, please consider how both Social Security and Medicare compare to well established and accepted definitions for classic Ponzi schemes.
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Phase-I: Setup of Investor Victims
In any classic Ponzi scheme, the scheme operator capitalizes on human greed by recruiting investors; who are tantalized by the promise of extraordinary and unrealistic returns or gains. To setup vulnerable investors as suckers, for fraudulent purposes, a classic Ponzi schemer performs* the following four preliminary actions.
"Guarantees an extraordinary high rate of investment return"
"Offers a believable reason for achieving the promised rate of return"
"Convinces investors of his trustworthiness"
"Pays initial investors exactly as promised"
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Federal Exemption: The government wields immense power to obtain investment principal, for both Social Security and Medicare. Mounted astride such an ominous and menacing socialism saddle; equestrian Uncle Sam achieved authority, by the Social Security Act, to directly execute Federal Ponzi Operation Phase-II.
Consequently, with a national corral of saddle-broken and ready investors, it is unnecessary for the government to perform any part of Phase-I. Whereby and instead, conscription investors are utilized to feed the maw, of such massive virtual machines. Such investor compliance is guaranteed by the coercive might of federal law; otherwise, rebellious conscripts face shackles and prison.
As a significant conclusion; Phase-I methods and considerations have no bearing, in determining whether Social Security is a Ponzi scheme or not. Furthermore; the presumed original good intentions, of the 1930's socialist New Dealers, are of no consequence in the ultimate calamity to come.
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Phase-II: Acquisition of Investment Principal
For all Ponzi schemes, "subsequent investors are ultimately attracted by fame and hype*, of the Ponzi scheme operator's success". During phase-II, the pool of investment money always balloons enormously; whereas Social Security and Medicare are no exceptions.
Empowered by the inherent Phase-I exemption; FDR's government earnestly got down to serious business, by implementing federal Ponzi operational Phase-II. Consequently, the largest government infrastructure on Earth was constructed, which enabled the collection of 'investment' principal for retirement; throughout every hour, of each day, of every year.
Such a vast quantity of money is continually appropriated, for government sanctioned wealth redistribution. Dear Uncle Sam robs from young Peter to pay Paul's retirement pension today; while guaranteeing Peter’s future retirement, with a fraudulent promise.
In the beginning of Social Security and with a virtually unlimited worker pool available; congress was eager to communicate their successes to voters, while being giddy with the praises received. Moreover, as the fame of Social Security's successes became widespread; congress has continued to hype the program and offer more money and benefits, to a ravenous American population.
Consequently, American citizens have been obliged to congress by such 'gifts' which include; the Social Security pension, cost of living raises, disability benefits, dependent benefits, Medicare health insurance, prescription drug insurance and SSI welfare. Moreover congress has made special inclusion for certain groups, who paid very little into the Ponzi operation system. Grievously, such socialistic benefits have sown the seeds; of money-biased political perversion, at the election booth within our republic.
Phase-II may be considered as the golden years of Social Security; while FDR's virtual dream machine worked its money making magic so prodigiously. Moreover, the program served well to meet critical financial needs of the Boomer's parents and grandparents. However the golden years were merely a prelude to the Phase-III financial storm, which will be of historically unparalleled intensity.
Note: Any references within this document, to SS-Ponzi and MC-Ponzi; refer to the Social Security and Medicare federal Ponzi opertions, respectively.
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Phase-III: Collapse of Fraudulent Scheme
As any classic Ponzi scheme collapses, "the Ponzi schemer steals* investment principal". Consequently, remaining investors are left broke and disillusioned. All Ponzi schemes inevitably fail because the pool of available money becomes insufficient to repay investors; who begin demanding refunds because of panic in the markets. When market collapse appears imminent, the Ponzi schemer usually steals investment principal and disappears with the loot.
When the available quantity of tax-paying workers falls below critical mass, SS-Ponzi will collapse. Social Security will then be doomed, as the pool of inflowing money becomes insufficient to repay investor retirees. This ominous change is occurring steadily, as the ratio of workers to retirees** has declined over the years, from 41.9 (1945) to 2.9 (2010).
The Social Security Trust Fund has principally and legally been squandered on congressional pork projects, with impunity and immunity from prosecution. However, as with any Ponzi scheme; most Americans would maintain that such actions effectively constitute embezzlement. Such misapplication of the People's money is a serious fiduciary breach, by the congressional trustees.
According to the SSA,"Through 2022, the annual cash deficits will be made up by redeeming trust fund assets*** from the General Fund of the Treasury". But since the United States routinely operates on credit; insufficient general funds remain, with which to redeem such trust fund bonds (IOU's).
Consequently; government use of the term 'redeeming' is deceptive because even more money must be borrowed for deposit into the general fund, to cover such bond obligations. Therefore, American workers can find little comfort in the box of fraudulent and worthless federal bonds, which stand as legal securities for the bankrupt Social Security Trust Fund.
Placed against the collective futures of the Boomer’s descendents; such foolish new debt is over and above the current national debt, which is in-excess of 15 trillion dollars and rapidly increasing. It's outrageous, but we've built far too many railroad, cowboy and fine art museums; but not to mention, the Alaskan bridge to nowhere.
Beware that the fraudulent SS-Ponzi games have about run their course. Moreover, as citizens ultimately discover that Social Security checks are not coming anymore; Uncle Sam's grand pork-fest will have consumed the remainder of the trust fund.
Social Security is not a classic Ponzi scheme, but please don't misunderstand the following distinction. Social Security is the greatest Ponzi operation on Earth. Moreover; the business end (bore) of Social Security is fully capable of causing all the same catastrophic results of any classic Ponzi scheme, which is a behemoth of full national size/scale.
*[Ref.; About.Com.Economics: http://economics.about.com/od/financialmarkets/f/ponzi_scheme.htm ]
**[Ref.; Social Security Admin; History: http://www.ssa.gov/history/ratios.html ]
***[Ref; Social Security Admin; Actuarial: http://www.socialsecurity.gov/oact/trsum/index.html ]
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Validation of Ponzi
The following validation tests are critical qualification elements*, which apply to any and all Ponzi schemes. Such specified four elements are all perfectly applicable to Social Security and Medicare, except for the second; where the federal government is completely exempt.
(1.) "A Ponzi scheme is a fraudulent operation that pays returns to separate investors from their own money or money paid by subsequent investors, rather than from any actual profit earned"
(2.) "The Ponzi scheme usually entices new investors by offering returns other investments cannot guarantee, in the form of short-term returns that are either abnormally high or unusually consistent"
Federal Exemption: Relatively speaking, element two is for amateurs. Instead, government professionals utilize conscription investors. American workers thus make the perfect puppets, for pumping our Social Insecurity pension plan.
(3.) "The perpetuation of the returns, that a Ponzi scheme advertises and pays, requires an ever-increasing flow of money from investors to keep the scheme going"
(4.) "The system is destined to collapse because the earnings, if any, are less than the payments to investors"
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Due to an 'ever increasing pool of retirees' and a 'shrinking work force'; the federal government must continue to reduce Social Security benefits, by 'hiking the payroll tax rates' and also by 'delaying the age of retirement eligibility'. But such concerted cover-up tactics constitute utterly futile attempts, to stall and prevent complete collapse of the schemes.
Moreover; Social Security has been trending toward complete collapse, ever since it was first implemented. To comprehend the government's heroic efforts, which have been made to prop-up SS-Ponzi, one merely has to study the escalating trend of SS tax rates since inception.
The combined employee and employer Social Security OASDI tax rates have progressed steadily during the years, from 2.0% (1937) to 12.4% (2010)**. As a red-flag true Ponzi indicator, such insidious and alarming SS-Tax rate increases are in complete accordance with Ponzi scheme validation elements 1, 3 and 4 above.
*[Ref.; Wikipedia.org: http://en.wikipedia.org/wiki/Ponzi_scheme ]
**[Ref.; Social Security Admin; Tax Rates: http://www.ssa.gov/OACT/ProgData/taxRates.html ]
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Quintessential Proof of Ponzi
The first monthly Social Security payment* was issued to Ida May Fuller on January 31, 1940, in the amount of $22.54. In 1937, 1938 and 1939, the recipient paid a total of $24.75 into the Social Security System. The same recipient lived to the ripe old age of 100 and collected a total of $22,888.92, which is a pay-back ratio of 925:1.
Without a doubt, Ms. Fuller was a very wonderful person; however, she obviously reaped a great windfall profit from being a very early participant in the world's greatest Ponzi operation. Where else could anyone reap a profit ratio of 925:1, in any legitimate investment, after investing just a mere three years? LOL!
Consequently; Ms. Fuller's grand, but completely unrealistic, windfall profit is the very best 'Quintessential Proof' available; which establishes that Social Security is a Ponzi operation or scheme.
Investors beware! An inviolate Ponzi scheme truth of Nature dictates; (1) Enter early and 'reap a bonanza', (2) Enter late and 'get the shaft'.
*[Ref; Wikipedia.org: http://en.wikipedia.org/wiki/Ida_May_Fuller ]
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Supreme Court Decision
In the 1930’s, the Supreme Court struck down* many pieces of President Franklin Delano Roosevelt's New Deal legislation. FDR then responded by persuading congress to pass legislation, which permitted him to appoint new federal judges; wherever sitting judges were age 70 or over, but refused to retire. FDR performed an end-run around the constitutional constraints, by stacking the Supreme Court with six additional 'hip-pocket' justices.
FDR's maneuver tipped the balance of power, to yield his engineered high court ruling; which found Social Security to be constitutional in 1937. Although Social Security is inherently unconstitutional in the root structure, this very determined American president concocted a scandalous scheme to legitimize and validate such a patently fraudulent federal law.
*[Ref; http://en.wikipedia.org/wiki/Social_Security_(United_States)#The_Supreme_Court_and_the_evolution_of_Social_Security ]
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Federal Ponzi Operation
Formal Definition
Federal Ponzi Operation: Hereby defined as a United States Federal Government virtual machine or mechanism; which possesses identical classic Ponzi scheme attributes, except for original malicious intent to defraud Americans. Such a federal Ponzi operation exhibits precisely the same device function, fraudulent outcome and catastrophic effect, of any classic Ponzi scheme. However; the federal government achieves complete exemption from executing Ponzi scheme Phase-I, by utilizing conscription investors. Such federal Ponzi operations include Social Security and Medicare; which constitute the most dangerous hybrid models, of a variant classic Ponzi scheme design. (Author's reference; SocialSecurityPonziScheme.com)
Permission is granted to republish the definition for Federal Ponzi Operation, as a complete and exact quote, but reference and credit must be given back to the author's source URL, as shown.
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