Will your Social Security check be in the mail come 2015?
A top economist says the trust fund for Baby Boomers has disappeared. But, there's something you can do!
Is Social Security one big Ponzi Scheme? In the real world, if an investment guru such as Bernie Madoff is found to be broke and having to scramble to find new investors so he can continue to pay dividends to old investors – he ends up in court.
If it’s discovered that he didn’t bother to invest their funds at all – instead paid himself an exorbitant salary and squandered the money – he goes to jail.
Operators of Ponzi schemes usually entice new investors by offering higher returns than other investments. Paying such high returns requires an ever-increasing flow of money from new investors to sustain the scheme.
“When Texas Governor Rick Perry referred to Social Security as ‘a Ponzi scheme,’” writes Judge Andrew Napolitano, ”he was excoriated by the press, left and right, and by his fellow Republicans, as well.”
After all, our government wouldn’t do such a thing, would it?
“For many baby boomers, it’s comforting to believe that part of the 12.4 percent Social Security payroll tax they (or they and their employer) have been paying is going into a $2.7 trillion Social Security Trust Fund,” writes economist and retired professor Allen W. Smith.
However, Smith says there is no trust fund – and a number of elected officials, including former President George W. Bush, have acknowledged that.
“To make a long story very short, we are supposed to have $2.7 trillion in Social Security surplus, all earmarked for the baby boomers’ retirement, due to money generated by amendments approved in 1983,” says Smith, author of The Looting of Social Security. “But there’s no money in the fund.”
“This revelation should come as no surprise to those who monitor the government and its deceptive ways,” says Napolitano. “When he first introduced Social Security, President Franklin D. Roosevelt argued that under Social Security the federal government would be holding your money for you. He deceptively fostered the idea that Social Security would be a savings account, into which employees and employers would make contributions and out of which guaranteed monies would be paid to those who reached the age of 65. Essentially, he claimed that you’d get your money back.