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Tuesday, August 23, 2011

Yes, Social Security is a Ponzi Scheme and not Manna from Heaven

I have seen several statist journalists criticize Texas governor and GOP presidential hopeful Rick Perry for referring to Social Security as a "Ponzi scheme" in his book "Fed Up!"

There are many things for which to criticize Perry, but the Ponzi scheme comment is not among them. Social Security is a Ponzi scheme. That this is an unusual notion to those that worship at the altar of the New Deal demonstrates the statist commitment to faith in government over actual facts about government. This faith in government rivals that of Billy Graham's faith in Jesus, but without a virgin birth.

Make no mistake, the Cult of the New Deal is comprised of Republicans and Democrats, "conservatives" and "progressives." For example, none of the current GOP field of presidential contenders has any intent on ending this fraud. That would make them apostates, and unelectable. And if you are unelectable, you can not get a prime sucking location at the head table at the Banquet of the Holy Government Teat

Apparently, if the prophet FDR said there was a trust fund, then by God there is a trust fund! But, unfortunately, there is not. FDR makes Bernie Madoff look like a penny ante amateur. And just like the victims of Madoff's fraud, lots of people are going to lose lots of money. FDR's fraud, however, affects far more than those personally duped by his lies. It affects everyone in the country, and will for generations.

Perhaps the most devout members of the Cult of the New Deal can be persuaded by the words of their deity, the benevolent federal government. According to the Securities and Exchange Commission (just one of thousands of federal tentacles attached to the Vishnu of the State) a Ponzi scheme is

an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors. Ponzi scheme organizers often solicit new investors by promising to invest funds in opportunities claimed to generate high returns with little or no risk. In many Ponzi schemes, the fraudsters focus on attracting new money to make promised payments to earlier-stage investors and to use for personal expenses, instead of engaging in any legitimate investment activity.

Social Security takes money from those currently working to pay off those no longer working. One would be hard pressed to come up with a better example of a Ponzi scheme. Except, of course, what the benevolent federal deity does is worse. A mere mortal charlatan must convince those with money to voluntarily part with it. The benevolent deity need not concern itself with such a pedestrian task. It simply takes the money from the victim before the victim ever gets to see it.

Reject the Church of the State. Reject fraudulent Ponzi schemes perpetuated in the name of benevolence. Reject the false prophets that preach only the State can provide bounty for its parishioners. Reject the fantasy.

Embrace freedom. Embrace reality. Freedom is dangerous and reality is scary, but pretending we live in a land where fraud is benevolence is fantasy.