It has to be something in the water in America. Ponzi schemes seem to be popping up like daffodils in the spring. We all know about Bernie Madoff’s billion dollar scheme, but did you hear about the one in Oklahoma City? How about the $40 million scam just squashed in Sacramento? The Miami New Times writes, "Ponzi Schemes Are So Hot Right Now, Even the Dominican Republic Has One."
There is a history of Ponzi schemes in America. It’s where Charles Ponzi started his. While it wasn’t the first, it was one of the most publicized. However, there is a scheme being pulled right now that makes Bernie Madoff look like a piker. Madoff’s scam toppped at $7 billion. Peanuts. The Ponzi scheme I’m talking about pulls in hundreds of billions. And if you have a job, you are part of it.
It’s called the Old Age, Survivors, and Disability Insurance (OASDI). Most call it “Social Security.” Consider what Ponzi did, and then consider how Social Security operates:
Under Social Security, lower- and middle-class individuals are forced to pay a significant portion of their gross income–approximately 12 percent–for the alleged purpose of securing their retirement. That money is not saved or invested, but transferred directly to the program’s current beneficiaries–with the "promise" that when current taxpayers get old, the income of future taxpayers will be transferred to them.
New investors are paying in, supplying the returns for older investors, with the promise of a future return. Exactly what Ponzi did, save one feature: Ponzi didn’t force anyone to invest with him.
The government does.
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