A true Ponzi scheme requires that you continue to recruit more and more participants to pay off the earlier round of participants. That is not precisely true with Social Security. There is a disproportionately large number of people flowing through the system that were born from 1946-1964. There were relatively few people born in the decade before that. So this group is able, while it works and pays taxes, to fund more generous benefits for the group that preceded it, but will not be able to be comparably supported by the group following it, unless (1) taxes are raised, a lot; (2) benefits are cut, either across the board or to a selected group (that means you); or (3) money is borrowed to tide the system over until the boomers have all died off. Some combination of (1), (2) and (3) is certainly possible, probably likely. But when the boom is over, you don't need to recruit more people into the system just to pay for it. With a stable population growth rate and stable benefit levels, there is no reason why the system must be a Ponzi scheme.
Your antagonism toward government spending and government benefits is well knows. I think Social Security ought to be reformed, but I also think that telling old people to starve, wither away, and die of things we can easily cure is not enlightened social policy. No other country we want to be like does that. Why should we? |
