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Politics : Formerly About Advanced Micro Devices
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To: combjelly who wrote (749104)10/24/2013 11:53:50 AM
From: i-node2 Recommendations

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FJB
TideGlider

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The money that comes in goes into the trust fund. That is not how a Ponzi scheme operates.

It doesn't matter if it goes under the trustee's mattress. Where the money goes has nothing, AT ALL, to do with the characterization of a Ponzi scheme. Duh.

It is currently taking in more than it is spending and will continue to do so for decades unless the Republicans crash the world economy again.

This simply is not correct. Beginning in 2010, SS started spending more than it is taking in in payroll taxes. At that point the federal government began BORROWING money (from the trust) to cover SS benefits, the first year requiring 37 Billion, an amount which increases annually from now on until something is done about it. The current estimates are that the SS Trust will be depleted of funds in 2037.



The salient feature of a Ponzi scheme is not how the money is stored; it is where it comes from. Instead of payouts based on returns of capital and earnings on invested money, a Ponzi scheme takes money from current contributors and pays it out as though it were returns of capital or earnings. Precisely what SS is doing today as it "borrows" money to pay out benefits.

The problem here is cash method accounting, which should never have been used and has led to mass confusion on the parts of many about the financial position of the trust. Even smart people who don't understand basic accounting are utterly confused by it.
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