I heard something really funny today. Laurence Leamer and numerous other editorialists and writers are calling Bernard Madoff’s crime the greatest Ponzi scheme in history. To provide a primer on the so-called Ponzi scheme, made famous by the notorious Charles Ponzi in the early part of the 20th century, it is a scam to manipulate investor confidence by taking investments and paying dividends, not from the interest the fund earns but from monies provided by new investors. If the supposed dividends are large, investors are more than willing to invest even more money and get their family and friends in on the action. Usually those pushing the scam can survive undetected for a while, after which they fold their tents and disappear, taking most of the investment money with them.

Anyway, back to Bernie. He plead guilty and will probably spend the rest of his life in jail. That is as it should be. But the greatest Ponzi scheme in history? Not a chance. The greatest Ponzi scheme in history is Social Security. All the grandiose, indignant finger-pointing by the federal government at Bernie Madoff is embarrassing really. While I know my social security tax is going straight back out to pay retirees now (not earning interest as it should), the government promises me I will get a check when I retire. The only difference between the federal government and Bernie Madoff is that people actually had a choice whether or not to invest with Madoff’s firm. They don’t have a choice with Social Security. What the federal government is doing is criminal on two levels: we aren’t getting any return on our investment, and we risk being hunted by the IRS if we don’t pay this confiscatory tax. We get away with nothing; the feds get away with everything. Bernie is just an imp. The SSA is the devil.

Filed under: Politics
by The Hipster