Let’s give the devil his due, Bernie managed to run a giant Ponzi scheme successfully for about 20 years. Not bad considering the whole thing was built on smoke and mirrors from the git go. He understood quite correctly that “image” was everything and knew how to manipulate that image so others were envious of his position and he had those yapping puppies all around him begging to let him take their money. He lived very well and indeed took care of his own people rather well also. Apparently his pay was higher than what you would find in most of the private market. It was only that nasty day of reckoning that brought him down. Other than having to pay back the money he was alleging holding for others he was in great shape. He had “books” and regular statements that proved he was in the black as were all the accounts he was managing. The problem was that someone finally decided to pull back the curtain and see what was there and just like in the Wizard of Oz there was a little fellow pulling on the levers and pretending to be the great Wizard. He turned out to be another fellow that owed more than he could pay. His books were phony and so were the assets he alleged held for the account of others. Maybe he could run the US Ponzi scheme better than the Treasury or the Social Security Administration.
The Social Security Administration and its assets are often referred to as a Trust Fund. Implying that there is a separate, segregated account with all this money in it just for those who are paying in for the enforced retirement account. A Ponzi Scheme means that you take money from folks and promise to give it back but you spend the money on other things and depend on a continuing influx of new “investors” to pay out what you owe to the earlier investors. Social Security does not segregate all those taxes they collect from us during our lifetime. Yes, some of the money collected is used to pay those entitled to retirement benefits but many years ago that revenue source was insufficient to meet the payments to the recepients. So the Government merely gave itself an IOU for the so-called Trust Fund in Social Security and spent the money collected for SS on whatever bills had to be paid by the Government. Money is a fungible after all and it doesn’t really matter what the money was spent on, whether for interest on the National Debt, Income Tax refunds or social programs like Medicare or food stamps. The money collected was spent and the Trust Fund got those IOU’s from the same Government that owed the money to the Social Security recepients. The system depended upon new people coming into the system constantly and paying in fresh money to pay out to the older folks who were entitled to their money back. Of course the Social Security system doesn’t even promise you will get back all the money you paid in over your lifetime. You only get a regular payment and if you die a few years later then the excess money you paid in stays with the Government. They don’t make a lump sum payment to your heirs. They just keep it. Boy, would Bernie have loved such a deal!
Just like Bernie the Government cooks the books and shows those IOUs as assets for the Social Security Trust. But that means the Government has to get the money from somewhere if it is going to pay those notes. Now where does the Government get its money? They have an advantage that Bernie would have died for. They can tax and make people give them money on a regular basis. In a few more years when those Boomers’ bills come due and they want their money the funds will be depleted to nothing. Even those IOUs won’t be of any use because with all the other expenses of the Government there simply won’t be enough money to pay everyone what they have been promised by SS. The Ponzi scheme will crash just like Bernie’s.
The Treasury is doing about the same thing with its pals at the Federal Reserve. It is supplying money to run the Government with deficit budgeting and spending by selling bills and notes and when there aren’t enough buyers they have the Fed “buy” the bills and notes. They have already done so to the tune of hundreds of billions already and are primed to buy more before year end. This is the Mother Lode of Ponzi schemes because the Fed can simply print up all the money it needs. Bernie would never have crashed and burned if he could have printed up money. Since he is so experienced with these matters I think it would be the honest thing to let him out and have him head up both the Treasury and the Social Security Administration. Maybe Geithner could swap places with him for tax evasion. Bernie is sure familiar with cooked books and phony record keeping so he would be right at home. He couldn’t do any worse than those in charge now when it comes to an honest accounting of our financial affairs.
Love your family. They truly are your treasure on earth. That more than wealth will be in your last thoughts, not your bank account. http://www.olcranky.wordpress.com