Social Security: Massive Ponzi Scheme

That Social Security is a decades-old, massive ponzi scheme that is reaching its foregone conclusion sounds pretty right to me. To quote a very interesting article on Bloomberg,

[Overwhelming debt] is what happens when you run a massive Ponzi scheme for six decades straight, taking ever larger resources from the young and giving them to the old while promising the young their eventual turn at passing the generational buck.

The article delineates the reality that our government is totally bankrupt, but that thanks to politically expedient obfuscatory financial labeling, government debts are bearing down on us under the radar.

The article concludes,

Herb Stein, chairman of the Council of Economic Advisers under U.S. President Richard Nixon, coined an oft-repeated phrase: “Something that can’t go on, will stop.” True enough. Uncle Sam’s Ponzi scheme will stop. But it will stop too late.

And it will stop in a very nasty manner. The first possibility is massive benefit cuts visited on the baby boomers in retirement. The second is astronomical tax increases that leave the young with little incentive to work and save. And the third is the government simply printing vast quantities of money to cover its bills.

Most likely we will see a combination of all three responses with dramatic increases in poverty, tax, interest rates and consumer prices. This is an awful, downhill road to follow, but it’s the one we are on. And bond traders will kick us miles down our road once they wake up and realize the U.S. is in worse fiscal shape than Greece.

Hold on tight, this is gonna get rough.