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.

They're Not Laughing Now

Peter Schiff, a tv financial analyst, appeared to be the lone voice of truth in the days leading to the financial meltdown. Watch as he is jeered and laughed at.

When you listen to what he's saying, he words are painfully clear. But back in 2006-07, people were enjoying their borrowed wealth to much to listen. Once again, I'm glad to be among those who've been taught to live within their means.

Relevant quote:

“All too often a family's spending is governed more by their yearning than by their earning. They somehow believe that their life will be better if they surround themselves with an abundance of things. All too often all they are left with is avoidable anxiety and distress” --Joseph B. Wirthlin

The Economy: You Reap What You Sow

The credit collapse: How could anyone NOT see it coming? For decades hundreds of millions of Americans have sold their future for immediate luxuries - in the form of home equity loans, credit card debt and adjustable rate mortgages. Of course, shortsighted companies took advantage of consumers' stupidity in exchange for a quick buck. I think it all goes back to the "me-me-me, now-now-now" attitude of the baby boomer generation.

Prophetic were the lyrics of a 1990s Kevin Gilbert song:

"The baby boomers had it all, and wasted everything.
Now recess is almost over, and they won't get off the swing."

Well, recess is certainly over, and those who cashed in their financial future are simply reaping their own noxious harvest.

Also timely was the counsel of LDS Apostle Joseph B. Wirthlin:

“All too often a family's spending is governed more by their yearning than by their earning. They somehow believe that their life will be better if they surround themselves with an abundance of things. All too often all they are left with is avoidable anxiety and distress” (May, 2004).

My family is one of very modest means, but we've managed to avoid the pitfalls of deficit spending. Sure, we don't have a giant flat-screen TV, we drive a couple crappy sedans and our home isn't exactly dinner party material. But still, we have zero debt (excepting a standard mortgage). So I'm not really missing those extraneous niceties at this point.