SOCIAL SECURITY = PONZI SCHEME

INSTAPUNDIT linked to an article on Social Security by Arnold Kling at TECHCENTRALSTATION. The article is okay - but it really over-analyzes what's really a simple problem, and then profers a political analysis which is pointless and a solution which is stupid, unfair, and Statist.

The REAL problem is that Social Security is nothing more than a fraudulent scam - literally nothing more than a "Ponzi Scheme" run by the federal government. Always has been - always will be.

Simply put: a Ponzi Scheme is a type of fraud in which earlier "investors" are paid off with the investments of later "investors." This is EXACTLY how Social Security was conceived, and how it has run since its inception. (SEE COMPLETE OF PONZI SCHEME DEFINITION HERE.)

Shifting demographics mean that there will be fewer "new investors" coming on-line than "older investors" seeking their promised payments; that's the only reason that there's an impending crisis.

Solving the impending and inevitable demographic problem of this Ponzi Scheme is technically simple: either cut the amount of the outgoing payments/"benefits;" and/or raise the age at which those payments/"benefits" begin; and/or increase incoming taxes/"investments" by raising the tax rate or by raising the income ceiling at which those taxes currently stop. (Kling's suggested "solution" is nothing more than this type of adjustment).

In other words: make adjustments to Social Security in order to perpetuate the viability of the on-going fraud, and not by addressing the fundamental problem - the fact that the system is a form of FRAUD, a financial fraud that -- if it weren't perpetrated by the federal government -- would be busted by the likes of Eliot Spitzer!

Only gradual privatization can avert the crisis without perpetuating the fraud.

Gradual and partial privatization should lead to complete privatization at some point in the near future - a future when individuals will be responsible for their own retirement, as they are now responsible for their own employment and for their own eating, clothing, housing, bathing and everything else in their own PRIVATE lives.

The state should have NO ROLE in anybody's retirement - except to make sure that the privately placed investments are not subject to fraud and mismanagement.