Wednesday, August 12, 2009

The Social Security Ponzi Scam
  Social Security piece by Malcolm T. Hedges

Yes, I wrote “scam” not “scheme”.  Social Security as originally created paid benefits to participants after the generally accepted life expectancy of participants! Obviously it was assumed the the vast majority of participants would die before collecting benefits.

Basically what was created by the FDR regime was a fictitious Nanny State feel good “retirement” program that anticipated minimal expenditures to fulfill the promise.

Almost by accident the Social Security coffers fictitiously labeled as a “Trust Fund” was inundated with “surplus” contributions during favorable economic times.

The Congress smelled floating money and immediately grabbed it to “balance budgets”, they issued IOU’s to cover their rear ends when that money should have been invested in bonds and instruments that had a solid basis with a return that met or exceeded inflation.

For political advantage and purposes, the Social Security system was embellished by Congress increasing the costs.

The many millions of Americans now collecting Social Security and more in the future significantly contribute to the economy. The Social Security system on paper is totally broken but in reality is pretty much just seriously crippled.  The Federal Machine owes tons of money to the Social Security system that it “borrowed” without worrying about having to pay it back.

As a reality check, the giant influx of the folks on Social Security now occurring will soon start to shrink. Let’s face it a significant percentage will expire and the system will be relieved of many expenditures.

Social Security has become a “fact of life” for Americans, even though it was a “Ponzi Scam” when created, politicians have feed on it for years and are now reaping the rewards.

People expecting a luxurious retirement under Social Security are dreamers or idiots. Social Security can provide a monthly stipend that will allow you to survive without being homeless.  If you are frugal or smart, things can be much better.

Malcolm T. Hedges

DISCLOSURE: We currently live on the monthly Social Security checks received by myself and my wife.  About 50% of that money is promptly spent to pay for clothes, electricity, food, gasoline, insurance, rent and basic telephone service. The balance goes to elective expenditures for books, entertainment, Internet/TV access, software and vehicles. All that money supports the economy and the governments tax coffers.

Posted by Malcolm T. Hedges on 8/12/09

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