Madoff to NY magazine: Government a Ponzi scheme You dont say?Oh Really?

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    Feb 28, 2011 6:56 AM GMT
    Madoff to NY magazine: Government a Ponzi scheme
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    http://news.yahoo.com/s/ap/20110228/ap_on_re_us/us_madoff_scandal#mwpphu-container[/url]
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    Feb 28, 2011 12:17 PM GMT
    Oh that wacky Madoff!!!
    This guy never stops amazing me with the depths of his desperation. Government aside, Madoff has hurt so many people i only wish he was treated like a real criminal, instead of a white collar prince
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    Feb 28, 2011 9:38 PM GMT
    The important distinction being, the Government tends to tell you where your money is going and also honours its debts.
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    Mar 01, 2011 12:06 AM GMT
    Mil8 saidThe important distinction being, the Government tends to tell you where your money is going and also honours its debts.


    LOL. Sorry I just had to.

    I tend to agree with Madoff on this point, how do you think social security works? When you pay into SS your money doesn't sit there and accrue interest, its turned around and spent to pay off current drawers. It only works if the number drawing doesn't exceed the number paying in. This worked great when the FDR administration implemented it because few lived over 65 and would never actually draw their benefits. Times change and the system has not.
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    Mar 01, 2011 12:26 AM GMT
    heybreaux said
    redheadnc said
    Mil8 saidThe important distinction being, the Government tends to tell you where your money is going and also honours its debts.


    LOL. Sorry I just had to.

    I tend to agree with Madoff on this point, how do you think social security works? When you pay into SS your money doesn't sit there and accrue interest, its turned around and spent to pay off current drawers. It only works if the number drawing doesn't exceed the number paying in. This worked great when the FDR administration implemented it because few lived over 65 and would never actually draw their benefits. Times change and the system has not.


    I disagree. Social Security tax is a mandate, it is a form of social insurance that can be changed to cover more or less the population (higher taxes or higher retirement which is already implemented--full retirement age is increasing progressively --My dad got his full at 62, my mom won't until 66, me maybe 67 or 70)

    The distinction is that Madoff had to go out and find new business, so the risk and danger to new investors was that he could not (aside from the actual legality of what he was running)

    The number drawing won't exceed the number paying in.
    78 million baby boomers are limited and finite in number.
    Gen X are 60 million and Gen Y are 80 million.

    Its just different from an actual Ponzi scheme. To say it is the same is not considering the goverment's full faith and credit and taxing authority which Madoff never had.




    Not to mention that the intent of what Madoff did and the intent of our Social Security program are TOTALLY different.
    Madoff intended to rip people off and get rich.
    Social Security is intended to provide a secure retirement for American workers and a secure future for our country.
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    Mar 01, 2011 12:49 AM GMT
    madoff is kind of brilliant.. in an evil way of course
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    Mar 01, 2011 12:59 AM GMT
    You make a good point increasing tax rates. However, the system works best and most equally with a growing population thus mimicking a ponzi scheme. The number drawing CAN exceed the number paying in and it can still continue if those paying in pay a higher rate.

    And a ponzi scheme doesn't have to be for malicious purposes to be a ponzi scheme.

    A ponzi scheme in which you can guarantee the initial investors their returns (through taxing, inflation, borrowing and printing money) is and will perpetuate itself. So the only difference between SS and madoff is the ability to force new investors to participate through population growth and taxing.
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    Mar 01, 2011 1:49 AM GMT
    redheadnc saidAnd a ponzi scheme doesn't have to be for malicious purposes to be a ponzi scheme.


    Errr.... I really think it does!??!?!?!?
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    Mar 01, 2011 1:53 AM GMT
    To quote...

    "Named after Charles Ponzi, a man with a remarkable criminal career in the early 20th century, the term has been used to describe pyramid arrangements whereby an enterprise makes payments to investors from the proceeds of a later investment rather than from profits of the underlying business ..."

    http://www.cftc.gov/educationcenter/glossary/glossary_p.html
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    Mar 01, 2011 3:38 AM GMT
    Like you said, the elements that all other ponzi-like schemes have are a great degree of data behind the investments. Demand for a growing natural resource, knowledge of possible increases from developing countries, the fact that teenagers have more insurance claims than middle aged drivers.

    You don't see this in ponzi schemes to such a large degree. I don't see this in Madoff's scheme and to a very small degree in SS (only that we are hedging our bets that most will die before 65 and not draw...which is a really bad bet).