{"id":578769,"date":"2021-07-01T12:36:08","date_gmt":"2021-07-01T16:36:08","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=578769"},"modified":"2021-07-01T12:36:11","modified_gmt":"2021-07-01T16:36:11","slug":"why-social-security-is-the-worlds-largest-ponzi-scheme","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/why-social-security-is-the-worlds-largest-ponzi-scheme\/","title":{"rendered":"Why Social Security Is The World\u2019s Largest Ponzi Scheme"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">18<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fwhy-social-security-is-the-worlds-largest-ponzi-scheme%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=578769&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><div><img decoding=\"async\" src=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2021\/07\/GettyImages-1198991959.jpg?w=1200&amp;h=800&amp;ixlib=react-9.0.3\" class=\"ff-og-image-inserted\" \/><\/div>\n<p><span>The United States federal government defines a \u201c<\/span><a href=\"https:\/\/www.investor.gov\/protect-your-investments\/fraud\/types-fraud\/ponzi-scheme\"><span>Ponzi Scheme<\/span><\/a><span>\u201d as \u201can investment fraud that pays existing investors with funds collected from new investors.\u201d As it turns out, Uncle Sam is giving Charles Ponzi and Bernie Madoff a run for their money \u2014 literally.<\/span><\/p>\n<p><span>In 1935, President Franklin D. Roosevelt signed the Social Security Act as one of many New Deal social welfare measures. The law established benefits for the elderly and other vulnerable citizens \u2014 wresting away such caretaking responsibilities from states, localities, and families.<\/span><\/p>\n<p><span>Social Security\u2019s reserves are funded by mandatory \u201ccontributions.\u201d The program <\/span><a href=\"https:\/\/www.ssa.gov\/oact\/progdata\/taxRates.html\"><span>started<\/span><\/a><span> with a combined 2% tax on workers\u2019 incomes, split evenly by employees and their employers. Today, it is 15.3%. Considering that employers merely cut wages to minimize the added expense, most of the overall tax implicitly comes from workers\u2019 salaries.<\/span><\/p>\n<p><span>Why the 650% increase in payroll tax rates? As explained by <\/span><a href=\"https:\/\/www.cato.org\/commentary\/yes-it-ponzi-scheme\"><span>Cato Institute<\/span><\/a><span> senior fellow Michael Tanner, the tax rate is an attempt for the federal government to prevent its pyramid from collapsing:<\/span><\/p>\n<blockquote readability=\"24\">\n<p><span>The very first Social Security recipient, Ida Mae Fuller of Vermont, paid just $44 in Social Security taxes, but the long\u2010\u200blived Mrs. Fuller collected $20,993 in benefits. Such high returns were possible because there were many workers paying into the system and only a few retirees taking benefits out of it. In 1950, for instance, there were 16 workers supporting every retiree. Today, there are just over three. By around 2030, we will be down to just two.<\/span><\/p>\n<p><span>As with Ponzi\u2019s scheme, when the number of new contributors dries up, it will become impossible to continue to pay the promised benefits. Those early windfall returns are long gone. When today\u2019s young workers retire, they will receive returns far below what private investments could provide. Many will be lucky to break even. Eventually the pyramid crumbles.<\/span><\/p>\n<\/blockquote>\n<p><span>Because participants in the upper tranches of the pyramid are compensated by new recruits, Ponzi schemes do not require legitimate investment activity. Social Security reflects this reality as well:<\/span><\/p>\n<blockquote readability=\"11\">\n<p>A small portion of that money is used to buy special\u2010\u200bissue Treasury bonds that the government will eventually have to repay, but the vast majority of the money you pay in Social Security taxes is not invested in anything. Instead, the money you pay into the system is used to pay benefits to those \u201cearly investors\u201d who are retired today. When you retire, you will have to rely on the next generation of workers behind you to pay the taxes that will finance your benefits.<\/p>\n<\/blockquote>\n<p><span>The difference between Ponzi\u2019s deception and that of the federal government is <\/span><i><span>optionality<\/span><\/i><span>. While investors who grow wise to Ponzi schemes can cut their losses and exit, participants in Social Security have no such luxury.&nbsp;<\/span><\/p>\n<p><span>In essence, fiscally responsible Americans are shelling out one-sixth of their income every year to keep afloat a sinking ship intentionally constructed without a hull.<\/span><\/p>\n<p><span>The Congressional Budget Office predicted in 2018 \u2014 notably, two years before the massive fiscal strain of COVID-19 and the lockdown-induced recession \u2014 that Social Security would run out of reserves by the early 2030s. To <\/span><a href=\"https:\/\/budgetmodel.wharton.upenn.edu\/social-security\/\"><span>save<\/span><\/a><span> the program for future generations, lawmakers must restrict benefits and increase taxes \u2014 for example, by raising the full-benefit retirement age to 70 and hiking payroll taxes by another 2.5%.&nbsp;<\/span><\/p>\n<p><span>Simply put, regulators need to broaden the base of the pyramid.&nbsp;<\/span><\/p>\n<p><span>However, such a prospect is easier said than done in the face of a looming demographic <\/span><a href=\"https:\/\/www.dailywire.com\/news\/japanification-how-americas-economy-could-see-a-permanent-decline\"><span>crisis<\/span><\/a><span>. In 1960, American women bore an average of 3.65 children. By 2010, the rate dropped to 1.93, with birth levels again reaching record lows in 2020. Other factors \u2014 skyrocketing government debt, trillions in new spending from the Biden administration, a declining labor force participation rate \u2014 only place more pressure on the longevity of Social Security.<\/span><\/p>\n<p><span>Perhaps it is time for the United States to start cutting its losses.<\/span><\/p>\n<p><i><span>The views expressed in this opinion piece are the author\u2019s own and do not necessarily represent those of The Daily Wire.<\/span><\/i><\/p>\n<p><i><span>The Daily Wire is one of America\u2019s fastest-growing conservative media companies and counter-cultural outlets for news, opinion, and entertainment. Get inside access to The Daily Wire by becoming a <\/span><\/i><a href=\"https:\/\/www.dailywire.com\/subscribe\"><i><span>member<\/span><\/i><\/a><i><span>.<\/span><\/i><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The United States federal government defines a \u201cPonzi Scheme\u201d as \u201can investment fraud that pays existing investors with funds collected from new investors.\u201d As it turns out, Uncle Sam is &#8230;<\/p>\n","protected":false},"author":1,"featured_media":2313848,"comment_status":"close","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2021\/07\/GettyImages-1198991959.jpg?w=1200&h=800&ixlib=react-9.0.3","fifu_image_alt":"Why Social Security Is The World\u2019s Largest Ponzi Scheme","footnotes":""},"categories":[],"tags":[],"class_list":["post-578769","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry"],"fifu_image_url":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2021\/07\/GettyImages-1198991959.jpg?w=1200&h=800&ixlib=react-9.0.3","fifu_image_alt":"Why Social Security Is The World\u2019s Largest Ponzi Scheme","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/578769","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=578769"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/578769\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2313848"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=578769"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=578769"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=578769"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}