Makes me see red.

Vollmer is basically saying that he's not going to answer the questions because he doesn't feel like it.

And this distrubs me very much:

While the SEC is incompetent, the securities industry's self-policing organization, the Financial Industry Regulatory Authority, is "very corrupt," Markopolos charged.

That organization was directed until December by Mary Schapiro, President Barack Obama's new SEC chief.

How the fuck is this even possible?

Sick Burn!!!

Oh snap! Good for Ackerman.

Can anyone explain the difference between Madoff's scheme and Social Security?

http://www.youtube.com/watch?v=75jCl3U3mQc

>> ^Psychologic:
Can anyone explain the difference between Madoff's scheme and Social Security?


Maybe the social security $ goes to people who need it, whereas in Madoff's scheme $ goes to Madoff?
Also social security isn't lying and defrauding investors?

^ One is a scheme for lining Madoff's pockets at the investor's expense, and the other is a scheme for helping take care of our elderly with taxes from our work force.

I can see how those might seem similar, if you've just spun around in a circle a hundred times, then got smacked in the head with a baseball bat.

>> ^NetRunner:
^ One is a scheme for lining Madoff's pockets at the investor's expense, and the other is a scheme for helping take care of our elderly with taxes from our work force.
I can see how those might seem similar, if you've just spun around in a circle a hundred times, then got smacked in the head with a baseball bat.


... or if you're Ron Paul.

Social Security isn't set up to defraud people, but the structure is the same. Money comes in and none is actually invested. Payment to beneficiaries is taken directly from newer "investors" (workers). In the long run it pays out more than it takes in.

The main difference I see (other than intent) is that Social Security isn't an optional investment.

>> ^NetRunner:
I can see how those might seem similar, if you've just spun around in a circle a hundred times, then got smacked in the head with a baseball bat.

>> ^Psychologic:
... or if you're Ron Paul.

True, that is pretty much identical.

drawn and quartered

The only words that immediately come to mind are;

Drug out into the street and shot.

Social Security is a tax, and there's no law that says you have a right to it.

None.

And they say Democrats don't like to gamble with their own money!

>> ^Psychologic:
Can anyone explain the difference between Madoff's scheme and Social Security?


Social Security = wealth redistribution from young poor/middle class people to old poor/middle class people. (Because of the cap, those who make >$10,000,000 pay less than 0.1%)

Madoff = Pyramid scam run for personal gain

Can anyone explain the difference between Madoff's scheme and Social Security?

One is private. The other is run by the government. Both can only exist because of idiots who think they actually work.

Everyone is quick to point out the difference in the intent of both, but the structure is the same.

Both take in money, but nether invests it.
Both use the money of new "investors" to fund payouts.
Both require more and more new investors to maintain the payouts.

I understand the intent of Social Security and I understand how Madoff was a terrible person. However, that doesn't change the fact that SS is set up the same way as what Madoff did (minus the ability for people to take out large sums at once). The way SS is currently set up is not sustainable (ie- it will have to be changed dramatically).


I'm sorry if that upsets anyone. I'm not saying SS is a scam, I'm saying it will fail for the same reason Madoff's scheme failed unless there are big changes.

Taking care of retired people is a very noble cause, but beneficiaries and life expectancies are increasing faster than the number of people paying into Social Security. In fact the number of workers per beneficiary will continue to decrease. Eventually, just like Madoff's scheme, there will be less money coming into SS than the amount payed out. Several estimates I've seen show this happening by 2020 (in fact it is already happening, but it is being payed for by the original surplus).

Downvote if you wish, but I'd rather you prove me wrong about the structure of the two working the same way. =)

I'm not saying SS is a scam

I'll say it. SS is a pernicious government peddled SCAM. It takes money away from private citizens, puts it into government as a virtually interest-free loan for decades, and is designed to give back as little as possible to the saps that paid into the scam. The biggest scam ever perpetrated on the people.

>> ^Winstonfield_Pennypacker:
Can anyone explain the difference between Madoff's scheme and Social Security?
One is private. The other is run by the government. Both can only exist because of idiots who think they actually work.

I upvoted not because I agree, but because I appreciate genuine wit when I see it.


Psychologic, you're right on the first two similarities, but not the third. In a classic Ponzi scheme, you promise a ridiculous rate of return (15% say), indefinitely. You then pay those returns on the deposits of new people coming into the system. Eventually, the amount of new investments will drop below what you need to pay your existing commitments (which has been growing at an exponential rate), or people start trying to withdraw their investment, and that's when the whole thing explodes.

With Social Security, the commitments aren't indefinite and compounding -- they're at a fixed level, and end when the recipient dies -- and there are always new people "coming into the system" by immigration and birth (and the whole getting a job thing). On top of that, you can generally predict that taxpayers stay taxpayers through most of their working lifespan, and that birth/death rates won't have wild swings (no 500% birth rates are likely), so you have a general idea about what your inputs are going to be over long periods of time.

It's true that declining birth rates and longer life expectancies can require retooling the tax rates and benefit levels to maintain solvency, but there's nothing that makes it physically impossible to balance, just politically difficult (because Democrats don't want to cut benefits, and Republicans don't want to raise taxes). Economic growth usually takes up the slack on this, but now that the baby boomers are retiring, and with wages seeming to have leveled off, it looks like we're going to have to make some hard choices. But it's not the inevitable self-destruction of a Ponzi scheme by any stretch.

So, aside from intent, there are some major functional differences between SS and a Ponzi scheme, even if it they're both pay-go systems at the core.

As long as the amount of money needed to sustain retired people is less than 10% of the GDP, social security can be saved. As life expectancies rise, retirement ages will obviously also have to rise. It's immediate wealth redistribution from young people to old people. It's totally protected from inflation by not being dependent on any kind of investment -- if young people's salaries rise from inflation, their tax payments rise to compensate and keep social security adequate.

The way social security has been implemented though, is questionable. The social security revenue should be rolled into progressive income tax, and the flat payroll tax should be eliminated.

Fear about the solvency of social security has already pushed most stocks up to ridiculous P/E ratios. That's a worse pyramid scheme.

I find it amusing that like so many benevolent sounding programs (like 'environmental sustainability', and 'right to choose') the Social Security program's only real avenue to true sustainability is to kill as many people as possible when they are no longer convenient.

^ gb2freep