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ET EXTRA: Is Social Security A Ponzi Scheme?

04 Oct

fire Engineering Thinking Extra Is A Short Review Of A Current Hot Topic
 
 
 
Analysis: Using the generally-accepted definition of a Ponzi Scheme from this article…

The Williams plan to avert Social Security disaster” by Walter Williams, 10/03/11, washingtonexaminer.com

…and considering the following data from the article…

According to a 2002 Congressional Research Service report titled “Social Security Reform” by Geoffrey Kollmann and Dawn Nuschler, workers who retired in 1980 at age 65 got back all they put into Social Security, plus interest, in 2.8 years.

Workers who retired at age 65 in 2002 will have to wait a total of 16.9 years to break even. For those retiring in 2020, it will take 20.9 years. Workers entering the labor force today won’t live long enough to get back even half of what they will put into Social Security.

…then yes, it is reasonable to refer to Social Security as a Ponzi Scheme.

-Ed Walker

 

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