THE ABSENCE OF THE PROFESSORS! Disinformation never sleeps!

THURSDAY, SEPTEMBER 22, 2011

PART 4—NO WAY OUT: If you’re an American voter, it’s amazingly easy to get disinformed about Social Security.

The disinformation campaign has been under way for thirty years—and the campaign continues. Just consider the column by an economics professor in today's Baltimore Sun.

The professor in question is Peter Morici, one of the carnival barker-style professors who get big play on cable news—even on network news programs. Morici is from the University of Maryland; this makes him geographically convenient to cable bookers. And he sports a trademarked, bow-tie conservative look—the look that pre-announces a cable guest as a pseudo-conservative fraud.

When cable guests wear uniforms, viewers can watch the ensuing debates with the sound turned off!

Beyond that, Morici is skilled with his disinformation. This is the way his op-ed column starts in this morning’s Baltimore Sun. We’ll use the headline from our hard-copy paper:
MORICI (9/22/11): Yes, Social Security is a Ponzi scheme

When established in 1935, Social Security made its first payments to Americans age 65. These first recipients never contributed and were paid from contributions made by younger Americans. Those Americans and successive generations believed their contributions were investments, and that they would be paid at retirement by the earnings on those investments.

In fact, those younger Americans were paid by the contributions of successive generations of "investors," as the federal government spent their money to help finance operating deficits. With the ratio of retirees to contributors rising, the Social Security Trust Fund will run out of money by 2036, if not sooner.

Such a scheme could only continue if the working-age population grew more rapidly than the number of retirees, but it hasn't because Americans live longer and the birth rate has declined.

President Barack Obama's claims notwithstanding, Social Security is now a growing burden on federal finances, as the difference between the trust fund's income and what it pays out grows each year. As we approach 2036, either payments will have to be drastically curtailed or the government will have to shut down, on a massive basis, other activities.

Either Social Security fails, or the United States fails.
Let’s be fair. As noted, Morici is a full professor at a major university. For that reason, it’s possible he’s so goddamned dumb that he wrote this piece in good faith.

It’s possible, but we’d call it unlikely. Morici’s piece extends a disinformation campaign which has run for more than three decades. And sure enough! Through this morning’s column, Maryland voters will get disinformed again.

Will other professors speak up in protest? If the thought even enters your head, you must live on the far planet Zarkon. Except for hustlers like Morici and the occasional outlier like Paul Krugman, American professors sold you out a very long time ago.

The professors keep their big traps shut. They’re too busy screwing their graduate students or composing their latest thoughts on Jane Austen’s use of the colon. Other professors will not voice a challenge. That said, consider the standard disinformation Morici has spewed on the land:

“With the ratio of retirees to contributors rising, the Social Security Trust Fund will run out of money by 2036, if not sooner.”

Based on current projections, that is an accurate statement. But such truncated presentations have been a key part of this scam over the past thirty years. After the trust fund runs out of money, Social Security will of course continue to function—but voters don’t understand that fact. Truncated sound-bites of this type are intended to keep the public confused on this point, building the sense of alarm.

“As we approach 2036, either payments will have to be drastically curtailed or the government will have to shut down, on a massive basis, other activities.”

It all depends on what the meaning of what “drastically” and “massive” are! Presumably, Morici has heard of numbers, a fairly well-known recent invention. In this matter, numbers can be used to flesh out this highly alarming statement. In fact, if we make no changes at all to the current system, Social Security will continue to pay perhaps 80 percent of promised benefits after the trust fund runs out. It would have been easy for Morici to include a number like that in his column. But how strange—he never does! The tyranny of disinformation requires its hacks to make imprecise, frightening claims.

We’ll have more to say about that second quotation below. It will have an Yglesias tie-in—but for now, understand this:

Nowhere in this op-ed column does Morici attempt to quantify the alarming terms “drastically/massive.” (On that basis alone, the editor who accepted that column would be on his way out the door in a true journalistic culture.) In a similar vein, Morici fails to tell readers how easy it would be to eliminate that projected shortfall through minor tax increases.

Duh! Kevin Drum explained how easy it is in this September 12 blog post. You may not choose to make the adjustments Drum describes, but if you don’t understand the facts Drum cites, you don’t understand this topic. Presumably, Morici does understand the numbers involved here. True to his role in a long campaign, he just doesn’t want to tell the public about them.

As he continues, Morici decides that private accounts won’t work. His solution to the Ponzi problem is presented in this, the thrilling conclusion to his column. By now, Morici is basically lying—with the acquiescence of an editor at the Sun:
MORICI: In the end, the only way to make the system work is to ask Americans to work longer. If Governor Perry or Mitt Romney wants to fix the system, instead of arguing over terminology, they must address the retirement age. It simply must be raised to something close to 70, with no exceptions but for the truly disabled.

Americans won't like that, but it beats what President Obama is offering. Characteristic to his thinking on economics, he prefers to believe what his liberal ideology, not the facts, require—and incorrectly insists the system is solvent.

Social Security, by the findings of Mr. Obama's own Social Security Administration, is insolvent and hence is indeed a Ponzi scheme. Americans seeking dignity in retirement would be better served by hearing the truth.
Social Security isn't “solvent?” That’s another scary locution—and of course it all depends of what the meaning of “solvent” is! But surely, this professor understands that he’s basically lying when he says this: “The only way to make the system work is to ask Americans to work longer.”

In fairness, that is one of the ways to erase that future shortfall. But plainly, it isn’t the only way. This music man understands that fact. (Presumably, so does the editor.) He is just determined to keep that fact from Maryland voters.

Con men like Morici have been at this game for the past thirty years. Morici has made himself rather famous playing this game in the past few years, even as he has worked to make the nation’s voters dumber. Let’s return to that earlier question:

Should you expect to see pushback from any other professors? Should you expect to see letters from other professors in the Baltimore Sun’s letters column? Should you expect to see other professors denouncing Morici by name on TV?

Will you read a column by some other professor explaining the fact that a disinformation campaign has been running for the past thirty years? That progressives and tea party members alike have been disinformed by this scheme?

Of course you won’t see such actions! The nation’s professors walked away from their obligations as citizens many decades ago. Graduate students have to be screwed—and someone must use that villa in France! You will not see such pushback in the next few weeks. Nor will your mewling career liberal journalists name the names of the horrible people who are running this evil campaign.

To understand the culture within which this campaign has flourished, let’s recall a few things we have looked at this week:

In the late 1990s, the New York Times asked an eminent economics if he wanted to write a twice-weekly column. Luckily, this professor said yes. But in a fascinating profile, Larissa McFarquhar described the reaction from this professor’s colleagues.

Robin Wells is Paul Krugman’s wife. She too is an economist:
MCFARQUHAR (3/1/10): When the Times approached him about writing a column, he was torn. “His friends said, ‘This is a waste of your time,’ ” Wells says. “We economists thought that we were doing substantive work and the rest of the world was dross.” Krugman cared about his academic reputation more than anything else. If he started writing for a newspaper, would his colleagues think he’d become a pseudo-economist, a former economist, a vapid policy entrepreneur like Lester Thurow? Lester Thurow had become known in certain circles as Less Than Thorough. It was hard to imagine what mean nickname could be made out of Paul Krugman, but what if someone came up with one? Could he take it?
Luckily, Krugman took the job. But McFarquhar suggests that the nation’s professors think they’re above such work. Let’s be honest—most of these people couldn’t explain how Social Security works if they tried. (Is the left hand borrowing from the right? They wouldn’t know how to unpack that!) But these professors aren't inclined to try; they don’t accept their duty as citizens. They seem to think it’s a waste of their time to speak to the nation’s rubes.

In 1996, this same professor betrayed a hint of this attitude. By his own account, Krugman was still “sleepwalking” at this point; he too wasn’t bothering himself with mere politics. Presumably, that explains why he wrote a bungled piece for the New York Times Sunday Book Review section, a piece he renounced three weeks later:
KRUGMAN (11/12/96): First of all, a mea culpa of my own. Ignore Galbraith's coyness: I was the economist who went overboard in supporting Pete Peterson's position on entitlements and demographics. Demographics play a smaller role in Peterson's forecasts, and debatable projections of medical costs a larger one, than I realized when I recently reviewed his book for the New York Times. I broke my own rule that you should always check an argument both with a back-of-the-envelope calculation and by consulting with the real experts, no matter how plausible and reasonable its author sounds. Do as I say and normally do, not as I unfortunately did in this case.
Oof! Still sleepwalking at this point, Krugman behaved like those other professors. Writing on a major topic for a very influential publication, he didn’t bother checking Pete Peterson’s argument. Reason? Peterson sounded so good!

Today, Krugman is our most valuable player. Back then, in that blithe response, he described irresponsible conflict—the type of conduct one can expect from the bulk of the nation’s professors. He also explained how a disinformation campaign has proven to be so successful.

Let’s mention Dean Baker, who wrote a letter to the Times in 1996 challenging Krugman’s review. In 1999, Baker and Weisbrot wrote a very important book, Social Security: The Phony Crisis. Unfortunately, the book is too technical for general use—and no professor, think tank or liberal journal has ever created a simplified, voter-friendly version of this essential information.

The professors are too lofty for such work. You can explain the sloth of the liberal journals any way you like. That said, let’s return to our first report in this series—to Matt Yglesias’ murky attempt to explain how Social Security works. Thirty years into this endless scam, this is the best description of Social Security our beautiful minds can manage:
YGLESIAS (9/16/11): So to review, roughly speaking we have two kinds of people in America. We have people who are paying Social Security taxes and we have people who are receiving Social Security benefits. For the past several decades, the quantity of tax revenue coming in has exceeded the quantity of benefits being paid out. That is projected to flip around, creating the need to either redirect some additional financial stream into the Social Security system in order to repay the rest of the government’s debt to Social Security or else to reduce Social Security benefits or else to increase Social Security taxes.

The choice among these options is what the Social Security debate is about, if the Social Security debate is about funding Social Security.
That highlighted passage is clear as mud. But thirty years into this endless scam, it’s the best our beautiful minds can produce. Steve Benen made a point of saying how clear that bafflegab was!

The professors have failed you; the children can’t function. That’s the state of the liberal project thirty years into this scam. But people! On Monday, we said the first part of Yglesias’ explanation echoes one of the newer talking-points which are used in this campaign. We said this new point is hard to search for. But we said we’d get back to you on it by the end of the week.

Luckily, Morici folds that talking-point into his scam-heavy column. When Social Security revenues no longer equal the benefits being paid out, will that somehow create the need to “redirect some additional financial stream into the Social Security system in order to repay the rest of the government’s debt to Social Security?” That bafflegab echoed a new talking-point. Here we see a version of same, Professor Morici-style:
MORICI: President Barack Obama's claims notwithstanding, Social Security is now a growing burden on federal finances, as the difference between the trust fund's income and what it pays out grows each year. As we approach 2036, either payments will have to be drastically curtailed or the government will have to shut down, on a massive basis, other activities.
Morici is speaking about the years before the trust fund is exhausted. As he has been instructed to do, he says we will have to shut down other activities, on a massive basis, to make up for the annual shortfalls. (More conventional hustlers add a second option: Or we will have to raise taxes!) That statement is grossly misleading, of course; in the years before the trust fund expires, the shortfall will be covered by the Social Security trust fund. Money borrowed from the trustees will be repaid, just as we’ll repay the money we’ve borrowed from banks in China. Morici is simply creating more confusion about this process, just as it has been written.

In the bafflegab we’ve highlighted, Yglesias seemed tangled up in that talking-point too. Such is the work of the liberal world’s most beautiful minds as this campaign keeps advancing.

The professors don’t care; the careerists can’t function. What should liberals do about this?

We will have to leave that question for another time.

Back to Hacker: For other mordant thoughts about the priorities of the professors, we again recommend the Andrew Hacker/Claudia Dreifus book, Higher Education. The authors write from deep inside the academy they have betrayed.

19 comments:

  1. Ok, a Ponzi scheme. Lots of economic systems involve money going in and money going out, often at different rates. What is different about a Ponzi scheme in a relevant way, is that fraud, the intent to deceive, or bad faith is involved. What makes Social Security and indeed any debt obligation assumed by the government not a Ponzi scheme is that the government stands behind such debts and obligations as a guarantor. That federal guarantee to state behind obligations has always been assumed, taken for granted in a very sweeping way. But that's an assumption that is now under challenge. During the debt ceiling debate, we as a nation seriously contemplated breaking our promises, dishonoring our debt. We did pull back from that brink but dishonoring our debt is still on the table. We have made these same kinds of promises with respect to Social Security. As long as we stand behind them, honor our promises, SS is not a Ponzi Scheme. The national debate we are having isn't so much about whether Social Security is a Ponzi scheme, rather it's about whether it should be turned into one.

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  2. I had Prof. Morici for Macroeconomics 101 when he taught at the University of Maine. He didn't wear a bow-tie then, nor do I recall him being the con(servative) show-man that he is today. I recall his class being entertaining as he was quite a loud character, a short Sicilian man with a Napoleon complex and a NY/NJ sense of humor. Never would have guessed he was this dishonest.

    I remember one day he came into the lecture hall and told us to throw away our notes from the previous class because they were all wrong. A high school classmate and I were both in the class, and neither of us were very impressed with his teaching, his entertaining personality aside.

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  3. I don't understand why BS thinks that Yglesias' highlighted comment is unclear. Right now, revenues > expenses, so sending out SS checks is no problem. When revenues < expenses, one of three things will have to happen. 1. Lower benefits. 2. Higher payroll taxes. 3. Begin relying on the SS "trust fund," which means that the Treasury will have to begin repaying its debt to that fund, which means that the Federal Government will either have to cut spending elsewhere or raise income taxes or increase its borrowing and thus, as Yglesias says, "redirect some additional financial stream" into SS.

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  4. Hey Bob! I've been a huge fan for many years, and yes, I'm a professor, so I've been waiting for you to turn your sights on our "cohort." But I think you are aiming at the wrong target here. Not because the professoriate is blameless--quite the contrary.

    It's one thing to criticize journalists for not being good journalists (as you have done so effectively over the years) and another to criticize professors for not being good journalists. It would indeed be a good thing for professors to all become effective public intellectuals in their spare time, but before we professors turn our attention to educating the American people in general, I think we need to do a better job of educating undergraduates in particular, a task that falls under our actual job description. So if you want to criticize professors, my advice is to start there. Believe me, you will find plenty of fodder, without having to resort to cheap shots about sleeping with grad students.

    Just out of curiosity, Does Prof. Elizabeth Warren pass the test?

    http://www.youtube.com/watch?v=akVL7QY0S8A

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  5. "MORICI: In the end, the only way to make the system work is to ask Americans to work longer. If Governor Perry or Mitt Romney wants to fix the system, instead of arguing over terminology, they must address the retirement age. It simply must be raised to something close to 70, with no exceptions but for the truly disabled."

    His prescription will likely not balance the books because he's not thinking ahead and looking at what happens when EVERYONE works longer and puts off retirement. When a small fraction put off retirement, then there can be savings in the SS program and it will help balance the books. But when everyone works more, you'll end up keeping youth unemployment high and keep salaries/wages of new workers low. Raising the retirement age keeps older workers around longer and therefore keeps them in what could have been an open position for the young or middle-aged. This will keep the economy weak by keeping a big chunk of the youngest generation out of work for a longer period of time and keeping the middle-aged in lower-paying positions for longer too. This lowers their overall lifetime earnings and spending, which means they pay less in taxes toward Social Security--unless they too work longer and the retirement age is raised again. This is a trap.

    If you want to raise the retirement age, you need to generate tons of new jobs for younger workers to take. If you're not generating new jobs (and we aren't today and probably for the foreseeable future), then you need to lower the retirement age to open up positions for new workers. Morici is advocating the exact opposite of what needs to happen if we are to have an economic recovery.

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  6. Morici is incredibly dishonest and is doing untold damage with his comments. This bow-tied clown is all over the media (including C-SPAN) because he is very loud, very animated, very opinionated and comes across as very confident about the BS he is pumping out. Is there any hope for Social Security surviving under this massive tsunami of lies and disinformation? I just give thanks to FDR every month when my SS benefit is electronically deposited into my bank account promptly at 12:00AM on the fourth Wednesday of the month. When I was working, I paid the wage tax which went towards my retired mother's SS payment and those of my other retired relatives. I do pay taxes on my SS benefit but it's a small price to pay for such a wonderful and amazing benefit. While the stock market tanks and 401(k)s have been decimated, SS just keeps humming along. Just raise or eliminate the cap on the SS wage tax. Problem solved for generations.

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  7. @bolo

    Very, very well said, and it's a point few people stop to consider. Seems to me we'd be far better off if we offered incentives for people to retire and get the heck out of the job market instead of forcing them to hang onto their jobs as long as possible just in order to survive.

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  8. "Presumably, Morici has heard of numbers, a fairly well-known recent invention."

    I LOL'd.


    To be honest, I have no idea why anyone is talking about Social Security. Yes, it's a pyramid scheme - anyone who denies that on some flimsy premise like "it's not illegal" is delusional. It's absolutely a textbook pyramid scheme. And of course people like the most recent Anonymous think that's no problem, as long as they're getting their checks. "Hey, if that's a problem, just raise taxes on those working schmucks! Who cares, as long as I get my check!"

    But put all that aside. Take social security's problems, multiply by 10, and you've got Medicare. Medicare is threatening to basically eat up the entire economy if we let it. It's a way bigger problem than Social Security. But dealing with Medicare is difficult, and requires making difficult choices. So instead we talk about Social Security, which is really a penny-ante problem even though it is a textbook pyramid scheme.

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  9. Oh, what a horrible person I am, I'm practically a felon.... because.....I.... am....a....Social Security.....recipient. But wait, it gets worse, I also receive a defined benefit public pension which makes me an evil vampire feeding off of the young. Never mind that I contributed to these programs my whole working life. Bernie Sanders says raise the cap on the wage tax and problem solved. Alan Greenspan, of all people, has said that SS is not in crisis and its long term problems can be solved by any number of minor tweaks or fixes. It does not need major surgery. How the hell is SS a pyramid scheme when there is no Ponzi or Madoff siphoning off huge amounts of money for their private gain. It's administrative costs are very minimal. The books are open on SS, the books are not open for a Ponzi scheme or a pyramid scheme. Can we please can this shit about a pyramid scheme, it's getting old. Is auto insurance or health insurance a Ponzi or pyramid scheme? Medicare is in trouble because of the high cost of health care overall in this country. If we had single payer or Medicare for all, which could negotiate for lower drug prices (like the VA), the cost of health care in this country would go down. Private health insurance costs are going through the roof, never mind Medicare. We do have about 50 million uninsured in this country.

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  10. "The national debate we are having isn't so much about whether Social Security is a Ponzi scheme, rather it's about whether it should be turned into one."

    Thank you for the first post in this string, Anonymous. It helped clarify things for me -- and that doesn't happen often!

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  11. I can't believe we're even debating whether or not it's a ponzi scheme, when up until 2 years ago few people even knew what that term meant. I doubt many know what it means today, but it has the word scheme in it.

    I think part of the problem is that the liberals who have a soapbox aren't going to depend entirely on SS for their retirement. They'll have a decent 401k or whatever they invent in the future, perhaps some more risky investments, and they'll be alright.

    But liberals aren't ever going to have a good defense of SS because it's a fundamentally illiberal program. Contrary to what clowns like Kevin Drum say, it's proved that the government can do a great job fighting poverty. The problem is that, unlike other attempts to fight poverty, it doesn't give out some help to find a job or fiddle around with minor incentives. No, it just plain takes large amounts of money from people who have it and gives it to another group of people who's less likely to have it. Career liberals hate shit like that, which is why they go on and on about jobs while talking almost never about the need for people to get incomes. Liberals tolerate handing out money to the old and disabled people, but deep down inside they're distrustful of such systems and that's why you'll never see a single Democrat, progressive or otherwise, advocate for a minimum guaranteed salary paid for by the government, a proposal that would work wonders for increasing consumer demand and improving workplace conditions as work would then become a choice.

    Too bad there isn't a decent left in the US, but the problem there is that it takes so much money now to get people's attention and the left is, by definition, poorer than the right. A hundred years ago a guy screaming the truth from a street corner or an informed person giving a talk after church or a union organizer handing out pamphlets was a way to get working people informed even if corporate media was doing its best to keep them ill-informed. Nowadays they have to compete with flashy TV, well-produced talk radio, glossy magazines that pretend they care about average folks, and a highly developed, well-funded propaganda machine that's had decades of experience making people dumb. The best written pamphlet in the world doesn't stand a chance against Glenn Beck.

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  12. Anonymous up there is doing too much LOL-ing and kneejerking and nowhere near enough thinking.

    "Hey, if that's a problem, just raise taxes on those working schmucks! Who cares, as long as I get my check!"

    News flash. Reagan did that back in the '80s, and we Boomers have been paying extra payroll taxes our entire working lives in order to build up the Trust Fund so that there'd be enough for our benefits when we retire.

    Another news flash. We Boomers are going to be just fine, thank you very much, without changing a thing. It's you younger guys who need to decide what you're going to do so that you get yours.

    Third news flash. Nobody here is talking about "raising taxes" on "working shmucks" to provide *your* future SS benefits. You just made that up. Unless you consider people making well over the six-figure income cap on contributions as "working shmucks." I don't.

    "But dealing with Medicare is difficult, and requires making difficult choices." Yeah, heard that one before. "Difficult choices" always means "easy for me, difficult for the people who need those benefits to survive."

    I think you'd be happier ranting over at Redstate or something.

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  13. When a professor offers an honest, educated opinion piece in our local paper, he gets a massive ration of abuse from the uneducated, disinformed Fox viewers, demanding that he be fired.

    Damned if they are going to have their taxes pay for one of these socialists!

    So, I can cut some professors a little slack. Others, like Morisi, get my contempt.

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  14. I'm an actuary. SS isn't illegal, but in other respects it is a Ponzi scheme. If you buy a retirement annuity from a private insurance company, the company keeps your contributions. Your contributions and investment income on those contributions are used to pay your benefits. In a Ponzi or pyramid Scheme, your contributions are used to pay current beneficiaries. When you retire, the only way to pay you is to get money from new entrants into the system.

    Somerby says that SS payments will continue even when the Trust Fund is used up. I assume he means that SS payments can be made from the general fund. In principle that's true. However, the current budget has a deficit of $1 1/2 trillion. There's no extra money there to prop up SS.

    If one looks at SS as stand-alone program, then the ratio of payers to retirees is the key statistic. E.g., if the ratio goes to 2 to 1, then in order to pay a retiree, say, $30,000/year, SS would have to collect $15,000 per year on average from each worker. That's $7500 from the worker and $7500 from the employer. Meanwhile Medicare costs are rising to become even greater than SS. Taking over $15,000 per year from each salary just to cover SS and Medicare is out of the question.

    In short, as the ratio of payees to beneficiaries goes down, Current SS benefits will become unaffordable. So, it's unfortunatly true that today's young workers will not receive benefits nearly as generous as today's retirees are getting.

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  15. No, David in Cal, you're wrong. A Ponzi scheme is fraudulent: it promises unusually large returns, which can only be supported by the number of investors multiplying, and the scheme will collapse when the number of new investors flattens out or declines.

    Social Security does not promise unusually large returns, instead it promises unusually flat returns, and checks those against conservative estimates of revenues and 'Social Security trust fund' savings. Social Security, according to its own actuaries, is projected to have a shortfall in revenue in 25 years that can be fixed by a variety of minor adjustments. The best of these IMHO, involve increasing Social Security taxes on the upper middle class and the rich.

    Yes, the explosion in Medicare costs is a major problem. But, uh, weren't we talking about Social Security? Clarity of thinking is not helped by jumping off topic.

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  16. Actually, Ponzi Schemes come in all shapes and sizes. Some of them are tailored for the cautious and conservative investor, and don't promise unusually large rates of return.

    "In a Ponzi or pyramid Scheme, your contributions are used to pay current beneficiaries."

    I suppose this is true of Ponzi schemes, but it's true of non Ponzi economic systems as well. The money you pay into a corporation for the purchase of goods, pretty much immediately flows out to pay for the cost of goods. The Ponzi-ness of a scheme isn't determined by inflows and outflows of cash, it relates to whether such inflows and outflows are based on fraud, or I would add, bad faith.

    Whatever other issues surround Social Security, I would argue there isn't a fraud issue here. The way Social Security is financed is well understood. We also understand the problems with the system because they have been thoroughly and accurately explained to us by the officials charged with administering the program. Nobody is seriously arguing that they are lying to us, concealing material information from us, or acting in bad faith.

    The problem and what could reasonably be argued, the Ponzi comes when commitments that were made, and which were reasonably relied on by people who had a right to rely on them, are broken. Such would be the case if we made the political decision to dishonor the bonds which constitute the social security trust fund. Furthermore, I would also argue that besides the bonds, which represent a defined legal commitment, there is also an undefined commitment by the United States to adequately fund the system apart from the bonds, which continues into the future. It's my position, and it's a disputable one, that if we broke that moral commitment, then Social Security would at that point, become a Ponzi Scheme.

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  17. Something really brutal and basic to understand about fraud in general, and Ponzi schemes in particular is that they don't work. They blow up in our faces in relatively short order. That's why we view these things so harshly. Despite its quirky and unique construction, Social Security works remarkably well. A system created 70 odd years ago, by New Deal economists and actuaries using state of the art adding machines, with a few tweaks along the way, is working just fine today. We now understand that there might be a problem in the year 2037, roughly a hundred years after the system was created. We also now that even those problems can be corrected with a few tweaks in the system now. If our legislators can solve a problem for a hundred years using a Ponzi Scheme, I say more power to them.

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