Ponzi Schemes Revisited

The light of day has fallen on The Social Security ponzi scheme.  For the first time, those who retire today will have paid more in social security taxes then they will receive in benefits. We have come along way since 1960 when one could expect to get back 7 times payroll taxes paid.

In 20 years, when the so called trust fund runs dry, the promised  benefits will fall by 25%.  If we want to keep benefits from falling we will just have to pay higher payroll taxes.  It is only a matter of time before the kids figure this out and force politicians to get real..

I wrote a blog a year ago about another federal ponzi scheme called Keynesian Economics.  This theory defies common sense.  Keynesians would have us believe that if you take from Peter, which will dis incentivize him  to increase his productivity , and give to Paul who will be convinced that there really is a free lunch, that this will produce a multiple increase in our national income (GDP).  Well just look at the scoreboard.   We have increased government spending in the last 3 years by over 8%, yet real GDP has fallen.  If my math is any good, that looks like a negative multiplier.

Academia considers the likes of President Obama and Paul Krugman as Keynesian intellectuals.  My definition of an intellectual is a person born with a high IQ and zero  common sense.  Once again,  "the emprorer has no clothes".  Even  Keynes  would have agreed with the recent Ernest and Young study that if  the President's plan to raise tax rates becomes law, it will kill over 700000 additional jobs.

Ray Zimmerman
Sagle