The Crown Jewel of Ponzi Schemes

How much do you think you have paid into the social security system over the years?  Do you think you’ll get any of that back?  Do you think that the social security system is actually a savings system? What if you save the monies taken from you, rather than paying into a system which actually only functions because of the newbies paying into it, just like a ponzi scheme?

Some of these questions are looked at in a piece at the Mises Blog titled What If Social Security Were Completely Scrapped?

From the piece.

Some recent studies on personal saving indicate that some people worry too much about retirement, and overlook current consumption. Some of the misconceptions concerning American retirement funding may come from the financial industry. Economist Lawrence Kotlikoff has tested the retirement calculators on the web sites of Fidelity, Vanguard, American Funds, and TIAA-CREF, and found the savings recommendations ranged from 36 to 78 percent too high, compared to his software’s calculation. According to Kotlikoff “The simplistic calculators on companies’ web sites are primitive tools that have no connection to modern mathematics or economic theory,” he says. “Five-second financial checkups are really financial malpractice.” Also, “There is a risk from overdoing it when you’re young — you squander your youth rather than your money,” he says. “It makes no sense to have a huge bundle in your 401(k) and have not gone to Hawaii, or gone skiing with the kids. It’s not all about the end game — it’s about the middle game and the short game, too."

Posted by on 06/18 at 11:43 AM

Name:

Email:

Location:

URL:

Smileys

Remember my personal information

Notify me of follow-up comments?

Submit the word you see below:


Next entry: Hey, Al Gore, Maybe You're Bitchin' About the Wrong Thing

Previous entry: Slanderous Blather from the Boston Globe Editors

<< Back to main