In regards to our unsustainable Social Security system, it was a breath of fresh air to see a politician, in this case Governor Rick Perry, finally tell the American people the truth.
In this article, we will expose our Government administered Social Security as a very bad financial arrangement for those who contribute funds into the system, over their entire working career.
We will go on to demonstrate that by allowing the average citizen to keep their monies in their own personal retirement savings account, most workers could retire as millionaires at age 65.
Is Social Security a Ponzi Scheme?
Let’s take a look at the definition of a Ponzi Scheme to determine if Social Security falls into that category.
A Ponzi scheme is a fraudulent investment operation that pays returns to separate investors, not from any actual profit earned by the organization, but from their own money or money paid by subsequent investors. The Ponzi scheme usually entices new investors by offering returns other investments cannot guarantee, in the form of short-term returns that are either abnormally high or unusually consistent. The perpetuation of the returns that a Ponzi scheme advertises and pays requires an ever-increasing flow of money from investors to keep the scheme going.
The system is destined to collapse because the earnings, if any, are less than the payments to investors.