The Singularity… and the Trillion-Dollar Ponzi Scheme
At a recent campaign function Barack Obama said our money invested in the market had less value now than the money sitting safely in Social Security. A quick look at the financial papers sure shows massive drops in the value of stocks and bonds, and other investments. Real estate, once the national piggy bank, is no longer a safe bet either.
So, a nice steady check from the government appears to be the safest place for your money.
It sounds right. But is it?
By its very definition, Social Security is a Ponzi scheme. It takes money from new workers (investors) to pay off retired workers (prior investors). Social Security is a little more successful than most Ponzi schemes because masters of regular schemes run out of new investors, fold, and go into hiding–or jail. With its power to tax, throw you in jail, seize your assets, and even send the SWAT team to your house, Social Security can last longer.
Even with that power, Social Security can not defy the laws of financial physics forever. If you look at the books, the dollar that you and your employer donated to Social Security is long gone. In fact, based on expected receipts, it’s into negative numbers. Even if the stock market can’t go below 0.
When Social Security was created birth rates were increasing, a trend with no signs of ending. That is no longer the case. And, as the Singularity dawns, people will be living longer. A lack of new investors coupled with increasing demands of current investors spells a serious problem for any Ponzi scheme.
The sad fact is Social Security’s books look like a monster Enron.
There are some moves afoot to change that. Making rich people pay more is always the obvious solution. But, pulling money out of productive people to bolster up a non-productive entity is never wise economically. Like fixing up that old Volkswagen Rabbit I used to own–my increased contributions in repairs never really changed the fact that it was a dilapidated vehicle.
So, is it all bad? Even as the Singularity begins to stress investment systems like Social Security, it will also uncork innovation on a scale never seen before. Using the power of exponential computing gains, investments and wealth will increase at a similar dramatic scale.
It’s one of the reasons why we are now creating investment systems powered by advanced technology. Our belief is that this will deliver the power of exponential wealth gains to regular investors and traders. Once this is achieved, our reliance on Social Security and other non-returning investments will decrease and the taxes put in place to ensure our station in the workaday world will be mere speed bumps on the highway of increasing gains.
Related posts:
- How To Run A Ponzi Scheme
- Secret #1: Social Security is a Ponzi Scheme
- Secret #5: The Largest Ponzi Scheme in the Country is Medicare
- The Secret ‘Get Rich Never’ Scheme Of Financial Advisers
- Madoff’s $50 Billion Scheme: What Should the Government Do?
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is one of my favorite financial books of all time. It's an allegory about a guy who has a terrible job, and how he overcomes challenges to achieve his dreams.
