Sunday, July 26, 2009

Is Social Security a Giant Ponzi Scheme?

From Fool.com

Jim Cramer has called Social Security the largest Ponzi scheme in history. To an extent, he's making a valid comparison. Like a Ponzi scheme, Social Security pays its benefits out of new contributions, rather than out of investment returns. Also, like a Ponzi scheme, Social Security is in the process of collapsing under its own weight. According to its most recent annual report, the Social Security trust fund is expected to be exhausted by 2037. With similarities like that, it's no wonder Cramer felt he could make the comparison.

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