Stop repeating propaganda please. Entitlement programs are just simple insurance programs. There is nothing ponzi about them.
Social Security isn't a Ponzi scheme in the sense that there was fraudulent intent. Nevertheless, a lack of political will to finance current benefits does burden future generations. "Adjusting benefits downwards" won't sit too well with people who worked 30 or 40 years and expect to enjoy a certain standard of living.
Why Was Social Security Designed Like A Ponzi Scheme? https://www.forbes.com/sites/johngoodman/2015/08/13/why-was-...
Is Social Security a Ponzi scheme? "Social Security has a funding gap equal to 0.7 percent of GDP over the next 75 years. We could wipe that gap out by lifting the payroll tax cap (right now, payroll taxes only apply to the first $107,000 of income) or by adjusting benefits downwards." https://www.washingtonpost.com/blogs/ezra-klein/post/is-soci...
Social Security is an insurance program. That you don't understand how insurance programs work is your problem.
https://www.ssa.gov/oact/tr/2015/tr2015.pdf
> Total expenditures in 2014 were $859 billion. Total income was $884 billion, which consisted of $786 billion in non-interest income and $98 billion in interest earnings. Asset reserves held in special issue U.S. Treasury securities grew from $2,764 billion at the beginning of the year to $2,789 billion at the end of the year.
This is not in any shape or form a ponzi scheme.
Which the generally accepted way of analyzing insurance programs is by looking at the inflow and outflows plus interest on reserves.
> which in the early stages of a ponzi scheme can also be similar
The Social Security Act passed in 1935.
> The way that social security in the US is a ponzi scheme is that the benefits paid out are not interest or earnings on the amounts paid in by the people receiving the benefits. They are paid for by new people paying in to the system. That is almost the definition of a Ponzi scheme. That is almost the definition of a Ponzi scheme.
No that is the exact definition of an insurance program. Insurance programs are not investments they are about spreading risk. Which the Social Security Program in the US does a perfectly fine job of.
Social security is a pension. It guarantees a future stream of income in return for payments now. It is subject to the same actuarial risk as insurance (so, predicted payout period ends up being longer than expected, or returns on payments are lower than expected), but it is subject to an additional risk if it is unfunded (which Social Security is). That risk being that inflows become insufficient in the future to cover the outflows promised 40 years prior.
That being said, the important distinction still stands: Social Security is unfunded, which makes it subject to a kind of risk that funded insurance programs are not exposed to.
No.
> It protects you against a loss of some kind,
Social security protects you against outliving your savings when you can no longer work.
> and only provides that protection while you are paying for it.
This is an argument from ignorance. And it's incorrect.
For another, it’s still not a Ponzi scheme. It makes no promises for returns, and simply requires working age people to set aside money for retired people. If the ratio changes, there is no requirement for the retired people to be paid the same money they were a year ago.
It’s not a Ponzi scheme in any fashion. It’s pretty much a direct, transparent transfer of wealth from the young to the elderly.
Social Security isn't a ponzi scheme for a number of reasons, first it's not a security. Second there is no nonexistent enterprise. Instead it's structure is entirely that of an government mandated insurance program.