The king of Ponzi schemes was an amateur compared to this
Ten years ago, a man was forever separated from his $40,000 slippers.
Posing as an investment firm for decades, Bernie Madoff’s company defrauded thousands of investors out of their money.
In 2009 Madoff was sentenced to 150 years in prison for running the $64 billion Ponzi scheme.
That is considered the largest financial scam in US history, and the largest Ponzi scheme in world history… but that’s not exactly true.
The US government’s method of providing retirement benefits is an obvious Ponzi scheme.
Social Security depends on at least 2.8 workers to pay the benefits of every one retiree.
That would require an ever-growing population to support retirees. In a pyramid scheme, the base layer always has to expand to cover the smaller layer above it.
But ten years ago, the fertility rate in the USA took a huge hit. Five million babies were never born, likely because of the recession. And now the fertility rate is the lowest in decades. By 2035, there will be just 2.2 workers for each retiree.
Back in 2009, the Social Security Administration thought its scheme would go strong until 2039, when the trust fund would run out. Now that doom’s day estimate is down to 2034.
More people than ever depend on Social Security to make up a large portion of their retirement income. 64 million people now collect, up from about 55 million a decade ago.
Among the elderly, one-fifth of married couples and almost half of unmarried persons depend on Social Security for 90% of their income.
Social Security represents about ⅓ of all retirement income among the elderly. 9% of Social Security recipients are already in poverty, and the Census Bureau estimates 40% of current recipients would be in poverty without it.
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