“Over Christmas break, many of you may remember how the former chairman of the NASDAQ, Bernard Madoff, was caught running an elaborate Ponzi scheme on dozens of prominent investors, costing them upwards of 50 billion dollars. This kind of money management was perhaps the last thing Americans wanted to see with the state of the economy, as they will certainly be wearier of investors.”
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Over Christmas break, many of you may remember how the former chairman of the NASDAQ, Bernard Madoff, was caught running an elaborate Ponzi scheme on dozens of prominent investors, costing them upwards of 50 billion dollars.
This kind of money management was perhaps the last thing Americans wanted to see with the state of the economy, as they will certainly be wearier of investors. But why should Madoff be prosecuted? He was acting intelligently on his analysis of every single American taxpayer.
Yes, we’re all contributing to the government’s own Ponzi scheme whether you know it or not, called Social Security and Medicare.
For those who don’t know, Madoff’s Ponzi scheme involved getting clients’ money, only to pay off other investors with dividends. He kept getting more clients to pay off his debts, and with his credentials his fickle followers were opening their checkbooks with little reluctance, hoping to get large returns on their investments.
This is no different than what the federal government does with the unconstitutional Social Security and Medicare systems.
Taxpayers sign away a percentage of their pay in order to fund someone else’s retirement. However, this was not the original intent of the program.
When FDR signed Social Security into action, one’s money was supposed to be put into a trust fund, available for withdrawal when that individual turned 65 years old.
This was a convenient age for FDR to choose, as the average life expectancy of Americans in 1935 when the act was penned was 61.
Thanks to the advancement of vaccines and medical technology, the average age of Americans is now 80 years old. This sounds great, but for Social Security this means trouble, as now taxpayers are actually living long enough to collect. So where is the money going to come from to pay all of these retirees? Simple: you and I.
In 1945, ten years after the start of Social Security, there were 42 workers for each retiree. In 1950, the ratio fell to 17 workers to a retiree. Today, it is only 4 to 1. This means a much greater tax burden on each individual worker to support everyone collecting his or her check from the treasury. 30 years from today, the ratio is projected to be 2 to 1.
Over the next 75 years Social Security and Medicare represent $40 trillion of unfunded liability.
This simply means that the government will have paid out $40 trillion dollars that they do not have.
The average American household has $8400 of credit card debt, which is roughly 1/5, or 2 ½ months of the average household’s yearly income.
With an annual federal budget consisting of $3 trillion dollars, it would take over 13 years of nothing but spending on Social Security and Medicare to balance these entitlement budgets.
I’m not sure what you do, but when my expenditures exceed my income, I must cut my costs.
Shouldn’t that be happening in Washington? Shouldn’t Obama and his buddies in Congress be cutting the federal budget? If you’ve watched their moves since the election you’ve noticed that the only words they can spit out are spend, spend, spend.
All of this proves that no matter how pure, how just, or how wholesome one’s intentions may be, when the government gets additional, uncalled-for powers the end result is always tyranny.
Father of the Constitution, James Madison said in Federalist Paper #45, The powers delegated by the proposed Constitution to the federal government are few and defined . . . [to] be exercised principally on external objects, as war, peace, negotiation, and foreign commerce.
Maybe we should start reciting this instead of the Pledge of Allegiance, than maybe we can pound it into the heads of our elected officials that we need smaller, smarter government instead of entitlement programs and stimulus packages that don’t work.
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