Last Sunday, my dad, James, and I had a post-dinner discussion about Social Security Service (SSS) and I said it’s a scam or SSScam as I like to call it.
Based on a definition of a Ponzi Scheme: A Ponzi, or pyramid, scheme is a scam SSScam in which people are persuaded forced to invest through promises of unusually high returns by law, with early investors paid their returns out of money put in by later investors.
The SSS is a government owned and operated corporation (GOCC) which is mandated by law to collect monthly contributions from you at say age 20 when you start working, invest all your contributions, collect investment income, pay fat Wall Street style bonuses to their executives for “taking risks”, and giving the rest as dividends to the government. These dividends go into the national budget, runs through the gamut of corruption, and finally trickles back to you in the form of hopefully beneficial government programs and projects.
This goes on until till you’re 65 at which point, they give you a percentage of your average monthly contribution as monthly pension till your death at about 72 (average life expectancy as of 2011). There’s also a death benefit but you couldn’t really care too much about it at that point. And guess where that money for your monthly pension comes from?
If that’s not a scam, I don’t know what is.