More Evidence the Government is Running a Giant Ponzi Scheme

Katie Pavlich | November 30, 2012 7:40 AM

The U.S. birth rate just hit a new low which has liberal media outlets like NPR pointing out that Medicare and Social Security are in trouble as a result. Why? Because the program isn't being paid for with money former workers put into the system, that's already been spent by the government, but by young people currently working.

The U.S. birth rate hit an all-time low last year, according to a report from the Pew Research Center — just 63 births per 1000 women of childbearing age.

This is a problem. Not just because there is less chubby-cuteness in the country. But also, as I reported earlier this month, fewer babies now means fewer working-age people a couple decades from now. And that means fewer workers helping to pay for programs like Medicare and Social Security that support the elderly.

This is the government's definition of a Ponzi Scheme:

What is a Ponzi scheme?

A Ponzi scheme is an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors. Ponzi scheme organizers often solicit new investors by promising to invest funds in opportunities claimed to generate high returns with little or no risk. In many Ponzi schemes, the fraudsters focus on attracting new money to make promised payments to earlier-stage investors and to use for personal expenses, instead of engaging in any legitimate investment activity.

Why do Ponzi schemes collapse?

With little or no legitimate earnings, the schemes require a consistent flow of money from new investors to continue. Ponzi schemes tend to collapse when it becomes difficult to recruit new investors or when a large number of investors ask to cash out.

Naturally because new workers (declining in number) are paying for the benefits of retirees, the system is going to collapse. The original intentions of Social Security and Medicare were to take money out of people's paychecks and "save" it for them until retirement. Today that isn't the case and younger generations are shouldering the burden of the government's poor decisions and actions to spend Social Security and Medicare money on other things.