alternatively I'd add that some investors wait only seconds to recoup their investments

10/13/2011 10:03:41 PM

Sure it is. It's funny. It's funny because it's ah, bigger than, ah... you know, a normal hat.

10/13/2011 10:12:04 PM

I'd add HFT is a healthy liquidity providing market activity to the list of lies. Anyone notice any volatility in the marketplace recently? Add leveraged ETFs to the equation and prob 90% of market volume is computers scaming quotes looking for orders to frontrun or ETFs rebalancing. Comforting to know one in ten trades express opinion on the price of the security. The SEC Seems only too happy to continue to allow this parasitic trading to continue. Thank god for regulators, it is gonna take more than the flash crash to stop this scam. Oh goodie.

10/13/2011 11:33:24 PM

10/13/2011 11:49:56 PM

I think that depends on what you're defining as "high frequency trading." If you're talking about computers making trade orders a bazillion times per second, at margins of few hundredths of a cent or whatever, then yeah...I would agree with you. That becomes a contest of who has the best computers and algorithms, and as best as I can tell, is only detrimental and has no value anywhere outside the field of computer science.

10/13/2011 11:56:14 PM

^, ^^^completely agree about lessening the role of HFT. I'd add that the SEC has contemplated how to address HFT (especially in cases of clear frontrunning), but as you probably know, its incredibly complicated. In a market that is determined by less than a second you would need extremely accurate timestamps on what trades happened when and regulators don't always get information that is accurate enough (down to the millisecond?) to carry out any sort of action. Among other reasons that I'm not sure I fully understand.

Add to to that the SEC's budget just got slashed (and their responsibilities grew due to Dodd-Frank) and its just a huge uphill battle.

[Edited on October 14, 2011 at 12:03 AM. Reason : this is in a nutshell why I will be attending occupy Raleigh this weekend]

[Edited on October 14, 2011 at 12:04 AM. Reason : ,]

10/14/2011 12:02:41 AM

Quote :

"While we're at let's kill Medicare, Medicaid, disability insurance, unemployment benefits, and welfare and give all that extra money to Wall Street so they can turn into more money"

Funny story. In Congress, a Congress with both houses under democratic control, a majority of the republicans voted against the bailouts, while a super-majority of democrats voted in favor.

Quote :

"killing social security won't create jobs, won't fix our debt problem, won't fix our education system, won't fix our health care system, wont fix our roads and bridges, won't fix our banking system, won't fix Washington DC, won't fix our standing in the world, won't fix the environment, won't fix our energy problem,"

But it sure would free up a lot of money which could be used to fix such things. Besides, why are you fighting so hard for Warren Buffett's SS check? He certainly doesn't need, neither does a majority of America's retirees. Would it really be the end of the world if the government stopped writing so many checks on Warren Buffett's behalf for SS and medicare? Just means-testing these programs would quickly restore fiscal sanity.

As for HFT, why does this require federal regulation? If HFT is a problem the let the exchanges ban the practice. It is their exchange, they can decide how they are used, and if their customers get fed up with HFT then they will put a stop to it. As trading customers seem to be flocking to exchanges which allow HFT, causing other exchanges to rush to allow the practice, clearly your analysis is incomplete.

10/14/2011 2:21:58 AM

The majority of retires are counting on social security. No, Warren Buffet won't ever need it, but he's not the intended recipient. Retires don't get corporately sponsored pensions anymore unless they're lucky enough to have a strong union, and 401k style plans showed how vulnerable they are in the last few years.

Social Security Steve's a very important purpose socially I reducing poverty among the elderly. It serves a purpose economically by putting money in the hands of those less likely to hoard it and more likely to spend (which does far more for the economy than letting it sit in a bank that won't make loans anymore).

10/14/2011 7:30:00 AM

Great, so take it away from him. Warren Buffet doesn't need it, and the state is writing him checks for $30k a year. Lots of people do have pensions, often pensions paid by government, why should the state also provide them with SS checks? SS will still count as welfare for the elderly if it is means-tested.

As for putting money in the hands of those less likely to hoard it? Warren Buffet gets $30k a year. This argument never makes sense. I know both Republicans and Democrats make it, but spending is not wealth. Keynes is clearly wrong, no amount of directed government spending will end a recession, all it can do is prolong it by worsening balance sheets.

10/14/2011 10:00:29 AM

Quote :

"If HFT is a problem the let the exchanges ban the practice"

I know some exchanges monitor it sorta closely and others just let it ride but I think its complicated for them, almost a conflict of interest. They get direct revenue from HF traders that pay for naked access. They get larger trading volumes which makes them more attractive to all types of investors. They may get higher liquidity and more efficient trading (thats what they tell us anyway). If HFT is only fraud in some cases, and in those cases its really hard to prove, and peons are the ones getting screwed in most of those cases, then its probably a risk they are willing to take. I really don't think that an exchange would care that much if it lost some normal "slow" traders due to the practice, and most of the big funds/banks/whatever already participate in HFT. So there is some risk for the exchange but its pretty small compared to the rewards -- that being said we have already seen that the financial sector is more than happy to create intruments that eventually blow up in their faces so long as they are making money in the short term.

10/14/2011 11:20:55 AM

Quote :

"that being said we have already seen that the financial sector is more than happy to create intruments that eventually blow up in their faces so long as they are making money in the short term."

Have not. They were bailed out, so nothing blew up in their face, it blew up in the tax-payer's. And they knew they would be bailed out. As such, they were quite clever. So, unless the tax-payer is going to take it upon themselves to assume HFT risk, leave it up to the people that actually care.

Quote :

"I know some exchanges monitor it sorta closely and others just let it ride but I think its complicated for them, almost a conflict of interest."

That is not a conflict of interest. If HFT annoys some traders then they will take their trading fees and do their trading on a HFT-banned exchange elsewhere. Banning HFT annoys other traders that will then take their trading fees to some other exchange that allows the practice. This is not a tragedy of the commons, as there is no commons. At best, this is a conflict between customer demands, which just like smoking in bars is best served not by banning smoking, but by allowing bars to differentiate so some are smoke free and some encourage smoking. As I don't personally know of any remaining exchanges outside of Zimbabwe or Chad that don't allow HFT, it seems clear the non-HFT traders just didn't care. As such, why the hell do you?

And if I'm right and the traders interested in HFT care a lot while non-HFT traders care very little, then banning the practice will only crush the American exchange industry even more, as all the HFT traders run off to London and Hong Kong and no anti-HFT come to America to take their place. More jobs lost, more wealth destroyed, and all for what? You didn't increase stability, as all US investments are now on foreign exchanges where HFT is just as legal as it used to be here.

[Edited on October 14, 2011 at 11:35 AM. Reason : .,.]

10/14/2011 11:31:36 AM

Quote :

"This is without a doubt the dumbest most brain dead thing that has ever been posted on the internet about Social Security. Of course it will have some effect on the economy, are you really that fucking retarded to think otherwise?"

SS deduction: $ 42.60. Soooooooooooooooo much more money, I mean holy shit, with those extra tens of dollars, I can totally take a few more trips to Starbucks a week. Totally worth destroying the most successful and useful social program in our countries history. Medicare is a much larger deduction though, I could actually afford an extra steak dinner with a bottle of red wine every month if we got rid of that. Let's do it!

Quote :

" The politicians that you suck off in these threads voted to give those same wall street institutions that you vilify a free pass after they fucked us over. "

You must be confusing me with someone else, I haven't sucked off anyone. I've been pretty sharp in my criticism of how Obama/Democrat's failed to deliver on stimulus, taxes, and Wall Street reform.

Quote :

"Funny story. In Congress, a Congress with both houses under democratic control, a majority of the republicans voted against the bailouts, while a super-majority of democrats voted in favor. "

I'm not rehashing my argument for the bailouts here, I created a thread for that. But that's because democrats can A. Do math and B. recognized the gravity of the situation we were in, while republicans are perpetually stuck on abortion, guns, and god.

As to HFT, you people would be fucking shocked how much larger the salaries offered by financial services vs. health care research are, for basically the exact same software development qualifications. I decided I'd rather work on something that will actually benefit humanity and sleep better at night, rather than work on HFT and make a few extra bucks.

10/14/2011 12:10:15 PM

Quote :

"I decided I'd rather work on something that will actually benefit humanity and sleep better at night, rather than work on HFT and make a few extra bucks."

All jobs have costs and benefits. An economist would call the satisfaction you get from performing your job just another form of untaxed compensation.

Quote :

"But that's because democrats can A. Do math and B. recognized the gravity of the situation we were in, while republicans are perpetually stuck on abortion, guns, and god."

So, just to clarify, you were and are 100% in favor of bailing out large banks that have screwed over both their owners and their customers? So you weren't joking when you called for government to gut social programs and give the money to wallstreet.

Well, you're an idiot. Some of these programs do some good. The bailouts did not.

10/14/2011 12:20:21 PM

Quote :

"Have not. They were bailed out, so nothing blew up in their face, it blew up in the tax-payer's. And they knew they would be bailed out. As such, they were quite clever. So, unless the tax-payer is going to take it upon themselves to assume HFT risk, leave it up to the people that actually care. "

First of all don't act like they knew they would be bailed out, you are giving them entirely too much credit. Second we are post-bailout, we have that moral hazard now, you can expect them to come back for more when shit blows up again.

Quote :

"At best, this is a conflict between customer demands,"

what about the cases of frontrunning? Its unfortunate that regulators can't catch rigged trades because of the total volume and the technical difficulties of having accurate enough information to prosecute.

Quote :

"non-HFT traders just didn't care. As such, why the hell do you? "

There are a lot that do care, but if you aren't atleast dabbling in the HFT game then you aren't swinging a big enough bat for an exchange to give a damn about you. They probably also don't care if I get shitted on by a rigged trade because I don't even register on the financial radar.

Quote :

"And if I'm right and the traders interested in HFT care a lot while non-HFT traders care very little, then banning the practice will only crush the American exchange industry even more, as all the HFT traders run off to London and Hong Kong and no anti-HFT come to America to take their place. More jobs lost, more wealth destroyed, and all for what? You didn't increase stability, as all US investments are now on foreign exchanges where HFT is just as legal as it used to be here."

There isn't much HFT that occurs in Hong Kong currently, partly because they havea decent sized financial transaction tax. Europe is currently debating a financial transaction tax that is actually targeted toward HFT. London has one of the longest running transaction taxes, but derivatives and other wonky instruments are exempt so they are what gets a majority of their HFT. It remains to be seen what will happen if Europe goes ahead with a tax, but people certainly aren't fleeing from the Hong Kong exchange.

I've never said that we should absolutely ban HFT, only that we should curtail it as well as get a hold of the fraud. You can do that by empowering the SEC and having a financial transaction tax. I believe that in America all finance exchanges are already taxed by the SEC (?) but that tax is adjusted depending on what the SEC's budget is. So all congress would have to do is increase the SEC's budget and probably kill two birds with one stone.



[Edited on October 14, 2011 at 1:20 PM. Reason : a little unclear]

10/14/2011 1:13:37 PM

Quote :

"Well, you're an idiot. Some of these programs do some good. The bailouts did not."

Nuh uh, you're an idiot!!!!

(hint: calling someone idiot because you either don't understand or would rather not participate in an honest debate of their viewpoints isn't a very effective argumentative strategy.)

(as a side note, i just realized i got my SS and Medicare deductions backwards on my paycheck, woopsie!!! doesn't change my point though)

[Edited on October 14, 2011 at 1:55 PM. Reason : :]

10/14/2011 1:31:47 PM

Quote :

"SS deduction: $ 42.60. Soooooooooooooooo much more money"

You apparently can't do simple math and have a hard time comprehending large numbers. Try harder.

Quote :

"So you weren't joking when you called for government to gut social programs and give the money to wallstreet. "

This is such a clever owning you've done of Shrike I wanted to quote it.

Quote :

"(hint: calling someone idiot because you either don't understand or would rather not participate in an honest debate of their viewpoints isn't a very effective argumentative strategy.)"

He is destroying you kid. Just fucking demolishing you and he hasn't even tried yet. Look, if you're trolling, congrats in getting a response. I can't fathom any other scenario where you are in fact a sentient human being and making these posts genuinely.

10/14/2011 5:33:03 PM

k

[Edited on October 14, 2011 at 5:36 PM. Reason : a]

10/14/2011 5:36:22 PM

Quote :

"Nuh uh, you're an idiot!!!!"

I was going for irony. I refuse to believe you believe said programs do no good while the bailouts did, as such calling someone that does believe such a thing an idiot would not apply to you.

And yet, here we are...do you believe it or what? Do you value the wall-street bailout more than the previously named government programs? If so, I'm sorry for calling you a name. Doesn't change how wrong you are.

10/14/2011 5:49:43 PM

^^^No, he's just being intellectually disingenuous, and so are you. Projecting your own fantasy's on someone else doesn't mean you "owned" them, it just makes you a delusional asshole. As I said, I already made my case for the bailouts in another thread,

message_topic.aspx?topic=619020

In short, we gave money to Wall Street to save the global economy from a crisis, with the stipulation that we would get it all back. The crisis was averted, and we got all our money back, with interest. And you say I can't do math. You know what's trolling? Pretending that's even remotely comparable to ending all entitlement programs and handing the extra money to Wall Street to do with as they please. You are quite literally the single most useless poster on this entire forum, contribute something or please just get the fuck out.

Quote :

" I refuse to believe you believe said programs do no good while the bailouts did, as such calling someone that does believe such a thing an idiot would not apply to you. "

I really would love for you say where I said this. I was mocking the Republican position that entitlement slashing was somehow the end all solution to all our problems. Really not that hard to understand.

[Edited on October 14, 2011 at 5:58 PM. Reason : :]

10/14/2011 5:54:14 PM

Quote :

"The crisis was averted, and we got all our money back, with interest"

Which is a huge lie.

TARP lost $50 billion over-all (the government had to borrow the money it lent out, so while it got back every penny it had to pay interest to treasury bond holders) and cost healthy banks an incalculable amount of cash.

As I said, Fannie and Freddie have already cost upwards of $259 billion and there is no telling when the losses will end.

According to wikipedia AIG so far cost taxpayers upwards of $112 billion.

The federal auto bailout is estimated to have cost $14 billion, not including interest.

So, please enlighten us again how all the bailouts have paid for themselves? All those bankers and bond holders got their money back when they otherwise would not have. That money had to come from somewhere.

Quote :

"I was mocking the Republican position that entitlement slashing was somehow the end all solution to all our problems."

Well, it sure would end many of our problems. Something tax increases could never do.

[Edited on October 14, 2011 at 6:09 PM. Reason : .,.]

10/14/2011 6:08:23 PM

Quote :

"The crisis was averted"

This slavish devotion to taking what self labeled authorities say is why you liberals scare the shit out of me. What does crisis even mean? That companies wouldn't be able to make payroll? Horseshit. Ok, I'll even allow that could have been a possibility. You've heard of the lender of last resort right? There was nothing preventing politicians from establishing any sort of emergency measures that would allow those needing short term liquidity from going direct to the Fed, bypassing companies that could be liquidated by the already existing FDIC process just like the hundreds of other medium sized banks (who aren't politically connected) have since the "crisis".

Quote :

" Pretending that's even remotely comparable to ending all entitlement programs and handing the extra money to Wall Street to do with as they please"

God damnit Shirike, get a fucking hold of yourself. If the SS deduction disappears from my paycheck...THAT EXTRA MONEY GOES TO ME. Do you understand that?

10/14/2011 6:18:12 PM

Quote :

"So, please enlighten us again how all the bailouts have paid for themselves? All those bankers and bond holders got their money back when they otherwise would not have. That money had to come from somewhere."

I did, in that other thread, I'm not rehashing it here. I'm sorry you can't read. I posted several points of data, cited directly from the treasury, refuting literally every single one of your bullet points. Please provide adequate citation, like I did in that thread, or just fucking drop it.

Quote :

"What does crisis even mean?"

Cascading defaults. Does that help?

Quote :

"If the SS deduction disappears from my paycheck...THAT EXTRA MONEY GOES TO ME. Do you understand that?"

Wonderful. If the federal tax deduction disappears, that money goes to you too. Same with the state tax deduction. It's all just government waste. Let's get rid of it all!!!!!

[Edited on October 14, 2011 at 6:24 PM. Reason : :]

10/14/2011 6:18:47 PM

Sigh. You do realize that SS as a retirement vehicle is only slightly better than taking that same amount of money and burying it in the back yard, right? Your expected rate of return on it runs from about .75% to 4% depending on filing status, income, etc.

As a retirement vehicle it's shit. Someone please explain to me how it's a good program? Honestly, the only thing I can think of is that because it's mandatory everyone will have some kind of retirement income... even though relying on just SS if you make the average median income is just a terrible idea.

Please explain to me why it is a system that needs to continue.

10/14/2011 7:08:51 PM

Quote :

"Cascading defaults. Does that help?"

I don't think you understand.

Implicit in your statements are that when they happen it is inherently bad for society and these things must be prevented and that the bailouts were the proper thing to happen.

Regardless, of whether the bailouts made or lost money, bypassing not only the free market, but the FDIC process that already existed, not forcing people that made bad investments to eat their loss...AND doing this with taxpayer monies is simply morally wrong on many many levels.

Quote :

"Wonderful. If the federal tax deduction disappears, that money goes to you too. Same with the state tax deduction. It's all just government waste. Let's get rid of it all!!!!! "

This isn't even a very good straw man.

Quote :

"Please explain to me why it is a system that needs to continue."

Well, duh, because like, conservatives won't it gone, so as a liberal that means it must be a good thing, and like, think of the people that won't have shit and stuff. They'll like...they'll die. So umm, ffffffffff, heeeerrrppp. We gotta keep it.

[Edited on October 14, 2011 at 7:13 PM. Reason : .]

10/14/2011 7:09:34 PM

Quote :

"Someone please explain to me how it's a good program?"

Well, the easiest way is to determine if it's accomplished it's goal, which is the reduction of poverty among the elderly.

Fortunately, smarter (or more interested) people than us have already determine the causal relationship between Social Security and poverty levels among the elderly.

http://urbanpolicy.berkeley.edu/pdf/Ch6SocialEG0404.pdf

Feel free to skip to the end. The answer is yes, Social Security has dramatically reduced poverty among the elderly and screwing with it would have major consequences.

[Edited on October 14, 2011 at 9:24 PM. Reason : Sounded unintentionally insulting]

10/14/2011 9:23:24 PM

Wait...so you mean confiscating wealth and giving it to someone else will raise their standard of living?

How much was paid for that study?

10/14/2011 9:52:50 PM

And here's the problem. It doesn't matter how many people a program helps. It doesn't matter how much better the country is with the program tha without. It doesn't matter that economically bolstering the lower and middle classes is much better for the economy than allowing wealth hoarding in the top few percent.

All that matters is that it takes a few bucks a month out of your pocket, and that is obviously unacceptable under and circumstances.

10/14/2011 9:58:42 PM

Quote :

"It doesn't matter how many people a program helps."

Ignore that the program actually hurts people in measurable and likely immeasurable ways.

Quote :

"It doesn't matter how much better the country is with the program tha without. "

also immeasurable...

Quote :

"It doesn't matter that economically bolstering the lower and middle classes is much better for the economy than allowing wealth hoarding in the top few percent"

platitude

For every study that comes to one conclusion in matters of macro policy you can find another that comes to an opposite conclusion. Why? Because it's impossible in a system as large and chaotic as our economy to determine exact causal relationships. A model is needed and models are shown over and over and over again to be devorced from reality.

Quote :

"All that matters is that it takes a few bucks a month out of your pocket, and that is obviously unacceptable under and circumstances."

I apologize if I rather have the freedom to be broke and wanting of relatives and charity to fix my irresponsibility in my old age than to force you via legislation to do it.

10/14/2011 10:19:09 PM

Fortunately, it's not about you. It's about the country as a whole.

You may choose to ignore the difference in the states of the elderly in this country before and after social security, but please don't think that simply waving your hand at it is some kind of adequate response. The numbers are there in plain black and white for anyone go wants to see them.

10/14/2011 10:26:38 PM

Quote :

"You may choose to ignore the difference in the states of the elderly in this country before and after social security"

No, you didn't comprehend what you read. I fully believe the elderly and all other age groups are better off in 2011 than they were 30,50,100 years ago. I don't believe you can meaningfully attribute any specific policy to any given level of "better". You know what chaos is don't you?

Quote :

"The numbers are there in plain black and white for anyone go wants to see them"

I can't stomach the outright liberal bent to this shit:

Quote :

"This raises the important question of whether the elderly should or should not share in the increases in the standard of living realized by the non-elderly. Income inequality has also exploded among the elderly in the 1990s. "

10/14/2011 10:53:50 PM

If you don't save while you're working, I don't really care if you retire in poverty. Not my fucking problem.

10/14/2011 11:48:22 PM

^One of the biggest problems is that people are not making enough wages to live off of, much less even think about saving.

When republicans continue to "create jobs" they are really creating low wage jobs that inhibit saving. GE lead by Obama's job czar is moving decent paying jobs over seas and creating 13/hr jobs in the US. The same can be said about most of the new jobs in the US.

Wages have been on the steady decline while corporate profits have soared.

10/15/2011 12:47:41 AM

They can afford to have it taken out of their pay as FICA tax, can't they?

10/15/2011 12:51:48 AM

Quote :

"Ah, another reason why it doesn't count as a ponzi scheme, there's no way to pull out."

provide us a definition that says that. you STILL don't know what a Ponzi Scheme is, dude.

Quote :

"When I say that it requires lying I'm not just talking out of my ass"

actually, you are, because the definitions say no such thing. What they DO say is this: "returns" are paid directly and solely from "investments." That's it. Find me a definition that says otherwise and doesn't rely on the semantics of the word "Scheme".

Quote :

"Then every insurance policy share the same mechanics of a ponzi scheme...as do stocks and bonds."

not at all. Stocks and bonds have the returns paid from profits, not from the actual investments themselves. Insurance policies aren't marketed as investments, so they can't be a Ponzi Scheme. I know you are a fucking retard, but don't make it so god damned easy.

Quote :

"But hey,why don't you go ask the people who run the program?"

Really? really... Really? I imagine all we needed to do with Bernie Madoff was just ask him if he was running a Ponzi Scheme, right?

Quote :

"won't do a goddamn thing except fuck over millions of people"

creating a system that made millions of people dependent upon the government is what fucked over those millions of people. not saying that we need to end it because it's going to fuck over far more.

Quote :

"and sort of like but not really at all a Ponzi scheme"

really? returns paid from investments. that's a god damned Ponzi Scheme.

Quote :

"However, I recall the argument settling on Social Security meeting some qualifications for a Ponzi scheme, but lacking in other qualifications."

then you recall wrong. it meets the very fucking definition of the term, dude.

Quote :

"I still argue that the program is one of the most successful and solvent that we've had"

i wanna get some of the shit that you are smoking.

Quote :

"The crisis was averted, and we got all our money back, with interest"

except for the money that we didn't get back, and the money that we put in another category because we know we are gonna lose our asses on it. got it. you got owned in that thread, and then tried to come in here and quote it as some authoritative source. you are a sad, sad, little man.

Quote :

"I did, in that other thread, I'm not rehashing it here. "

translation: I got fucking OWNED in the other thread, and I don't want to get owned in here, too. hahahaha.

Quote :

"I'm sorry you can't read. I posted several points of data, cited directly from the treasury, refuting literally every single one of your bullet points."

I'm sorry that you won't admit that they are leaving major points of data out in order to paint a much rosier picture than real life shows.

Quote :

"Fortunately, smarter (or more interested) people than us have already determine the causal relationship between Social Security and poverty levels among the elderly."

So let me get this straight: we have a study that looked at a time of high poverty among the elderly DUE TO A GOD DAMNED GLOBAL DEPRESSION and then declared that some gov't program instituted then that did nothing to affect the depression itself was the reason that many elderly people were no longer in poverty after the depression ended? that's the mother of all cherry-picking, if you ask me.

10/17/2011 11:02:20 PM

Social Security doesn't meet the qualification of a Ponzi scheme's quick returns luring investors into bigger risks or the illusion of profitability.

Again, it meets part of the definition but not the entire definition.

10/17/2011 11:12:34 PM

no definition of a Ponzi Scheme requires quick returns. you failed on that then, you are failing on it now. You are getting confused with how it "usually works" with how it is actually defined. The length of time between investment and "returns" only changes the coefficients in the mathematical models. It does NOT change whether or not it is a Ponzi Scheme

10/17/2011 11:20:01 PM

A Ponzi scheme is a fraudulent investment operation that pays returns to its investors from their own money or the money paid by subsequent investors, rather than from any actual profit earned by the individual or organization running the operation. The Ponzi scheme usually entices new investors by offering higher returns than other investments, in the form of short-term returns that are either abnormally high or unusually consistent. Perpetuation of the high returns requires an ever-increasing flow of money from new investors to keep the scheme going.

The system is destined to collapse because the earnings, if any, are less than the payments to investors. Usually, the scheme is interrupted by legal authorities before it collapses because a Ponzi scheme is suspected or because the promoter is selling unregistered securities. As more investors become involved, the likelihood of the scheme coming to the attention of authorities increases.

The scheme is named after Charles Ponzi,[1] who became notorious for using the technique in 1920.[2] Ponzi did not invent the scheme (for example, Charles Dickens's 1844 novel The Life and Adventures of Martin Chuzzlewit described such a scheme),[3] but his operation took in so much money that it was the first to become known throughout the United States. Ponzi's original scheme was based on the arbitrage of international reply coupons for postage stamps; however, he soon diverted investors' money to make payments to earlier investors and himself.

10/18/2011 12:10:21 AM

You can argue all you want about whether or not SS meets the definition of a Ponzi Scheme in its truest sense all you want.

The fact of the matter is SS has an increasing amount of people drawing down benefits which are paid by a shrinking number of workers. You can move the goalposts all you want to delay the endgame but ultimately the scheme DOES NOT WORK.

10/18/2011 7:58:30 AM

"Does not work" is a pretty odd thing to say about something that has succeeded fantastically for 70+ years and is in no real danger of failing (assuming that Congress doesn't continue to act like idiots).

Of course I understand that it's important to frame it as a failure and if you don't the arguments against it lose their teeth. So by all means, please keep doing so if it makes you feel better.

10/18/2011 8:12:23 AM

^ Just because something lasts for a long time doesn't mean it can't fail.

When SS started, the ratio of workers to retirees was 16:1. And the retirees didn't live that long after retiring. Now the ratio is roughly 3:1 and retirees routinely live 15-20+ years after retiring. Do you not see the problem here?

You can keep it going by moving the goalposts, i.e., changing the retirement age and increasing the amount of money workers kick up to the retirees but eventually you get to a point where it doesn't reasonably work (not enough workers and/or they just can't pay what's being asked of them).

10/18/2011 8:20:35 AM

^^Older generations promised themselves your money. That should never, ever be acceptable under any circumstance. It's kind of funny to you see you defending this system, since you'll be the one getting screwed the hardest.

This practice where we create debt with every intention of passing it off to the next generation is immoral beyond comprehension. I don't understand why we stand back and let it happen.

10/18/2011 11:39:45 AM

Quote :

""Does not work" is a pretty odd thing to say about something that has succeeded fantastically for 70+ years and is in no real danger of failing (assuming that Congress doesn't continue to act like idiots)."

yeah. it's succeeded so well that we've NEVER had to make a single change to it. We've never had to adjust benefit amounts. We've never had to adjust the tax rate for it. We've never even contemplated changing the age when you can acquire benefits. Yep, it's PERFECT!!! Are you that fucking stupid? I mean, Bernie Madoff could have said the exact same shit about his scheme up until the day it collapsed.

10/18/2011 6:57:39 PM