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I don't think anything you said explains why it would be a Ponzi scheme. Ponzi scheme isn't a scheme because you pay old people with new people's money, but be
by glogla 4y ago
I don't think anything you said explains why it would be a Ponzi scheme.
Ponzi scheme isn't a scheme because you pay old people with new people's money, but because there is promise of exponential growth that is unsustainable and often literally impossible.
For this to be true of pensions, they would have to (inflation adjusted) grow, which they don't. Yes, if there's less productive people and more non-productive people, that changes the balance but it is a balance, not unlimited growth of a Ponzi scheme.
- tristor 4y ago"A Ponzi scheme (/ˈpɒnzi/, Italian: [ˈpontsi]) is a form of fraud that lures investors and pays profits to earlier investors with funds from more recent investors." [1] The only thing there that is arguably untrue about social security / public pensions is "investors". Depending on whether or not you consider contributions to social security / public pensions as an investment or not, it falls on one side or the other of the literal line of what a Ponzi scheme is. Even if you don't consider it an investment, in /every other aspect/ it is effectively the same as a Ponzi scheme. That is not to say that public pensions are a bad thing. I'm merely pointing out that they carry a demographic risk that is unaccounted for, just as a Ponzi scheme carries significant investment risks that are unaccounted for due to faked returns. There is no requirement that you promise exponential growth that is literally impossible for something to be a Ponzi scheme. The key element is that you use money from new participants to pay out "returns" to older participants, thus fraudulently claiming/faking said returns. That is it. [1]: https://en.wikipedia.org/wiki/Ponzi_scheme https://en.wikipedia.org/wiki/Ponzi_scheme