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What is your definition of a ponzi scheme? It is literally, definitionally one. The only difference from other ponzi schemes where newe entrants pay out unsusta

by sershe 2y ago

What is your definition of a ponzi scheme? It is literally, definitionally one. The only difference from other ponzi schemes where newe entrants pay out unsustainable amounts to old entrants is that new entrants are forced in.

ModernMech 2y ago
It's not literally, definitionally one because a ponzi scheme is first and foremost a scheme -- fraud. Social security is literally, definitionally not a scheme; it's legal, audited, and fully transparent. > new entrants are forced in. Yes and that makes it materially different from a ponzi scheme.
- sershe 2y ago
  The scheme can just mean "plan". For the first "difference", ~nobody studies the terms of how social security operates before starting to pay into it. Would you say that if I run a ponzi scheme but put a bit of fine print somewhere the investor will not read when joining, admitting it is in fact a ponzi scheme, it is suddenly not a ponzi scheme? I can even make it audited to warn the investors when it runs out of money decades later, no recourse though! Still a ponzi scheme. For the 2nd one, indeed, that is a material difference. Of course, that makes it worse than just a regular ponzi scheme! In the above example, if I somehow read the disclaimer and refuse to participate, the ponzi scheme operator now points a gun at me and forces me! And of course, this "material difference" only makes a real difference as long as demographics are favorable. So yeah, it's a thinly-disguised ponzi, combined with forced labor.
  - dns_snek 2y ago
    Why stop at social security? All societal benefits derived from taxation can be said to be a ponzi scheme if you're determined enough.
    - piva00 2y ago
      I feel that lots of people do actually think that way, either by ideological conviction or ignorance.
    - sershe 2y ago
      Not really. Social security (and medicare) specifically makes promises of future returns to current payers, based on the assumption new entrants will provide the money to pay for those returns. To underscore the point, they are even structured separately. Normal social services (from schools to even medicaid) merely transfer money between individuals in the present.
  - ModernMech 2y ago
    > if I run a ponzi scheme but put a bit of fine print somewhere the investor will not read when joining, admitting it is in fact a ponzi scheme No, in the case of "ponzi scheme", it cannot just mean "plan". Yes that is a dictionary meaning of "scheme" but that's not the one referred to in the phrase. Putting a bit of fine print somewhere in hopes people will miss it is not being transparent, it's also deceptive and manipulative. "Scheme - make plans, especially in a devious way or with intent to do something illegal or wrong." A key aspect of the Ponzi scheme is that the person running it does not actually have a legitimate investment opportunity. Lying profusely to everyone involved about the potential outcome is what makes it work. The only outcome is that they will lose their money. This is not true with SSA, as people have been getting social security payments regularly for 90 years. No one is deceived about what SSA is. Can you point to any literal ponzi scheme that is as transparent as SSA, and has consistently paid back investors for 90 years? > ~nobody studies the terms of how social security operates before starting to pay into it. Yes, but upon learning the truth, most people understand its purpose, how it works, and agree with it. And crucially, if they didn't, they could change the law. > indeed, that is a material difference. Of course, that makes it worse than just a regular ponzi scheme! Why? Ponzi schemes collapse because they run out of new entrants to the scheme. If it's a societal-wide forced Ponzi scheme they're not going to run out of new entrants, and the pool of participants is larger than just suckers who are fooled by ponzi schemes. You simply assert, without proof, this is worse. But to me this sounds like so many systems we have like insurance, and capitalism as a whole. Forcing everyone to participate means everyone has incentive for it to not fall over. -- Let's cut to the chase here. There are more difference between SSA and Ponzi schemes than similarities: - Ponzi schemes are lies; SSA is transparent - Ponzi schemes are difficult to maintain for long; SSA has been going 90 years - Ponzi schemes rely on fooling a small group of gullible people; SSA relies on everyone participating - Ponzi scheme is illegal; SSA is the law - Ponzi schemes are the brainchild of conmen; SSA is the brainchild of elected representatives and administered by career civil servants - Ponzi schemes fail when the law catches up and it's dismantled or runs out new people; SSA has yet to fail and predictions that it will fail in the same way Ponzi schemes fail have yet to be proven. At some point, these difference have to matter, and they certainly mean SSA is not "literally, definitionally a Ponzi scheme"
    - 2y ago

by sershe 2y ago

ModernMech 2y ago

It's not literally, definitionally one because a ponzi scheme is first and foremost a scheme -- fraud. Social security is literally, definitionally not a scheme; it's legal, audited, and fully transparent. > new entrants are forced in. Yes and that makes it materially different from a ponzi scheme.

sershe 2y ago
The scheme can just mean "plan". For the first "difference", ~nobody studies the terms of how social security operates before starting to pay into it. Would you say that if I run a ponzi scheme but put a bit of fine print somewhere the investor will not read when joining, admitting it is in fact a ponzi scheme, it is suddenly not a ponzi scheme? I can even make it audited to warn the investors when it runs out of money decades later, no recourse though! Still a ponzi scheme. For the 2nd one, indeed, that is a material difference. Of course, that makes it worse than just a regular ponzi scheme! In the above example, if I somehow read the disclaimer and refuse to participate, the ponzi scheme operator now points a gun at me and forces me! And of course, this "material difference" only makes a real difference as long as demographics are favorable. So yeah, it's a thinly-disguised ponzi, combined with forced labor.
- dns_snek 2y ago
  Why stop at social security? All societal benefits derived from taxation can be said to be a ponzi scheme if you're determined enough.
  - piva00 2y ago
    I feel that lots of people do actually think that way, either by ideological conviction or ignorance.
  - sershe 2y ago
    Not really. Social security (and medicare) specifically makes promises of future returns to current payers, based on the assumption new entrants will provide the money to pay for those returns. To underscore the point, they are even structured separately. Normal social services (from schools to even medicaid) merely transfer money between individuals in the present.
- ModernMech 2y ago
  > if I run a ponzi scheme but put a bit of fine print somewhere the investor will not read when joining, admitting it is in fact a ponzi scheme No, in the case of "ponzi scheme", it cannot just mean "plan". Yes that is a dictionary meaning of "scheme" but that's not the one referred to in the phrase. Putting a bit of fine print somewhere in hopes people will miss it is not being transparent, it's also deceptive and manipulative. "Scheme - make plans, especially in a devious way or with intent to do something illegal or wrong." A key aspect of the Ponzi scheme is that the person running it does not actually have a legitimate investment opportunity. Lying profusely to everyone involved about the potential outcome is what makes it work. The only outcome is that they will lose their money. This is not true with SSA, as people have been getting social security payments regularly for 90 years. No one is deceived about what SSA is. Can you point to any literal ponzi scheme that is as transparent as SSA, and has consistently paid back investors for 90 years? > ~nobody studies the terms of how social security operates before starting to pay into it. Yes, but upon learning the truth, most people understand its purpose, how it works, and agree with it. And crucially, if they didn't, they could change the law. > indeed, that is a material difference. Of course, that makes it worse than just a regular ponzi scheme! Why? Ponzi schemes collapse because they run out of new entrants to the scheme. If it's a societal-wide forced Ponzi scheme they're not going to run out of new entrants, and the pool of participants is larger than just suckers who are fooled by ponzi schemes. You simply assert, without proof, this is worse. But to me this sounds like so many systems we have like insurance, and capitalism as a whole. Forcing everyone to participate means everyone has incentive for it to not fall over. -- Let's cut to the chase here. There are more difference between SSA and Ponzi schemes than similarities: - Ponzi schemes are lies; SSA is transparent - Ponzi schemes are difficult to maintain for long; SSA has been going 90 years - Ponzi schemes rely on fooling a small group of gullible people; SSA relies on everyone participating - Ponzi scheme is illegal; SSA is the law - Ponzi schemes are the brainchild of conmen; SSA is the brainchild of elected representatives and administered by career civil servants - Ponzi schemes fail when the law catches up and it's dismantled or runs out new people; SSA has yet to fail and predictions that it will fail in the same way Ponzi schemes fail have yet to be proven. At some point, these difference have to matter, and they certainly mean SSA is not "literally, definitionally a Ponzi scheme"
  - 2y ago