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Just like Bitcoin. :)
by ZitchDog 13y ago
Just like Bitcoin. :)
- BlackDeath3 13y agoJust like fiat.
- judk 13y agoJust like Social Security, really.
- BlackDeath3 13y agoI mean that fiat will continue to work as long as people believe in it. Social security, now that I think about it, does sound much like a Ponzi scheme.
- skj 13y agoPopulations grow exponentially, and the whole population is required to pay into SS.
- paul_f 13y agoExcept they don't. Populations in developing countries have now stabilized and in some cases, Japan, are well below replacement level.
- skj 13y agoPopulation growth is a fundamentally exponential process, even if that exponent is very close to 1 in some cases, or even less than 1.
- 2stop 13y agobut you said exponentially growing... which typically means "doubling". You are now saying the 'exponent' could be < 1... then you aren't 'growing' anymore... so you refuted your own statement.
- gnaritas 13y ago> Population growth is a fundamentally exponential process No it isn't. If everyone has one or less children, the population does not grow exponentially.
- hueving 13y agoskj was trolling by changing the common definition of exponential by saying the exponent could be 1 or less than one.
- lutusp 13y ago> skj was trolling by changing the common definition of exponential by saying the exponent could be 1 or less than one. That's not trolling. It's called "mathematics."
- gnaritas 13y agoWhich is trolling in a discussion that isn't about mathematics.
- lutusp 13y agoWait, what? Replying to a comment that is clearly about mathematics, with a comment that is clearly about mathematics, is trolling? The OP's comment, including " ... changing the common definition of exponential by saying the exponent could be 1 or less than one" is (a) mathematical and (b) wrong and misleading. The "common definition of exponential" accommodates any valid argument to exp(x), and to claim otherwise requires a mathematical correction to avoid misleading people.
- CamperBob2 13y agoThe whole working population.
- CamperBob2 13y agoAnyone who doubts that Social Security is a Ponzi scheme should try starting a similar one themselves, and see how it goes.
- saalweachter 13y agoIt is called an annuity. It is one of the more basic forms of insurance, offered widely since forever by more or less everyone.
- patio11 13y agoThe difference between Social Security and an annuity is that Social Security charges too little and promises payouts of too much. It cannot sustain the payouts which are promised in 2014 from revenues available to it in 2014 or the investment returns reasonably possible as a result of those revenues (and its accumulated capital). It must therefore increase the amount of revenues it receives, by a) increasing the SS tax rate and b) increasing the number of people who pay into SS until c) it inevitably defaults on promises to some portion of beneficiaries, for example by adopting e.g. means testing and retroactively stating that people born after a certain day will get the payout they've been promised their entire lives iff they have less income/wealth than $INSERT_CUTOFF and, if they exceed that, they'll receive $CONSOLATION_PRIZE_FORMULA instead. Did you know that Social Security taxes were once 2.25% of income? Before they were 4.5%? Before they were 6.9%? Before they were 8.1%? Before they were 15.3%? That's where we are in 2014. To be fair, while Social Security is clearly not an annuity, as of 2014 it isn't yet in default of its obligations. There's some dispute about what year that will inevitably happen. It will not be described as a default when it does, but rather tweaking a few formulas to protect America's most vulnerable citizens. Edit: Social Security also has some "constructive default" options which are available outside of the program, because it is coextensive with the taxing power of the federal government. For example, SS benefits were once untaxed but are now taxed. There exist plausible ways by which every dollar promised of SS benefits can be "paid" but in which many get immediately recaptured by the government, which avoids formally adjusting the terms of the promise but which is indistinguishable from default in its impact on e.g. your family's budgeting process in 2070. Another option is inflating away the insolvency. Japan will probably do this. It will pay out every yen of the promised monthly 200,000 yen due to pensioners, but pay it with yen which buy half as many apples as they did back when the pensioners were working.
- deleted 13y ago[deleted]
- gnaritas 13y ago> now that I think about it, does sound much like a Ponzi scheme. Think harder, it's nothing like a Ponzi scheme, it's just like any other insurance; payout is not guaranteed.
- baddox 13y agoExcept that you don't generally get to choose whether to pay into Social Security.
- qdog 13y agoSocial Security isn't a vehicle that attempts to return your principle + interest. Regardless of how many contributors there are, SS benefits would pay out at a % of the target if it could not cover the complete benefit. Ponzi schemes have no such provisions and are not transparent about it. I suppose they are similar in that neither are actual investment vehicles, despite what many contributors tend to think.
- retrogradeorbit 13y agoand central banking.