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Finland, a Ponzi scheme come to light


Seems the Welfare state may not have enough Newbies to pay for the Oldies:

http://www.msn.com/en-us/money/markets/finlands-welfare-state-has-a-massive-baby-problem/ar-AAsdE6D?li=BBnbfcN
9/19/2017, 5:52 pm Link to this post PM cooter50 Blog
 
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Re: Finland, a Ponzi scheme come to light


I'm having trouble today. I can't scroll down on the article at all.

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9/19/2017, 6:14 pm Link to this post PM Noserose
 
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Re: Finland, a Ponzi scheme come to light


That's the same problem faced by US Social Security and Medicare.

Speaking from memory, when SS was introduced there was something like 16 active workers per employee. Now the number is about 3 and it's expected to drop to 2 in the relatively near future. That wouldn't be a problem if the system had been properly designed in the first place so that funding was in place for those future benefit programs but that wasn't the case. And, despite the funding shortfalls, all that consecutive governments have ever done is kick the can down the road.

BTW - Medicare is a many times larger problem and is due to hit the wall far sooner.

Last edited by shiftless2, 9/19/2017, 6:19 pm
9/19/2017, 6:15 pm Link to this post PM shiftless2 Blog
 
cooter50 Profile
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Re: Finland, a Ponzi scheme come to light


Cannot 'Blindly Fund' a program designed to survive on employee earnings, much as the Medicare for All program Bernie has no clue how to fund.

It was solvent at one time, had a over abundance of moneys available until Johnson STARTED using those as a loan vault for Democratic reform programs and the Vietnam War, it has expanded from there with little payback from the Fed.

SSI is only in trouble as the Fed withdrew too much to finance BS programs and war efforts never to repay as they "Knew" the system would rebuild itself. Foolish ignorant politicians.
9/20/2017, 12:16 am Link to this post PM cooter50 Blog
 
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Re: Finland, a Ponzi scheme come to light


Finland is not a welfare state, The Heritage Foundation rates it #13 on the economic freedom index, the US is #17. Years ago I read about their social programs a rich person is entitled to the same as a poor person in many instances, take the baby boxes, they are distributed to all new mothers no matter their circumstances at a cost of 140 euros each, that could be a weeks groceries for a poor family.
9/20/2017, 1:22 am Link to this post PM katie5445 Blog
 
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Re: Finland, a Ponzi scheme come to light


quote:

cooter50 wrote:

Cannot 'Blindly Fund' a program designed to survive on employee earnings, much as the Medicare for All program Bernie has no clue how to fund.

It was solvent at one time, had a over abundance of moneys available until Johnson STARTED using those as a loan vault for Democratic reform programs and the Vietnam War, it has expanded from there with little payback from the Fed.

SSI is only in trouble as the Fed withdrew too much to finance BS programs and war efforts never to repay as they "Knew" the system would rebuild itself. Foolish ignorant politicians.



Wrong.

Social Security and Medicare have always been a PAYGO (Pay As You Go) programs. Current benefits are being paid with current contributions. Contrary to popular belief the payroll taxes workers are paying today are being used to pay the benefits of current retirees. The benefits that current workers expect to receive in the future will be paid by the contributions of their children and grandchildren (and perhaps great grandchildren). [As an aside, systems like SS are incredibly long lived - the last known widow of a US Civil War veteran died in 2003 and she was receiving a pension from Veterans Affairs until the day she died. Further there is at least one child of a veteran that is alive today and is still receiving a pension.]

As for the government "taking money" out of the fund, I trust you are aware that the monies in the trust funds are invested in special issue US Treasuries - in effect, loaned to the feds - and those treasuries do pay interest.

But let's look at the magnitude of the funding shortfalls.

The combined funding shortfall for Social Security and Medicare is north of $120 trillion (this article dates to 2009 and the shortfalls have only grown since then)

http://knowledge.wharton.upenn.edu/article/social-security-and-medicare-trying-to-tackle-two-800-pound-gorillas/

Let's put that shortfall in perspective - the total value of all real property in the US is only about $50 trillion. The funding shortfall is over $120 trillion.
9/20/2017, 2:25 am Link to this post PM shiftless2 Blog
 
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Re: Finland, a Ponzi scheme come to light


So then the failure of the US to fulfill its debt load to SSI as to 'Diverting' those funds into the Federal Bonds that Cannot repay them and must be 'Refinanced' to accord ANY amount of moneys back into the once Surplus heavy system is not Borrowing from SSI?

There have been articles where the Trust was found to be a Handy divertible fund for Politicians to drop a hand into as the General Revenue was not effective enough and they 'Borrowed' AGAINST Fed Bonds from the fund and now the fund is failing primarily NOT due to dispersals but due to failed return of investment DUE WHOLLY to Political leadership dipping where they should not have been.

http://www.huffingtonpost.com/sen-don-riegle/post_1901_b_845106.html
9/20/2017, 11:10 am Link to this post PM cooter50 Blog
 
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Re: Finland, a Ponzi scheme come to light


There is so much wrong with that article that it's not even worth rebutting.

I don't know what people think the trust is. The idea that it's some sort of "lockbox" makes sense until you ask yourself what exactly is in that lockbox. It's not "cash" - this is nothing like stashing your savings in your mattress - the monies that are contributed to the trust have to be invested somewhere and, given the long term nature of the obligations in question, the only investments that are secure enough are US treasuries. That's what's in the lockbox - IOU's from the US government.

Of course, the problem with that is that when it comes time to redeem those bonds the government only has one place to obtain the necessary funds. Taxes. In other words, people (and corporations) are taxed in order to obtain the money to contribute to the trust and then they're going to be taxed again when it comes time to remove it.

But, if you read the Wharton article I posted earlier the funding combined funding shortfall for those two programs is in excess of $120 Trillion (that is with a "T").

But neither program has never been properly funded (the first recipient of a Social Security check was a lady named Ida May Fuller - she contributed a grand total of $20 (that's right twenty dollars) and she received approximately $20,000 in benefits). As I said above both Social Security and Medicare are "Paygo's" so current contributions are being used to pay current benefits. If they weren't Paygo's and the programs were properly funded the trust funds would be at least $120 Trillion larger.

And a piece of trivia that most people seem to be completely unaware of: When Roosevelt introduced Social Security he did include a requirement that employees pay part of the cost. That decision had nothing to do with economics. It was purely political and was included for the sole reason of making people feel that "they had earned those benefits" as opposed to them being some sort of gift from the government. That way "nobody would dare mess with Social Security".

While we're at it, you might want to note that both the Social Security and Medicare Trustees have issued warnings about their respective programs.

But, if you want to knowledgeably debate the subject you should look here - depending on your math background it shouldn't take you more than eight to ten years.
9/20/2017, 1:05 pm Link to this post PM shiftless2 Blog
 
John1959 Profile
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Re: Finland, a Ponzi scheme come to light


First of all, it's not a Ponzi scheme and it's simply ridiculous to call it that.


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9/20/2017, 2:41 pm Link to this post PM John1959 Blog
 
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Re: Finland, a Ponzi scheme come to light


quote:

John1959 wrote:

First of all, it's not a Ponzi scheme and it's simply ridiculous to call it that.



US Social Security is a Ponzi scheme - the biggest in the world. The only reason not to call it that is because it's legal and compulsory (whereas a "real" Ponzi scheme is crooked and people voluntarily sign up to get screwed)
9/20/2017, 3:17 pm Link to this post PM shiftless2 Blog
 


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