Commentary Magazine


Contentions

I’m Crazy Ponzi-Man, Now Gimme That Money

In a letter to the New York Times, CPA John Carrick succinctly summarizes a governmental scheme that would send private citizens to jail if they did the same thing:

Social Security is in effect a giant Ponzi scheme. Today’s contributions are used to pay beneficiaries who contributed yesterday, and the surplus of current contributions is “lent” to the federal government and used for general spending.

The Ponzi scheme underlying the Medicare system is even more blatant. Consider the new “Medicare Contribution,” enacted as part of ObamaCare in the name of “fairness,” which extended the 3.8 percent Medicare tax to the investment income of those making more than $200,000 ($250,000 in the case of a couple). The legislation dispensed with the interim step of sending the money to the Medicare Trust Fund, to then be “lent” to the general fund and spent on non-Medicare programs. Instead, the money from the new “contribution” will go straight to the general fund; Medicare will not even get a government IOU to hold in “trust.” Privately run Ponzi schemes are generally less brazen.

Later this month, Democrats will attempt to increase the “fairness” of the most progressive income-tax system in the world (under which about half of American households pay no tax at all and the top 1 percent pay of earners pay about 40 percent of the total) by increasing taxes on the “rich” to help finance the trillion-dollar deficits Obama has made the new norm. The plan is to withdraw hundreds of billions more dollars from the private economy while assuring citizens that the economic consequences will be felt only by the targeted few. The public seems to understand that the economic effect will be somewhat broader.

It is a shame that there isn’t more money in the Social Security and Medicare trust funds to “borrow.” That is such a simpler system — and there is no pesky criminal law to prevent it, since only private Ponzi schemes are banned. But the federal government has exhausted its current Ponzi possibilities and now seems more like Adam Sandler in a tax-fairness costume.



Join the discussion…

Are you a subscriber? Log in to comment »

Not a subscriber? Join the discussion today, subscribe to Commentary »





Welcome to Commentary Magazine.
We hope you enjoy your visit.
As a visitor to our site, you are allowed 8 free articles this month.
This is your first of 8 free articles.

If you are already a digital subscriber, log in here »

Print subscriber? For free access to the website and iPad, register here »

To subscribe, click here to see our subscription offers »

Please note this is an advertisement skip this ad
Clearly, you have a passion for ideas.
Subscribe today for unlimited digital access to the publication that shapes the minds of the people who shape our world.
Get for just
YOU HAVE READ OF 8 FREE ARTICLES THIS MONTH.
FOR JUST
YOU HAVE READ OF 8 FREE ARTICLES THIS MONTH.
FOR JUST
Welcome to Commentary Magazine.
We hope you enjoy your visit.
As a visitor, you are allowed 8 free articles.
This is your first article.
You have read of 8 free articles this month.
YOU HAVE READ 8 OF 8
FREE ARTICLES THIS MONTH.
for full access to
CommentaryMagazine.com
INCLUDES FULL ACCESS TO:
Digital subscriber?
Print subscriber? Get free access »
Call to subscribe: 1-800-829-6270
You can also subscribe
on your computer at
CommentaryMagazine.com.
LOG IN WITH YOUR
COMMENTARY MAGAZINE ID
Don't have a CommentaryMagazine.com log in?
CREATE A COMMENTARY
LOG IN ID
Enter you email address and password below. A confirmation email will be sent to the email address that you provide.