We are developing the social individualist meta-context for the future. From the very serious to the extremely frivolous... lets see what is on the mind of the Samizdata people.

Samizdata, derived from Samizdat /n. - a system of clandestine publication of banned literature in the USSR [Russ.,= self-publishing house]

Samizdata quote of the day

“It is noteworthy that in all the glaring headlines and TV news media’s Pecksniffian commentary about Bernard Madoff’s $50 billion scam and now R. Allen Stanford’s multi-billion dollar gold brick, not one word has been heard about the federal government’s own ongoing confidence scheme. The recent “bailouts” of banks, mortgage companies and automakers, together with the $787 billion “stimulus” legislation and the $75 billion home mortgage “rescue” plan signed by President Barack Obama last week, share the same attributes and methodology as Madoff’s and Stanford’s, and differ from them only in scale. Compared to Congress, the U.S. Treasury, the Federal Reserve, and the myriad perpetuated entitlements such as Medicare, Social Security, the Federal Employees Retirement System, confidence men Madoff and Stanford are mere small-time grifters.”

Edward Cline.

He’s right. Ponzi schemes and much public sector pension/benefits systems are more or less identical. I guess the caveat is that with Mr Madoff and others, they were allegedly claiming, falsely, to be running funded schemes with actual investments in real assets. But the broad point is valid.

8 comments to Samizdata quote of the day

  • armchairpunter

    Wait. Social Security is funded with actual investments in real assets?

  • Mrs. du Toit

    Politicians keep repeating the words “Social Security Trust Fund” to give the impression that there is one. Some folks actually believe that there is a Scrooge McDuck vault fully of gold, rather than IOUs.

    Repeat a lie often enough… Big Lie theory. It works.

    The more recent lie is that “our grandchildren will be paying for these bailouts.” No, they won’t. WE will. That’s the lie to cover the fact that the middle class will not be seeing a tax increase, runaway inflation, and other “sin” taxes to increase taxes in ways people don’t notice.

    Ponzi schemes work until you run out of people in the bottom wrung. Well, with Social Security that will be in @2014, when the pyramid flips, and we start paying out more than we’re taking in. Nothing in the Fed budgets addresses the fact that the budget has been supplemented by Social Security receipts, and those supplements are soon going to be a drain.

    Social Security payouts (and other entitlements) are also why “Bush spent more than any other President.” Which is true, but it is a lie. The entitlement payments are rising, so even if every other line item in the budget remained the same, the outlays increase. Congress hasn’t addressed the issue, and they’re the only body that can.

    The President doesn’t have the power of the purse. Only Congress does. The truth is that “Congress spent.”

    “The rich” are not numerous enough to fund the bailouts, even at 100% taxation it isn’t enough. (Even at 100% taxation, it is only 1.3 of the 4.0 trillion needed.)

    All of these are lies to distract from the reality that the middle class is ALWAYS the bottom wrung of any Ponzi scheme the government designs.

    So it isn’t just Social Security and pension funds. The entire Federal budget is a ponzi scheme, thought to be fundable by “the rich.”

  • Laird

    You’ve seen this Frederick Bastiat quotation before, but it bears repeating: “The government is the great fiction through which everybody tries to live at the expense of everybody else.”

    Or perhaps Orson Scott Card said it better: “If pigs could vote, the man with the slop bucket would be elected swineherd every time, no matter how much slaughtering he did on the side.” In our society, pigs do vote, and there are a lot of them.

  • Johnathan Pearce

    Wait. Social Security is funded with actual investments in real assets?

    No. I did not say it was, unless my English is going squiffy on me today.

  • Relugus

    You forgot to mention the “Spentagon”.

    The Pentagon can’t account for 25% of its budget.

    It lost over $3 trillion of taxpayers money and has got away with it.

    It buys weapons and equipment and then realises it does not need them so throws them in the bin, wasting even more taxpayer money.

    It has connections with various lobbyists and corporations making much of its budget effectively pork and corporate welfare.

    It has a bigger budget than all other nations combined (ridiculous and totally unnecessary).

    And it gets away with this because anyone who points out that its budget is disgustingly bloated and wasteful immediately gets accused of being “unpatriotic”.

  • I think I am beginning to miss the LVT guy.

  • cubanbob

    If the figures mentioned above are correct, the food fight will begin in 2014 when the social security recepients square off against the government pensioners and welfare recipients. At the current rate it is unlikely that governments both at the national and local and state levels will be able to generate enough revenue from tax increases and won’t have their credibility to sell bonds to cover those outflows. Cuts will have to be made and the fight amongst the hogs will be a spectacle indeed.

  • Paul Marks

    The amount of money the Federal Reserve and the Congress have approved spending recently is several TRILLION Dollars – which makes Mr M.s 50 billion Dollars look rather small.

    As for for total liabilities (including Social Security, Medicare and the rest).

    These liabilities are over 100% of “G.D.P.” (the measure of economic output that economists tend to cite).

    However, it is not the Gross Domestic Product of the United States – but of the entire world.

    In short the United States government is bankrupt and T. bills will, sooner or later, be seen for the worthless bits of paper they are.