Things That Are Not a Ponzi Scheme, Not a Bubble (Social Security)
From Paul Krugman/NYT – Take the common claim on the right that Social Security is a Ponzi scheme because the system has few real assets.
It’s true that Social Security is mainly a system in which each generation pays for the previous generation’s retirement, in the expectation that it will receive the same treatment from the next generation.
But like monetary circulation, this process can go on forever; there’s nothing unsustainable about it (yes, demography, but that’s about the levels of taxes and benefits, not the fundamental nature of the scheme). So there’s nothing Ponziesque at all.
Read the rest: Things That Aren’t Bubbles – Krugman – 10/22/2012 – http://nyti.ms/PMlWwo
PLEASE SEE ALSO: FIVE HUGE MYTHS ABOUT SOCIAL SECURITY