Bernard Madoff

Social Security: The Biggest Ponzi Scheme

Tue, 12/16/2008 - 7:30am | posted by Matt Wittlief

In 1920, Italian immigrant, Charles Ponzi, developed a scheme which promised high-yield returns on the arbitrage and trade of international postal reply coupons. It sounds like a fancy scheme even today and it fooled many investors at the time. Ponzi, however, was not actually making such investments. He was taking money from new investors, drawn by the promise of high returns, to pay off past investors. A brilliant little scheme except for the fact that it is essentially stealing and fraudulent. This basic framework is now called a Ponzi scheme, and former NASDAQ chairman, Bernard Madoff, has been implicated in what may be the biggest Ponzi scheme of all time.

Social Security, Bernard Madoff and Charles Ponzi

Fri, 01/02/2009 - 12:12pm | posted by Jason Pye

In a letter to The New York Times, Don Boudreaux compares the Ponzi scheme of Bernard Madoff to Social Security:

Like many people, Ben Stein was assured that Bernard Madoff “never lost money” (“They Told Me That Madoff Never Lost Money,” Dec. 28). Unlike many people, Ben Stein wisely understood this assurance to be nonsense. Americans should apply Mr. Stein’s wisdom to the greatest Ponzi scheme going: Social Security. Many pols and pundits assure us that this program is a great financial deal for ordinary Americans.