🚀 go-pugleaf

In article <Pine.GSO.3.95.970126162115.25839A-100000@ucsub.Colorado.EDU>,
   Thomas Reasoner <reasonet@ucsub.Colorado.EDU> wrote:
>For those of you who are considering this as an option to easy money, I
>hope you all realize that it is mathematically IMPOSSIBLE. 

Sounds like social security.

>who came up with this will probably make a ton 

The first lady to receive social security made about one payment into it
and then retired.  She then received payments for the next 30 or so years.
She broke even after about the second payment she received and everything
beyond that was just icing on the cake.

>stupid people in the world) but after him the money will begin to drop off
>until there's some poor saps out there who lose $1-5 on this deal.

Think about all the people born in the last 30 years.  As the system exists
now they will spend their whole lives paying roughly 5% of each paycheck
into social security, and statasticians are saying now that in less than
10 years the fund will be a dry well.

>I mean, just think about this for a second.

I am, I am thinking about it.

>There are a finite number of people who will actually do this.

Every US citizen has to pay into social security.  The only way a scheme
like social security can actually work is if the number of people entering
the work force is growing faster than the number leaving the work force
and taking benefits.  That hasn't been happening.  In the past 30 years
the median age in the US has been going up; more old people on the dole,
fewer young people to financially support the structure.

>If all of these people give five dollars how
>can all of them turn a profit? There will be very few people who make a
>lot of money, a few more will make some money, some might actually break
<sniff, sniff>
>even, but many more people will have fueled their income without recieving
>any sort of service in return. 

Sounds like a prediction of the future.

>Personally, I thought that if you give someone else your hard earned cash, 
>you should recieve some sort of service in return. 

I agree.  Be careful about giving your hard-earned cash to someone else.

>Also, for the few who will make money, don't you think this kind of thing 
><sp>wreaks of welfare, you are in a <sp>sence getting money for sitting on 
>your ass. 

Think of the first lady to receive benefits.  How many years did she sit
on her ass receiving money she didn't earn?


>I would rather rot in hell then conn people out of a few meaningless pieces 
>of paper. 

The greenback isn't completely meaningless but it's become less meaningful
since we went off the gold standard 30 years ago.

>Excuse me, but there are more important things in life than getting rich 
>quick.

Tell that to Bill Gates and let me know what he says.  Bill Gates' retirement
isn't in jeopardy, but for the majority of Americans, a comfortable retirement
is questionable.  The problem is savings is low, personal debt is high, and
the unfunded liabilities, including social security, of our Federal government 
is the largest it's ever been, $15 Trillion according to several reports I've 
read, three times the amount of treasury securities floating about.  And the
figure is growing. 

So, what does the fed do about all this?  They could always raise taxes to,
say, 80%.  That's always an option.  In fact its the only sustainable way a
government can generate revenue.  But how many of you would be willing to
pay even 60% income taxes without feeling like murdering a politician?  In 
the next couple years Clinton will have to work with congress to reform social 
security, the historically sacred cow in Washington.  I'd be surprised if
it doesn't become a sacrificial cow.  My understanding is the only thing
the two parties agree on with regard to this issue is that to do nothing
is unacceptable.

Other options for the fed to consider?  How about the agressive savings 
program; you know, the one where we invest our retirement money in the
stock market.  And the riskier the investment the greater the potential
return.  I don't know if any of you have been watching this stock market
but stocks are at historical highs right now.  I wouldn't put a red cent in
stocks right now, and certainly not all my retirement savings.

I'm really not trying to bash our public servants in Washington because I
believe they're thinking really hard about this problem (I envision blood
vessels bulging on their foreheads).  I just think that somehow we're on
another collision course with a macro financial breakdown.  And social
security is hardly the only financial problem the fed is facing.

Consider the $5 Trillion federal debt, funded primarily by foreign money,
specifically Japan.  If the Japanese change their mind about the 
attractiveness of our treasury securities things could get rough.  If
the Japanese start selling our treasury securities en mass, this will have
a dramatic impact on interest rates.  Clinton knows this, Greenspan knows 
this, and so do a host of bureaucrats and economists.  In fact the only 
thing keeping interest rates so low is a huge influx of money from foreign
countries, specifically Japan.  I sure hope the economy never picks up in
Japan.

On the flipside, quality of life in this country is the best in the world.
Education is expensive, but affordable, hence it's valuable.  Most peoples'
income exceed thier payments, so it's not all doom and gloom yet; we just
need to be a little careful and consider the future, 10 or 20 years down
the road.  And an expanding economy does wonders for peoples' disposition.

>
>Sincerely,
>Tom Reasoner
>

Tom, I agree with you 100%.  Ponzi schemes are great for the first few people
to get involved but in the long term they can only work if there are an
infinite number of people.

	Aloha from the sunny state of Colorado
	R. Foreman