Social Security Is NOT a Pyramid Scheme, Penn! (Video)

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Easy Money” is a Penn & Teller Bullshit! episode with all the trademark gimmicks and attitude, but with a screaming flaw – Penn Jillette’s Social Security tirade.


It’s not just that Social Security is a government program, not a non-sustainable business model. Or, that Penn & Teller seemed to be channeling Thomas Sowell.

Politicians may decide to give Social Security pensions with one hand and take back part of it with the other hand in higher taxes. Or they could jack up the Social Security taxes on the working population. Or they may do some combination of these things.

What they will not do is tell you that Social Security was a lie from day one. Your taxes were never being put aside in some “trust fund” and there cannot be any “lock box” for these non-existent funds, for Congress has the power to spend every dime that reaches Washington — and can borrow more on top of that.

Social Security has been a pyramid scheme from the beginning. Those who paid in first received money from those who paid in second — and so on, generation after generation. This was great so long as the small generation when Social Security began was being supported by larger generations resulting from the baby boom.

But, like all pyramid schemes, the whole thing is in big trouble once the pyramid stops growing. When the baby boomers retire, that will be the moment of truth — or of more artful lies. Just like Enron.

Leave aside for the moment the issue of the accounting projections, the fact that there is real money and assets backing up the Trust Fund unlike any pyramid scheme, the counter-factual reasoning without even a description of a world without Social Security, or that voters elected these politicians and will continue to do so. As The Economist notes, “Any serious economist will tell you that the primary fiscal challenge facing America is its spending on health-care programmes, like Medicare and Medicaid, and Social Security. And any solution to those problems will involve mid- to long-term reforms that don’t necessarily need to upset short-term efforts aimed at recovery and job creation.” Social Security accounts for one-fifth of the Federal budget, slightly more than defense and health care. It’s not a hidden scheme without a track record or paper trail. It’s been amended, pilloried, and then amended further. Unless voters slept through all those rounds of voting for those wicked politicians, voters are responsible for the parlous state of the program. In other words, Penn is creating a bogeyman and coming awfully close for a skeptic to creating a conspiracy theory.

But, the other parts of the show skewering multi-level marketing were a delight to watch!

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Filed under: Business/Economy, History, Humor-(less), Politics, Quick Posts, TV, YouTube Tagged: bullshit, multi-level marketing, penn & teller, pyramid schemes, Social Security

 

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