American Healthcare continues to go backward

I don't agree with that assessment, as Social Security does not meet the definition of a ponzi scheme. This is a good article that breaks it down: https://www.fool.com/retirement/2024/03/10/is-social-security-a-ponzi-scheme-answer-surprise/

I am more interested in a solution though. From the same article, this seems to diagnose the issues that Social Security faces:

Here's what's really wrong with Social Security​

In addition to the fallacy of Social Security being a Ponzi scheme, other outright lies have made the rounds on social media, including "Congress stole from Social Security" and that "undocumented workers are receiving benefits." None of these claims bear any bit of truth for why Social Security is contending with a $22.4 trillion long-term funding shortfall.

The bulk of Social Security's financial shortcomings can be traced back to demographic shifts.

Some of these shifts are well known. For instance, the steady retirement of baby boomers is lowering the worker-to-beneficiary ratio over time. Likewise, life expectancies have notably risen since the first retired-worker check was mailed in January 1940. Social Security was never meant to pay beneficiaries for multiple decades, as can happen now.

But it's the less-visible demographic shifts that are causing the most harm.

As an example, legal migration into the U.S. has declined for 25 consecutive years. Most legal immigrants arriving in the U.S. tend to be young, which means they'll spend decades in the labor force contributing to the program via the payroll tax before collecting a benefit of their own. Social Security relies on a healthy level of net migration into the U.S., and this figure has been precipitously declining.

Another problem for America's leading retirement program is a historic decline in U.S. birth rates. Although a lower number of births isn't a problem right now, it will become an issue a generation from now when the worker-to-beneficiary ratio falls even further.

Income inequality is an obstacle, as well. In 1985, 88.9% of all earned income was subject to the payroll tax. But as of 2021, only 81.4% of earned income was applicable to the payroll tax. More earned income is "escaping" taxation over time.

Lastly, Congress deserves its fair share of the blame. Lawmakers are well aware of the issues facing Social Security, but neither party has been willing to work with their opposition to find a common-ground solution. The longer lawmakers wait to act, the more painful an eventual solution is going to be for working Americans and Social Security beneficiaries
lol, social security doesn’t meet the definition of a Ponzi scheme because social security doesn’t meet the definition of a Ponzi scheme. I’ve shown clearly why it’s a Ponzi scheme. You have to show clearly why it’s a fallacy, you can’t just say it’s one. What you’ve done in this article is to back up what I’ve said about the Ponzi scheme collapsing.
 
lol, social security doesn’t meet the definition of a Ponzi scheme because social security doesn’t meet the definition of a Ponzi scheme. I’ve shown clearly why it’s a Ponzi scheme. You have to show clearly why it’s a fallacy, you can’t just say it’s one. What you’ve done in this article is to back up what I’ve said about the Ponzi scheme collapsing.
Nice straw man of the argument. I think you skipped the following points:
1) Social Security is not an investment vehicle
2) A portion of Social Security that is paid out from interest on treasury bonds, not exclusively from people who pay into the benefit
3) The larger issue is inadequate payroll taxes to cover the amounts being paid out currently.

Unsustainable in its current form =/= ponzi scheme
 
Nice straw man of the argument. I think you skipped the following points:
1)
2) A portion of Social Security that is paid out from interest on treasury bonds, not exclusively from people who pay into the benefit
3) The larger issue is inadequate payroll taxes to cover the amounts being paid out currently.

Unsustainable in its current form =/= ponzi scheme

1. You pay into it with the expectation of a return, do you not?
2. Aka “new investors”
3. Aka not enough new investors

You are proving my point.
 
1. You pay into it with the expectation of a return, do you not?
2. Aka “new investors”
3. Aka not enough new investors

You are proving my point.
It's not and your argument is very silly. Did the first people who paid into Social Security get a much larger sum of money than the people who paid in later or who are getting their checks today?

Also, how do you square this idea with the fact that 65 was the average life expectancy when Social Security was rolled out back in 1936, and now it is 77-79? Wouldn't that suggest that the cost of the benefit per person has gone up considerably as we have started to live longer?

Better yet, lets compare Social Security directly against the features of a ponzi scheme:
  1. A guaranteed promise of high returns with little risk - no, there is no promise of high returns.
  2. A consistent flow of returns regardless of market conditions - yes, but in similar amounts that are paid in. There is no "massive return" for anyone.
  3. Investments are not registered with the SEC - N/A
  4. Sellers are not licensed to sell investment products - no, its the government.
  5. Investment strategies that are "secret" or described as too complex to explain - no, its relatively simple and easily accessible
  6. Failure to provide clients with documentation for their investment - no, it is in plain language.
  7. Difficulties withdrawing money - no, not for the first 89 years it has been implemented.
Source: https://www.investopedia.com/terms/p/ponzischeme.asp

Looks like a swing and a miss.
 
It's not and your argument is very silly. Did the first people who paid into Social Security get a much larger sum of money than the people who paid in later or who are getting their checks today?

Also, how do you square this idea with the fact that 65 was the average life expectancy when Social Security was rolled out back in 1936, and now it is 77-79? Wouldn't that suggest that the cost of the benefit per person has gone up considerably as we have started to live longer?

Better yet, lets compare Social Security directly against the features of a ponzi scheme:
  1. A guaranteed promise of high returns with little risk - no, there is no promise of high returns.
  2. A consistent flow of returns regardless of market conditions - yes, but in similar amounts that are paid in. There is no "massive return" for anyone.
  3. Investments are not registered with the SEC - N/A
  4. Sellers are not licensed to sell investment products - no, its the government.
  5. Investment strategies that are "secret" or described as too complex to explain - no, its relatively simple and easily accessible
  6. Failure to provide clients with documentation for their investment - no, it is in plain language.
  7. Difficulties withdrawing money - no, not for the first 89 years it has been implemented.
Source: https://www.investopedia.com/terms/p/ponzischeme.asp

Looks like a swing and a miss.
Ida Mae Fuller made, let’s see, 24 gazinta 22,000 916 times, times a hunnert… a 91,000% return on investment. Sounds like a pretty high gain to me. The fact of the matter is, the only thing that limits how much you take out is how long you live, and the longer life spans means you gain more.

You are arguing against yourself.
 
Ida Mae Fuller made, let’s see, 24 gazinta 22,000 916 times, times a hunnert… a 91,000% return on investment. Sounds like a pretty high gain to me. The fact of the matter is, the only thing that limits how much you take out is how long you live, and the longer life spans means you gain more.

You are arguing against yourself.
RX, you seem to have skipped the whole "seven characteristics of ponzi schemes" part because we both know that when you put social security next to enron they look nothing alike.

Who gains more: The guy who collects 5 years of social security from 1960-1965 before he passes, or the lady who collects 20 years of social security from 2005 to 2025?
 
RX, you seem to have skipped the whole "seven characteristics of ponzi schemes" part because we both know that when you put social security next to enron they look nothing alike.

Who gains more: The guy who collects 5 years of social security from 1960-1965 before he passes, or the lady who collects 20 years of social security from 2005 to 2025?
Enron was not a Ponzi scheme in the strict legal or financial sense, but it shared some deceptive characteristics.

Key differences:
  • Ponzi Scheme Definition: A Ponzi scheme pays returns to earlier investors using money from new investors, not from legitimate business profits. It relies on constant inflow of new money.
  • Enron’s Case: Enron was a massive accounting fraud, where the company used off-balance-sheet entities and creative accounting tricks (like mark-to-market accounting) to hide debt and inflate profits, misleading investors and analysts.
What Enron did:
  • Created special purpose entities (SPEs) to keep debt off its books.
  • Reported projected (not actual) future profits as current earnings.
  • Hid losses and liabilities, maintaining a false image of strong growth.
  • Used stock price manipulation to maintain investor confidence.
Why it wasn’t a Ponzi scheme:
  • It didn’t pay “returns” to earlier investors with money from new ones.
  • It was an actual energy trading and infrastructure company—though deeply fraudulent.
Final verdict:

Enron was a case of corporate fraud and accounting malpractice, not a Ponzi scheme. It was one of the worst business scandals in U.S. history—but technically different from Ponzi schemes like Bernie Madoff’s.
 
Enron was not a Ponzi scheme in the strict legal or financial sense, but it shared some deceptive characteristics.

Key differences:
  • Ponzi Scheme Definition: A Ponzi scheme pays returns to earlier investors using money from new investors, not from legitimate business profits. It relies on constant inflow of new money.
  • Enron’s Case: Enron was a massive accounting fraud, where the company used off-balance-sheet entities and creative accounting tricks (like mark-to-market accounting) to hide debt and inflate profits, misleading investors and analysts.
What Enron did:
  • Created special purpose entities (SPEs) to keep debt off its books.
  • Reported projected (not actual) future profits as current earnings.
  • Hid losses and liabilities, maintaining a false image of strong growth.
  • Used stock price manipulation to maintain investor confidence.
Why it wasn’t a Ponzi scheme:
  • It didn’t pay “returns” to earlier investors with money from new ones.
  • It was an actual energy trading and infrastructure company—though deeply fraudulent.
Final verdict:

Enron was a case of corporate fraud and accounting malpractice, not a Ponzi scheme. It was one of the worst business scandals in U.S. history—but technically different from Ponzi schemes like Bernie Madoff’s.
Two can play the AI game:

Enron is often described as having characteristics of a Ponzi scheme, although its complexity and facade of legitimate business made it fundamentally different from simpler scams named after Charles Ponzi. Here's how Enron functioned to resemble that structure:

Excessive Returns, No Legitimate Profit: Like any classic Ponzi scheme, the core idea was to generate returns for investors without genuine underlying value or profit. Enron achieved this through complex financial engineering.

Early Success (Real but Distorted): Initially, Enron operated legitimate businesses in energy trading and other areas, which generated real profits using mark-to-market accounting principles early on.
The Fraudulent Engine: The primary mechanism for creating phantom profits was the creation of Special Purpose Entities (SPEs). These were shell companies set up primarily to hide debt and liabilities from shareholders. By transferring assets and liabilities off Enron's main books but keeping the asset value on its balance sheet, they created artificial profit.
"Cooking the Books": They also manipulated accounting records directly through "mark-to-fantasy," essentially valuing assets at fictitious high levels.
Use of Prior Returns to Attract New Investors: A defining feature of a Ponzi scheme is using money from new investors to pay returns (interest or profit) to existing ones.

Enron had feeder funds – smaller funds that invested primarily in Enron's stock or preferred shares, and larger funds that lent money to Enron. These entities were essentially the pipeline for fresh investment. The proceeds from these investments helped fuel the scheme itself.
Inability of Operations to Generate Enough Profit: Ponzi schemes collapse not because operations fail (they are designed not to), but because new investors stop pouring in.

Enron's legitimate business activities, particularly its risky energy trading deals ("power broking"), were potentially unprofitable or lost significant value due to market volatility and mismanagement. The company relied heavily on constantly finding more new money from institutional investors and high-net-worth individuals through the feeder funds structure.
Lack of Legitimate Business Foundation (Eventually): While starting as a legitimate energy technology company, Enron's core business model became increasingly unsustainable and fraudulent.

They shifted focus heavily towards complex derivatives trading within their own organization (e.g., through EGM). The value generated wasn't from external market activity but from structuring deals that were essentially self-referential or guaranteed high returns for themselves. This lack of a traditional profit-generating model mimics the Ponzi structure.
Confidence Game Aspect: Enron presented itself as a highly innovative and profitable company to sophisticated investors. They cultivated an image of success, using complex jargon (often misunderstood by outsiders) and leveraging prestigious consultants like Arthur Andersen for unqualified audits. This reliance on maintaining investor confidence through deception is a hallmark of Ponzi schemes.

In essence:

Enron used the massive inflow of capital from its own feeder funds structure to artificially inflate profits reported to shareholders, primarily through complex accounting tricks involving SPEs and manipulated mark-to-market valuations (or direct book cooking). The money pouring in wasn't being genuinely invested or earned through external operations but was recycling within Enron's financial system. This is the core Ponzi dynamic: paying investors back with new investor funds rather than from actual earnings.

Although the methods were more complex than Madoff's direct fraud, and Enron did have some initial legitimate business, its overall structure – particularly how it deployed investment capital to generate returns for existing shareholders through a feeder fund model dependent on constant new inflows and obscured by accounting loopholes – shares the fundamental characteristics of a Ponzi scheme.
 
Two can play the AI game:
Mtv Bust GIF
 
I wonder when the US health care system started transitioning away from non profit and when health insurance companies started becoming publicly listed?

According to Google AI

Shift Towards For-Profit Models and Market Access:
1980s Deregulation: Deregulation in the 1980s made for-profit companies more common in healthcare, including health insurance.
Response to Medicare and Medicaid: Medicare and Medicaid's introduction in the 1960s highlighted healthcare as a profit center, possibly influencing the rise of publicly traded companies.
Blue Cross and Blue Shield Plans: The Blue Cross and Blue Shield plans allowed member plans to become for-profit insurers in 1994, seeking stock market access to address financial issues.
Early Publicly Traded Companies:
UnitedHealth Group: UnitedHealthcare Corporation, founded in 1977, became publicly traded in 1984.
Other Early Players: Aetna and Cigna offered major medical coverage by 1951, but likely became publicly traded later as for-profit models grew.
The Stock Market's Role:
Access to Capital: Public trading allowed health insurance companies access to the stock market to raise capital.
Investor Interest: The late 1970s saw growth in health companies' net earnings with public stock shares, indicating increased investor interest.
 
According to Google AI

Shift Towards For-Profit Models and Market Access:
1980s Deregulation: Deregulation in the 1980s made for-profit companies more common in healthcare, including health insurance.
Response to Medicare and Medicaid: Medicare and Medicaid's introduction in the 1960s highlighted healthcare as a profit center, possibly influencing the rise of publicly traded companies.
Blue Cross and Blue Shield Plans: The Blue Cross and Blue Shield plans allowed member plans to become for-profit insurers in 1994, seeking stock market access to address financial issues.
Early Publicly Traded Companies:
UnitedHealth Group: UnitedHealthcare Corporation, founded in 1977, became publicly traded in 1984.
Other Early Players: Aetna and Cigna offered major medical coverage by 1951, but likely became publicly traded later as for-profit models grew.
The Stock Market's Role:
Access to Capital: Public trading allowed health insurance companies access to the stock market to raise capital.
Investor Interest: The late 1970s saw growth in health companies' net earnings with public stock shares, indicating increased investor interest.
It’s almost like there’s a correlation there somewhere.
 
It’s almost like there’s a correlation there somewhere.
There is.

But, to be completely fair, health care has changed a lot over this time period also. As late as the 1980s when you had a heart attack you laid in a bed, got an aspirin, and were given oxygen (no benefit), morphine (only benefit is pain relief, likely some harm) and they waited.

You know me well enough that I'm not making excuses for our horrific system. But, it isn't exactly an apples to apples comparison. We can do a lot more than we did in the past.
 
Two can play the AI game:

Enron is often described as having characteristics of a Ponzi scheme
If having similarities to a Ponzi scheme is enough, then...

Social Security is like a Ponzi scheme in some structural ways, but the comparison breaks down quickly when you look deeper. Here are the main similarities, followed by important context:




🔁


1.​


  • Social Security: Current workers' payroll taxes fund the benefits of today’s retirees.
  • Ponzi Scheme: New investors' money pays returns to earlier investors.
  • In both cases, there’s no direct link between what you pay in and what you get out—your benefits depend on continued inflows from others.



2.​


  • If the number of workers per retiree shrinks (as it is), the system becomes strained.
  • Similarly, Ponzi schemes collapse when new investors dry up.



3.​


  • A Ponzi scheme appears healthy as long as money flows in.
  • Social Security has appeared solvent for decades, but demographic changes mean it’s now paying out more than it takes in.
  • Without reform, the Trust Fund may be depleted by the mid-2030s, leading to reduced payouts—highlighting the intergenerational risk.



4.​


  • People who retired in earlier decades (like the 1960s–1980s) often received far more in benefits than they ever paid in.
  • Ponzi schemes work the same way—early participants benefit, late ones lose.



5.​


  • Participants don’t “own” their contributions. The money goes to the government, not into a personal account like a 401(k).
  • Like in a Ponzi scheme, your return depends on how much is available when it’s your turn.



⚠️ But here's where the​


  • Social Security is legal, public, and transparent.
  • It has a Trust Fund, invested in U.S. Treasury bonds (a real asset).
  • It can be reformed—through higher taxes, benefit adjustments, or age changes.
  • It’s not fraudulent—you know exactly how it works.



🧠 Bottom Line:​


Social Security is like a Ponzi scheme in structure—but not in intent, legality, or sustainability.
The similarities make for a compelling talking point, especially for critics, but it’s ultimately a government-managed social insurance system, not a con.

Would you like a chart summarizing the similarities and differences?

No thank you, "similarities" are enough.

BTW, ChatGPT disagrees with itself about the sustainability.

As of the most recent projections from the 2024 Social Security Trustees Report, Social Security is expected to become insolvent in 2033—just 8 years from now.
 
If having similarities to a Ponzi scheme is enough, then...

Social Security is like a Ponzi scheme in some structural ways, but the comparison breaks down quickly when you look deeper. Here are the main similarities, followed by important context:




🔁


1.​


  • Social Security: Current workers' payroll taxes fund the benefits of today’s retirees.
  • Ponzi Scheme: New investors' money pays returns to earlier investors.
  • In both cases, there’s no direct link between what you pay in and what you get out—your benefits depend on continued inflows from others.



2.​


  • If the number of workers per retiree shrinks (as it is), the system becomes strained.
  • Similarly, Ponzi schemes collapse when new investors dry up.



3.​


  • A Ponzi scheme appears healthy as long as money flows in.
  • Social Security has appeared solvent for decades, but demographic changes mean it’s now paying out more than it takes in.
  • Without reform, the Trust Fund may be depleted by the mid-2030s, leading to reduced payouts—highlighting the intergenerational risk.



4.​


  • People who retired in earlier decades (like the 1960s–1980s) often received far more in benefits than they ever paid in.
  • Ponzi schemes work the same way—early participants benefit, late ones lose.



5.​


  • Participants don’t “own” their contributions. The money goes to the government, not into a personal account like a 401(k).
  • Like in a Ponzi scheme, your return depends on how much is available when it’s your turn.



⚠️ But here's where the​


  • Social Security is legal, public, and transparent.
  • It has a Trust Fund, invested in U.S. Treasury bonds (a real asset).
  • It can be reformed—through higher taxes, benefit adjustments, or age changes.
  • It’s not fraudulent—you know exactly how it works.



🧠 Bottom Line:​




Would you like a chart summarizing the similarities and differences?

No thank you, "similarities" are enough.

BTW, ChatGPT disagrees with itself about the sustainability.

As of the most recent projections from the 2024 Social Security Trustees Report, Social Security is expected to become insolvent in 2033—just 8 years from now.
RX, anyone can feed a loaded prompt into AI and get some sort of slop out the other end of it. #4 is especially silly since people were on average getting 2-5 years of payments in the 1960s-1980s, while people in the last 20 years have been getting 12-15 years of payments on average. "Social Security is a ponzi scheme" is a transparent dig at the institution, led by folks who largely don't need the funds to retire or survive. While it has its flaws, we are completely unprepared for life after it, and a number of elderly people would be absolutely destitute.

I think we should raise taxes on the highest earners and modify payroll taxes to make it sustainable for our current demographic trends.
 
RX, anyone can feed a loaded prompt into AI and get some sort of slop out the other end of it. #4 is especially silly since people were on average getting 2-5 years of payments in the 1960s-1980s, while people in the last 20 years have been getting 12-15 years of payments on average. "Social Security is a ponzi scheme" is a transparent dig at the institution, led by folks who largely don't need the funds to retire or survive. While it has its flaws, we are completely unprepared for life after it, and a number of elderly people would be absolutely destitute.

I think we should raise taxes on the highest earners and modify payroll taxes to make it sustainable for our current demographic trends.
Of course it’s a dig at the institution which has never worked the way it was sold or promised, which is going to be insolvent if it isn’t fixed, and which can’t be fixed because it is a political third rail.
 
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