Guess the biggest PONZI schema of our lifetimes
Before we begin the guessing game, lets first try to understand what a PONZI scheme is ?
A Ponzi scheme is a fradulent investment operation that pays returns to investors from their own money or money paid by subsequent investors rather than from any actual profit earned. The Ponzi scheme usually offers returns that other investments cannot guarantee in order to entice new investors, in the form of short-term returns that are either abnormally high or unusually consistent.
The perpetuation of the returns that a Ponzi scheme advertises and pays requires an ever-increasing flow of money from investors in order to keep the scheme going.
The system is destined to collapse because the earnings, if any, are less than the payments. Usually, the scheme is interrupted by legal authorities before it collapses because a Ponzi scheme is suspected or because the promoter is selling unregistered securities. As more investors become involved, the likelihood of the scheme coming to the attention of authorities increases.
The scheme is named after Charles Ponzi who became notorious for using the technique after emigrating from Italy to the US in 1903
Now Let us look at what our Social security system does
Collect SS taxes from younger generation to pay off the older generation
Is not SS the biggest PONZI scheme ever, but sure yeah, a regulated, governed and mandated Ponzi scheme, where the contribution is not attracted but forced.
So is Madoff the biggest Ponzi or is the US Govt that busted him is even a bigger Ponzi
Post your thoughts ?