Although pyramid scams were deemed illegal, when such scams are approved by Unions and/or Government the scam continues!

As we all know a pyramid scam is based on the principle that building a mass of workers under you over time allows you to reap major benefits from their labor. You promise those people under you that they will also get the same benefits in time and they just need to get a mass of workers under themselves. The problem is that those new workers never are able to amass enough people under them to support the promised benefits. And the whole thing crumbles.

Here’s a good reference on Pyramid Scams. Just think of Pensions and Social Security as you read this.

Likewise, Pension Plans and Social Security are also based on the premise that the first group of workers into a company or nation’s labor force will pay into a system and then be paid benefits via additional money put into the system by a larger mass of workers after them. Like Pyramid scams the people paying into pensions and social security expect big returns when they’ve put little in to begin with. With social security the rate of return is often lower than with pensions, but in each case the beneficiary gets paid via other workers putting money into the system. Pensions and social security are always underfunded, because the money is pooled and then spent by the managers of the money. In the case of pensions the money is spent by company executives on other things and with social security congress spends the money on other things. But the pool of money is always short! Just like with a pyramid scam, where the pool of money is mostly given to the people at the top! In all these cases the pool of money is always underfunded and the claims of a “secure” plan have always proven to be a big fat lie!

So in order for these plans to continue paying, the institution behind them must continue to grow! With pyramid scams, all is great so long as everything is growing. With pensions everything is great so long as the company is growing. With social security everything is great so long as the national work force is growing! And with all these plans they eventually stop growing! No company or national labor force grows to infinity! But these “pay as you go” systems require it! And so they all eventually collapse!

So with Social Security, of course private accounts makes more sense. Because then the individual puts in their own money and reaps the gains of interest made on their own personal investment. I agree with Starr Parker who recommends that we End Social Security! What she says is applicable to everyone!

With Pension Plans, new companies are already learning from the mistakes made by old ones and not offering a pension plan in many cases. Most new companies offer personal retirement account styled plans like a 401(k). If the company matches employee contributions it is done in real time, no waiting till retirement for the worker to see the money in their own personal account!

So let’s be done with these “we will pay you later for your hard work today” scams! Let people put money away for themselves. Give them their money to save in their own accounts with their name on it! Now if someone wants to be a FOOL and not save the money given to them, that would have otherwise been placed into one of these SCAMS! I say that’s what charities are for! Charity is not the role of government! Let them live off the donations of individuals that desire to give to charity cases! Charity is the role of the church, not government and I’m sure we’d have more people thankful to GOD if churches were doing the charity instead of GOVERNMENT! Or as I’ve heard a friend say god-verment!

GM’s CEO knew that pensions are a scam! That’s why he setup a separate retirement plan for himself! Shareholders should have balked at this when it was first announced!