bripat9643
Diamond Member
- Apr 1, 2011
- 170,170
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No it's not a Ponzi scheme.
They are not paying current retirees with current revenues because they don't have any choice.?
Yes they are paying current retirees with current revenues.
The only way those securities can be redeemed is with current revenues. Who do you think is on the hook for them, the tooth fairy? The taxpayers are the ones on the hook.
Ponzi schemes pay older investors with new money because they don't have any other money.
That describes SSI perfectly. You have to be terminally naive not to understand that.
US treasuries are redeemed all the time. What do you think money market accounts do with their cash? What do you think pension funds all across this country do with their cash? When an American buys a T-bond, for the interest, where do you think the $1000 went? Where do you think it comes from when the bond matures?
You are way out of your depth.
When a private citizen or corporation redeems a Tresury Bond, current taxpayers are the ones who pay it off. It does the government no good to hold T-Bills because the government is the party that issues the T-Bills.
It's the same with I.O.U.s. If I give you an I.O.U., and you give me money, then that I.O.U. would be worth actual money if I can be counted on to pay it off. However, if I issue an I.O.U. to myself, it's worth exactly nothing.
That's what the T-bills in the so-called Trust Fund are: I.O.U.s that the government issued to itself.
They are absolutely worthless.
Anyone who doesn't understand that is terminally clueless.