Written by JimLamb on his ourmedia blog. It was originally entitled: AA-AAA-AARP-ARGH!

The Social Security program is set up in what they used call a “Ponzi Scheme” — it robs young Peter to pay an aging Paul, a practice that is as illegal as all get-out, unless, of course, you are the government.

I’m thinking about starting an organization designed for people over age 55 who drink and drive. It’ called AA-AAA-AARP.

There may be just a whiff of humor within that alphabet soup proposal — but there is not much to laugh about in the AARP’s current propaganda media blitz re: the so-called “privatization” of Social Security. I have a vested interest in this fight: I am 58 years old, and I know full well that I will never get out of Social Security what I have put in to it. The SS program is set up in what they used call a “Ponzi Scheme,” sometimes called a “pyramid scheme” — a practice that is as illegal as all get-out, unless, of course, you are the government. (See SEC Ponzi reference below.)

First, understand that the money you and I “contribute” to Social Security is not going into a “lockbox.” (I put quotes around the word contribute because I am forced to give up this money; I do not have a choice.) Your money and my money is paying off people who have previously “contributed” to the bottomless money pit into which we generously toss our funds.

Statistically, and realistically, it just can’t continue …

Consider this: Just 50 years ago, there were more than a dozen workers for every retiree. That number has dropped dramatically. Here’s what SocialSecurity.org observes: “In 1950, there were 16 workers paying taxes into the system for every retiree who was taking benefits out of it. Today, there are a little more than three. By the time the baby boomers retire, there will be just two workers who will have to pay all the taxes to support every one retiree.”

I might as well find out who my personal “contributor” will be and have him/her direct deposit the money into my checking/savings account. At least I can send a personal “thank you card” each year.

In my opinion, the Social Security system is seriously flawed – and now is the time to fix it, whatever that adjustment might be. The question is will the AARP be a roadblock to that fix or will it be a partner moving forward? Sadly, it appears the organization, institutionally inbred and overblown, is hunkering down for a media fight to please its aging current constituency with no regard to the “next generation.”

Here’s my advice to the young folks out there -– the same advice, by the way, that I have been telling my kids for years:

Do NOT count on Social Security for your retirement. It will NOT be there in any meaningful way. Plan for your retirement yourself.

I only wish someone had told me that 30 years ago.

* * *

REF: “Ponzi schemes are a type of illegal pyramid scheme named for Charles Ponzi, who duped thousands of New England residents into investing in a postage stamp speculation scheme back in the 1920s. Ponzi thought he could take advantage of differences between U.S. and foreign currencies used to buy and sell international mail coupons. Ponzi told investors that he could provide a 40% return in just 90 days compared with 5% for bank savings accounts. Ponzi was deluged with funds from investors, taking in $1 million during one three-hour period—and this was 1921! Though a few early investors were paid off to make the scheme look legitimate, an investigation found that Ponzi had only purchased about $30 worth of the international mail coupons.
“Decades later, the Ponzi scheme continues to work on the ‘rob-Peter-to-pay-Paul’ principle, as money from new investors is used to pay off earlier investors until the whole scheme collapses.”
URL: http://www.sec.gov/answers/ponzi.htm

REF: “Over this week and last, AARP, the nation’s largest lobby, will have spent more than $5 million on ads attacking the president’s Social Security plan — nearly three times as much as all the supporters of his proposal put together…”
URL: http://www.washingtonpost.com/wp-dyn/articles/A11076-2005Mar29.html

REF: “AARP’s 35 million membership base is 10 times the size of the National Rifle Association’s, and its $800 million budget is five times that of the U.S. Chamber of Commerce, the country’s biggest business association. In number of members, AARP is surpassed only by the Roman Catholic Church.”
URL: Ibid

REF: “Obviously, a pay-as-you-go system is very sensitive to the number of people paying in versus the number of people collecting benefits. In other words, the ratio of workers to retirees is crucial to the financing of the current system.”
URL: http://www.socialsecurity.org/pubs/articles/tanner-050114.html