[turkeysandwich]

It's a Ponzi scheme when it's not sustainable.

Social Security in the US, for example is not financially viable in its current form. Either the retirement age will need to be raised or its obligations will need to be abandoned, probably a bit of both.

Some but not all European pension schemes are facing similar problems.

[rufus_foreman]

>> Either the retirement age will need to be raised or its obligations will need to be abandoned

Or the OASDI tax rate could be raised, or the wage cap on the tax could be raised or eliminated, or growth in GDP might turn out to be higher than expected, or life expectancy might turn out to be lower than expected, or the official inflation rate for Social Security might turn out to be lower than the actual rate, or any number of other possibilities.

And if none of those occur, yes, one option would be to slightly raise the retirement age for people who aren't near retirement, or benefits might need to be slightly cut.

That's not unsustainable and it's not a Ponzi scheme. Ponzi promised a 50 per cent return in 45 days. Ponzi started a company to promote his scheme in January of 1920, he pled guilty on November 1, 1920. He could not have saved his scheme by reducing the rate of return to 48.5% or adding a few weeks to the maturity of the term. It was truly unsustainable in the old sense of the word, not the new meaning of, "that which has been going on for many decades, will continue to go on for many decades much as it has in the past, but which I do not particularly like".

[skywal_l]

> It's a Ponzi scheme when it's not sustainable.

That's such a general and undeveloped affirmation that you probably don't even believe it yourself.

Here is the real definition from Wikipedia:

> is a form of fraud that lures investors and pays profits to earlier investors with funds from more recent investors.

Pension systems are not a fraud. If you believe so, we do not live in the same reality.

Taxpayers and pensioners are not investors. They are people who want to live a descent life.

Not everything should be viewed as a financial market. Reducing everything in life into a spreadsheet makes you believe in fairy tales. People end up believing they are going to become millionaires by investing their hard earn dollars into actual Ponzi schemes like bitcoins and the like.

Rich countries are producing many times more than what they need. There is plenty for everyone to go around, they just need to organize themselves a little better.

[turkeysandwich]

I wasn't claiming that they're literally ponzi schemes. Clearly they're sanctioned by law, obviously I wasn't arguing otherwise.

I was simply using "ponzi scheme" in the more casual, euphemistic sense of "skeevy unsustainable scheme that will screw people over".

And like I said, I don't believe all pension schemes to be dishonest/poorly executed. Some are just fine. But many are sloppy and poorly managed. A few are even so poorly managed to an extent that I'd say it borders on fraud, if not legally, at least morally. (I don't think that's common, necessarily; I think most mismanaged pension plans are entered into with the best of intentions.)

> Taxpayers and pensioners are not investors. They are people who want to live a descent life.

I'm not blaming them. They're victims of this poor management.

https://www.pewtrusts.org/en/research-and-analysis/issue-bri...

This article paints a rosy outlook. And indeed, it's good news overall. But 35 state pensions meeting their goals means that 15 aren't. That's worth criticism.

[aaomidi]

Do you know there is a tax cap on social security?