Wall Street Corruption

Wall Street was shaken with the announcement of the arrest of Bernard Madoff for securities violations. It is now evident that the hedge fund he ran was nothing more than a glorified Ponzi scheme. He survived the last few years by using "smoke and mirrors" to hold it together. Ultimately, like all Ponzi schemes, the money from new investors dries up. That is what occurred in this situation.

The tipping point came when investors requested withdrawals from the fund in the total amount of $7 billion. Obviously, this money was not there. Typical of schemes like these, the investors who got in last are the ones left losing. Everything moves smoothly so long as there are new funds coming in since money is raised to pay off previous investors. When the new investment ceases, there are no profits to pay the investors.

Madoff is being charged and will most likely spend the rest of his life (since he is up there in years) in jail. He lost billions of dollars. Many affluent people are now realizing they are broke. This is a crime which destroys many families and deserves ample punishment. I have faith that Madoff will get his due.

Ponzi schemes are illegal for obvious reasons. It is a system which is not sustainable after a certain period of time. The concept of taking in new money to pay older obligations is not what the government feels is appropriate. Therefore, they outlawed this type of system.

But did they really? They made it illegal for a private citizen or corporation to utilize. However, the government believes that it has the right to run Ponzi scheme. It has no problem taking new money in to pay for old obligations. This is where it tells us that it is taking care of us. We are led to believe that a failed system is in our best interest.

What is the Ponzi scheme I am referring to: Social Security. This is the grandest of all pyramid schemes. We are now confronted with a situation where this mechanism is going broke since there are not going to be enough people paying in as compared to those making withdrawals. Sound familiar. It got Madoff into a bit of hot water. This makes me think perhaps the Justice Department ought to arrest those involved in this corruption also.

This is how our government operates. An activity which is illegal for the average person is undertaken by the powerful in government. Social Security is the epitome of this idea. The government engages in an illegal activity all for the "betterment of the people". This is a bunch of garbage. We ought to jail everyone involved in this with Madoff.

One final thought, now that you know that Social Security is a Ponzi scheme, is it any wonder that it is going broke?

Share and Enjoy!