Madoff’s Ponzi and Social Security step by step IDENTICAL

What Madoff did to investors in his Ponzi is…

exactly what the Government is doing to Social Security recipients

A step by step review by H. Michael Sweeney
copyright © 2011, H. Michael Sweeney, Proparanoid Press, All Rights Reserved
permissions to reproduce by request to pppbooks at comcast (net)
Dateline, Portland, OR, Aug 22, 2011

Social Security

Introduction and background, what people THINK they know.

Bernie Madoff 2009 Mug Shot

Bernie Madoff was a con man pretending to be an investment broker handling a fake securities portfolio investment fund. You may remember him in the news… being trotted off to jail for bilking more than $50,000,000,000 ($50B) from investors in the biggest Ponzi scheme, ever (short of the Federal Reserve). Very convenient at the time, because it took our attention away from the trillion dollar bailout of the banks (but not the victims) of the Mortgage Crunch. We needed time to cool down before someone started shooting bankers and Congressmen, so they fed us Uncle Bernie.

The list of victims form a veritable who’s who of financial powerhouses, and well known persons of fame, wealth, and power. In fact, a map of his victims obliterates some states with markers (zoom out to see the whole map). There is even an entertaining slide show to illustrate, and for a very good review of the entire affair and some revealing personal images of Madoff’s life at home, at work, and at play, there is a blog devoted to all things about Madoff. 

Social Security

How does it work? Wearing a mask of wealth and playing on contacts among the wealthy, he quickly convinced monied players to invest in his funds which he claimed were paying off higher returns than any other. In a Ponzi scheme (named after the inventor of the fraudulant scam, Charles Ponzi), you use money invested to pay ‘dividends’ or profits on the investment commensurate with an unusually high profitability. Based on the notion of greed, this prompts further investment by the players and new investments from others who learn about the ‘wonderful performance.’ Interesting side note: It was almost exactly 100 years between the first by Ponzi and the greatest by Uncle Bernie: 1910 and 2009.

Charles Ponzi 1910 Mug Shot

In a Ponzi, the ‘broker’ skims off the top to make themselves wealthy, which is part of their cover of ‘successful businessman,’ and they turn the rest into ‘payouts’ and other efforts useful in recruiting more investors. If they do it right, they can even open storefront offices and hire actual brokers to sell the investments as a ‘legitimate corporation.’ The staff can earn handsome commissions and are (usually) never the wiser, unless fellow criminals. With enough ‘prestige’ and a good track record, such shops can even get other investment firms to invest.

That was Madoff. What most people do not know is that many of the big banks and other financial institutions knew it was a fraud and failed to warn anyone… because they were too busy making profits handling the money in Madoff’s accounts, and in other ways, too. Heck, they even had a way to make a profit after the scheme eventually went bust (as all Ponzi schemes must, in time, for they are pyramid schemes and will eventually become too top heavy to support themselves financially).

What about Social Security? The Social Security Act of 1935 was supposed to help prevent the kind of personal disasters which resulted from the Great Depression, where banks collapsed and people lost their life’s savings. Too, many people had no such savings, unable or unwilling to do so. SS was a means of formalizing a required ‘retirement fund’ for payroll recipients that would be safe from any unexpected financial catastrophe.

It was modified by the The Social Security act of 1965 to incorporate Medicare and Medicaid provisions to insure adequate medical care regardless of financial circumstances. This is what we know as ‘Social Security’ today. It is NOT socialism despite the title’s implication. Workers contribute a portion of their wages (their money) and copayments by the employer (their money) into the fund for eventual payout at retirement. Additional monies were to accrue to the fund through investments, just like some forms of life insurance policies, so that payouts could exceed payments to the fund and better cover the cost of retirement. In essence, it was a federally mandated and managed investment program that was intended to assure every American saved money for their retirement.

OK, so it's really Christina Speck and NOT my Mother!

That was Social Security as it was defined, and what many people believe it to be… unless their understanding has been twisted by the rhetoric of those who want to cut Social Security as if it was some kind of welfare program. There is a need in certain quarters to have you believe that tax money is used to pay for Medicare, Medicaid, and Social Security checks. Liars. There is a need that you believe that by cutting these payments the Nation’s financial woes will be bettered. Well, in the balance statements, perhaps, but not really. Even they believe the lies. Social Security is not socialism, but cutting SS could be said to be reverse socialism; giving money to the rich by taking money from those who need it most.

Worse, it has the potential of creating tens of millions of people who, in order to survive, must turn to a life of crime or truly obtain welfare support, which they also want to cut and/or eliminate. I can see it now. Weekly reports of bank robberies by geriatrics in wheelchairs laden with explosives. Little Old ladies sticking up gas stations with sharpened umbrellas. Seriously, if they do these sorts of things (and many of them are military Veterans of combat and are armed to the teeth), I hope it is the Federal Reserve they rob, because that’s where their money is. It’s my money in the local bank…  er… come to think of it, the money in my bank (all $200) is from Social Security, so maybe I should consider joining the Ma and Pa Kettle Gang, myself. But I’m too old and weak to handle my .30 cal.

Which brings us, reluctantly, to the reality of the present day…

Social security

Time to compare Ponzi and Social Security step by step.

Compare the Promises, the ‘Public Image’ as seen from the outside: 

The Madoff Ponzi                                                                              Congress’ Social Security                  

1.   Madoff establishes a fake management company and fund               Congress establishes the Social Security trust fund managed by government

2.   Investors pay into the fund in hopes of making profits                        Workes pay into the trust fund in hopes of a decent retirement

3.   Madoff assures investors their fund will grow with interest                Congress assures workers their fund will grow with interest

4.   Management company pays investor dividends quarterly                 Government pays retiree SS checks monthly

5.   Everyone seems happy                                                                                    Everyone seems happy

Social Security

What was really happening under the Hood

6.   Madoff collects huge sums of money                                                          The government collects huge sums of money

7.   Instead of investing money, Madoff buys expensive things                Instead of depositing money, government borrows it for expensive things

8.   Madoff promised to pay back the invested money                                Congress promised to pay back the borrowed money

9.   Money to pay prior investors skimmed from new investors               Money to pay retiremees comes from payments by younger workers

10. Banks and other financial institutions profit along the way               The Military Industrial Complex constituents profit along the way

11. Pyramid strains, income starts to fail obligations                                   Like a pyramid scheme, income eventually does not meet obligations

12. Investor payments decline and they start to grumble                          Social Security payments are cut and people start to grumble

13. Banks profited by Madoff’s cash flow to date                                           Banks get bailout money the government could have paid back to SS

14. Madoff defaults on his promis to pay back and hides                            Congress defaults on the borrowed money and hides the truth

Emphasise: Congress hides the fact that THEY borrowed and DID NOT REPAY the money that BELONGS TO THE RETIREES, and instead tries to paint it as an entitlement under a socialist program equated with welfare which rightly needs to be cut to ‘help save the country’, or we need to raise taxes (giving us the choice of being shot in the ass or shot in the head).

Social Security

There is only ONE difference between Maddoff and Social Security

15.  Madoff went to jail                                                                                           Congressment get fat medical and retirement benefits

                                                                                                                                      (ON TOP of Social Security, Medicare, and Medicaid, if it is still around)

Oh, and one small technical difference. Madoff couldn’t pay investors because he was no longer liquid. His money was in real estate, jewelry, cars, etc.

Government does not WANT to pay SS recipients back. They COULD, by simply printing more money, which we know they can do because that’s exactly what they did to bail out the Bankers. In fact, they printed more of it than it would take to bail out SS. So that leaves me with just one question. Why on God’s green Earth would YOU allow them to make that kind of decision about you and your families (bleak) retirement future?

About Author H. Michael Sweeney

Author of privacy/security/abuse of power, Founder Free Will Society, PALADINs (Post Apocalyptic Local Area Defense Information Network)

Posted on August 22, 2011, in Abuse of Power, Conspiracy, News Events, People, Political Commentary and tagged , , , , , , . Bookmark the permalink. Leave a comment.

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