December 27, 2017 Finance 0

Let’s start off with a definition.  What is exactly is a ponzi scheme?

There’s wikipedia  definition.  In a nutshell newer investors are required to continually payoff the existing investors.  When(not if) this fails everybody looses.  Many government programs are variations of this….most pension funds are variations of this as well as the ACA.  Right now according to this article on cnsnews the Social Security trustees have been warning that there is not enough money to cover the payouts.  In this case right now the ponzi is working..there are 2.x workers for each recipient…until the gov’t went in and spent any surpluses for other programs.

The ACA is an example of the program failing from the start.  The ACA depends on healthy folks signing up to provide the funding for sicker people who sign up.  However that has not happened…why would a healthy person sign up if they do not need it?  They didn’t.  Some folks(like myself) could not afford the premiums at all….and the penalties are crushing.  The penalties do not cover the entire cost of not carrying insurance though and the penalties get to the point that not event he super rich could afford to pay them.  At this point either you ahve to let the folks off he hook or you jail everyone….good luck.

The gov’t continues to tax in record tax revenue but cannot balance it’s books.  We do not have a taxation problem..we have a spending problem.  Unfortunately until the electorate stops demanding these free lunches it is only going to get worse.