U.S. Government Ponzi Scheme

Is Bernard Madoff Running the Federal Government?

AIM Column | By Cliff Kincaid | December 18, 2008

In terms of the financial “rescue” package, Bloomberg’s latest estimate is that the cost has reached a staggering $7.7 trillion.

Peter Schiff of Euro Pacific Capital points out that “The Social Security Administration runs its ‘trust funds’ with precisely the same methods used by Madoff and Ponzi. As money is collected from current workers, the funds are then dispersed to those already receiving benefits. None of the funds collected are actually invested, so no investment returns are ever generated. Those currently paying into the system are expected to receive their returns based on the ‘contribution’ made by future workers.”

He adds, “The United States Government runs its own balance sheet based on the Ponzi principal as well. Our national debt always grows and never shrinks. As existing debt matures, proceeds are repaid by issuing new debt. Interest payments on existing debt are also made by selling new debt to investors. The whole scheme depends on an ever growing supply of new lenders, or the willingness of existing lenders, to continue to roll over maturing notes. Of course, as was the case with Madoff, if enough of our creditors want their money back, the music stops playing.”

In terms of the financial “rescue” package, Bloomberg’s latest estimate is that the cost has reached a staggering $7.7 trillion.

A more recent estimate, provided in a Politico.com story by Jeanne Cummings, is $8.7 trillion. She reported, “According to Bianco Research President James Bianco, who crunched these numbers, that amounts to more government aid and assistance than nine other historic bailouts and big government outlays combined.”