Dear Editor:
In the early 1900s, a rogue named Ponzi developed a scheme to defraud the gullible and to make himself rich.
It was so simple, yet unique, in its execution, that the process was named after him and called the Ponzi scheme.
He induced investors to place their money with him with the guarantee that there would be quick and significant returns. Sure enough, within a month, he was returning dividends hugely disproportionate to the investment.
The first lucky investors, enthused with their investment, both invested more and induced countless others to invest in like manner. Of course, they did not know that the later payments came from the earlier investors. Ultimately the scheme had to fail! Ponzi’s empire collapsed, but not before making him a rich man. He then took flight to Europe where he lived a very lavish life style.
SEC, later created, abolished such schemes except by government agencies. Subsequently, in a fraudulent manner, President Roosevelt created the Federal Insurance Contributions Act which we refer to as Social Security. It works now principally as follows:
1. Just invest a 12.4 percent share of your paycheck (half is from the employer), and it will be sent to a retiree whose name is at the top of the list;
2. Next, upon his/her death, the government crosses off the top name, adds yours to the bottom;
3. Your name then crawls to the top of the list (of course, 80 percent of you will be dead before your name reaches the top of the list);
4. Then you just sit back and wait for your social security in retirement years to roll in.
I waited through steps 1 to 3, and now am at step 4. I guess I have nothing to complain about; I’ve been collecting for 10 years now. What’s all the fuss about?
Who says this Ponzi scheme doesn’t work?
Frank X. Landrigan