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Letter to the Editor ¦ March 13, 1998
Ponzi Wouldn't Bother With Social Security

By David Langer

In his Feb. 23 Letter to the Editor replying to mine of Feb. 11, John McManus states that in the absence of Social Security parents could have accumulated more money toward retirement, thereby reducing their need to lean on their working children for support. This is an overly optimistic speculation, given all that can make this intent difficult to implement. In any event, Social Security has been with us now for more than 60 years, and the children can rest easy with the assurance that their parents will receive a federally insured lifetime benefit, including annual cost of living adjustments, which reduces if not eliminates the children's financial responsibilities.

As to Social Security being a Ponzi scheme, Mr. McManus should note that while Ponzi intended himself to be the principal beneficiary of his swindle, there are now 43 million Social Security beneficiaries receiving an average of about $675 a month, and no one has become rich on it. This makes it a highly effective social insurance program and not a Ponzi scheme.

- David Langer, a consulting actuary and president of David Langer Co., Inc.
New York


References:
World's Biggest Ponzi Scheme ¦ Letter by John McManus, The Wall Street Journal, February 23, 1998

Double-Income, Four Parents ¦ Letter by David Langer, The Wall Street Journal, February 11, 1998


© 2001 DAVID LANGER COMPANY, INC.