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Social Security, National Ponzi Scheme

While Madoff is freshly implanted in the news for the second largest Ponzi scheme in the nation’s history. You thought it was the largest ever.  Put to the test, I have to agree with Walter Williams, that today’s Social Security System is the largest Ponzi scheme in America.

We have a decreasing number of workers contributing to an increasing number of recipients. Time will come in the near future that the program runs out of money. And this will happen unless something dramatic happens in Washington. Another problem that won’t go away.

The U.S. Securities and Exchange Commission (SEC) was set up to combat fraudulent practices. The SEC’s website explains that “Ponzi schemes are a type of illegal pyramid scheme named for Charles Ponzi, who duped thousands of New England residents into investing in a postage stamp speculation scheme back in the 1920s.” It goes on to say, “Decades later, the Ponzi scheme continues to work on the ‘rob-Peter-to-pay-Paul’ principle, as money from new investors is used to pay off earlier investors until the whole scheme collapses.” That is how the SEC described the recent Bernard Madoff $50 billion Ponzi scheme, “a stunning fraud that appears to be of epic proportions.”

A Ponzi scheme does not generate any wealth whatsoever; that is why it ultimately collapses. As Circuit Judge Anderson said in the 1922 Lowell v. Brown case, the Ponzi scheme was “simply the old fraud of paying the earlier comers out of the contributions of the later comers.” So long as the number of late comers — you might call them suckers — grows, the fraudulent scheme has life.

We have a national Ponzi scheme where Congress collects about $785 billion in Social Security taxes from about 163 million workers to send out $585 billion to 50 million Social Security recipients. Social Security’s trustees tell us that the surplus goes into a $2.2 trillion trust fund to meet future obligations. The problem is whatever difference between Social Security taxes and benefits paid out is spent by Congress. What the Treasury Department does is give the Social Security Trust Fund non-marketable “special issue government securities” that are simply bookkeeping entries that are IOUs.

According to Social Security trustee estimates, around 2016 the amount of Social Security benefits paid will exceed taxes collected. That means one of two things, or both, must happen: Congress will raise taxes and/or slash promised Social Security benefits. Each year the situation will get worse since the number of retirees is predicted to increase relative to the number in the workforce paying taxes. In 1940, there were 42 workers per retiree, in 1950 there were 16, today there are 3 and in 20 or 30 years there will be 2 or fewer workers per retiree.

Social Security is unsustainable because it is not meeting the first order condition of a Ponzi scheme, namely expanding the pool of suckers. Social Security has been one congressional lie after another since its inception. Here’s what a 1936 Social Security pamphlet said: “After the first 3 years — that is to say, beginning in 1940 — you will pay, and your employer will pay, 1.5 cents for each dollar you earn, up to $3,000 a year … beginning in 1943, you will pay 2 cents, and so will your employer, for every dollar you earn for the next 3 years. … And finally, beginning in 1949, twelve years from now, you and your employer will each pay 3 cents on each dollar you earn, up to $3,000 a year. That is the most you will ever pay.” The pamphlet also said, “Beginning November 24, 1936, the United States government will set up a Social Security account for you. … The checks will come to you as a right.”

That’s another lie. In .Flemming vs Nestor (1960), the U.S. Supreme court held that you have no “accrued property rights” to a Social Security check. That means Congress can do anything it wishes with Social Security. There is little or nothing that can be done to prevent the economic and political chaos that will result from the collapse of Social Security.

Today’s recipients of Social Security, along with their powerful AARP lobby, represent a powerful political force. Few politicians are willing to risk their careers alienating today’s senior citizens for the benefit of Americans in 2040. After all what do today’s seniors and politicians care about a 2040 calamity? They will be dead by then.

Born in Philadelphia in 1936, Walter E. Williams holds a bachelor’s degree in economics from California State University (1965) and a master’s degree (1967) and doctorate (1972) in economics from the University of California at Los Angeles.

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Colombo the Asbestos Sleuth

Judge exposes phony claims in asbestos lawsuits

Good legal news for a change: The courts keep making progress against phony asbestos lawsuits, this time in Michigan, by Wayne County Circuit Court Judge Robert Colombo, Jr.

Judge Colombo disqualified Michael Kelly, a physician who had diagnosed people in 7,300 cases with asbestos-related disease, from a case  on dubious grounds.

More than 90% of the lung function tests Dr. Kelly performed failed to meet basic standards. The defendants also showed that Dr. Kelly submitted nearly identical reports for every patient he saw, yet he failed to note that some of his patients also had heart disease or renal failure. Asbestos attorneys apparently don’t pay for doctors to observe the Hippocratic Oath.

endofstoryTexas death row inmate pulls out eye, eats it

Hard to believe someone could do that. Except that this guy pulled out his other eye four years ago.Death Row Eye

A Texas death row inmate with a history of mental problems pulled out his only good eye and told authorities he ate it. Andre Thomas, 25, was arrested for the fatal stabbings of his estranged wife, their young son and her 13-month-old daughter in March 2004. Their hearts also had been ripped out. He was convicted and condemned for the infant’s death.

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Here’s one for the ‘you gotta be kidding’ column. A police officer steals marijuana, bakes some special brownies then calls 911 and says “I think we are dying”.

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video: The end of civilization?

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video: A day at the races.

Warning: colorful language including the F bomb but funny nonetheless.

New Right-To-Carry Rules In Effect

According to this press release from the NRA, persons with concealed weapons permits will now be permitted to carry in Federal parks and wildlife refuges. Small victory for freedom and the Second Amendment.

The new rule, which takes effect today, allows Right-to-Carry permit holders to carry concealed firearms in national parks and wildlife refuges in states that recognize their permits. The new rule will also put an end to the patchwork of regulations that governed different lands managed by different federal agencies. In the past, Bureau of Land Management and Forest Service lands allowed the carrying of firearms, while lands managed by DOI did not.

As expected, the Brady bunch has already filed a lawsuit of hysterical proportions against it.

Not surprisingly, the first to jump on the “banned” wagon was the anti-gun Brady Campaign, in a lawsuit filed against the DOI in federal court, seeking to have the new rule struck down. The National Parks Conservation Association and the Coalition of National Park Service Retirees have also filed a similar suit.

Brady contends that people have a right to visit parks without fear of permit-holders carrying guns. The contention is ludicrous, of course, since to get to a park requires people to travel through places where permit-holders abound, without posing any threat whatsoever.

If there really are people who walk around in fear that some idiot is going to pull out a gun and shoot them, then they should think twice before entering a so-called ‘gun-free’ zone, where only the criminals will be armed. Under extraordinary circumstances, a law abiding citizen lawfully carrying a concealed weapon for self-protection could save your life too. In this case, the fear that the Brady Campaign harbors is misplaced.

link: New Rules On Right-To-Carry In Our National Parks Take Effect Today

related: NW Florida residents can get information about obtaining a concealed weapons permit at one of many gun shows in the state and around the country. They are not the only source, but are the most convenient. The next one in Pensacola is Feb. 7-8, 2009 at the Interstate Fairgrounds. FAQ

Martha Stewart Does Cheesesteak A-B Test

Much more than a food critic, but no doubt a food expert in one sense or another, Martha Stewart is ambushed into a cheesesteak A-B test of cheesesteaks from Pat’s and Geno’s in Philly. The video makes it look like an ambush.


Too bad it was such a limited sample. I could suggest a ‘C’ to that comparison, but I would be totally prejudiced by suggesting one from Philly’s.

It's Over

Well, whatever it was that cause The Lunch Counter to not load for the last 24 hours has gone. My apologies to those who tried and got a 500 error. Sometimes I think that Network Solutions has issues with WordPress. At any rate, things seem to be back to normal now. Catch up now and see the stocking stuffers offered by Planned Parenthood and William Jefferson (D-LA) losing his re-election to his Loisiana District 2 seat the House.

Stocking Stuffers From Planned Parenthood

Oh the sign of the times. ‘Takes the worry out of being close.’ That was the sales pitch for an underarm deodorant in the 60’s, Ban. Things have changed a little since then. Now, Planned Parenthood has a gift giving idea designed for women only.

Hello, I’m Jane, I think I’m pregnant. This just is not be acceptable for the captain of the cheerleaders, so I want to use my abortion gift certificate. Thank you very much.

The 2008 version of the slogan is now, ‘Planned Parenthood, it takes the worry, and responsibility, out of being close.’

In this video, Rush Limbaugh comments on this sign of the times in a way that only Rush can.

link: Planned Parenthood offering gift certificates

It's The Free-Market Stupid, Not The GOP

Most pundits on the far left, like self-described journalist Mike Papantonio, are really stretching the facts (like a slip and fall lawyer would) when he tries to whitewash the UAW’s role and its impact on the Big 3 automakers by saying that the GOP has always hated unions and that’s why, he asserts, they don’t want to bail out the Big 3. And he does this by saying that AIG, Freddy Mac, Fannie Mae are not unionized and they’re getting bailed out. Actually, none of them should be bailed out with taxpayer money. It was government intervention that put them in that position. The best thing the government can do now is to quit meddling with the free-market economy and let the market determine who wins and who loses.

So here’s my response to Mike Papantonio. AIG and the rest of Wall Street, they’re not unionized and they are failing. You say the Big 3 are failing too, but it’s not because of unions because Wall Street isn’t unionized? Nice try Mike.

I’ll tell you, Mike the journalist, what ALL of these failures have in common, in just two words. Government intervention. Intervention in a free-market economy. And there is one more commonality among all of them Mike, they are joined at the hip with Democrat lawmakers from the CRA to the UAW. That’s what they all have in common. That’s why all of them are in trouble. The Big 3 are unique however because they are unionized. For them, their problem is compounded because of the UAW and the agreements that the incompetent CEO’s signed on to. Granted it isn’t the only reason, the Big 3 have other problems as well, but it is the difference from operating in the red, or the black.

Their incompetence is echoed in their ‘plan’ before congress right now. Their plan includes the same cash-draining contracts that keep them from being competitive with the non-union automakers in the South. Because of that, they deserve and have earned the right to go bankrupt.

Reorganize, unload the union weight, be competitive, and prosper. And if it means going from Big 3 to Big 2, so be it. In a free market environment, the fittest will survive without putting taxpayers trillions and trillions of dollars into debt.

Bio: Mike Papantonio hosts a nationally syndicated radio show, the Ring of Fire, on Air America Radio and is the founder of GoLeft.tv. He is a partner in the Levin Papantonio law firm in Pensacola.

related links: GOP Blames Unions for Detroit’s Ills | What Caused The Economic Crisis?

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Man Faces Battery Charges for Hitting Girlfriend With Sandwich

Police said the 19-year-old man became angry and hit the woman in the arm and face with a sandwich, knocking her glasses off, as she was driving along Interstate 95 on Friday.

One can only hope that a cheesesteak was not involved.

NBC’s Rosie O’Donnell variety show disappoints

Rosie O’Donnell tied for last place. Surely she could do better than that and capture last place on her own. Good for (9/11 was an inside job) her.

“There’s a notion that the climate is right for the genre to make a comeback,” emailed one executive at a rival network. “I guess we now know what not to do, thanks to Rosie.”

The climate may be right for that genre of TV. As long as it doesn’t include Rosie.

Christian ‘the lion’ Reunion, London Lion reunited in Africa

This video has been seen by millions and millions of people already, but I just saw it a few days ago on Yahoo. It’s a touching story that takes about two minutes.

It’s about a couple that raised a lion cub for about a year. They introduced it into the wild after he got too big. They went back a year later to see if they could find him. And they did.

Try it, you’ll like it.

Here’s a longer version, with more video and pictures. Same wonderful story.