Comments on: Of Ponzi Schemes and Social Security

By: David W. Boles

David W. Boles — Mon, 15 Dec 2008 22:48:25 +0000

Nicola –
We have the same sort of terrible system here. If you lived day-to-day and enjoyed every penny you earned, you’re fine. The system will take care of you. If, however, you saved and accumulated wealth, you have to “spend it all” first before the system will kick in, so if you have kids or someone you want to have your money, you can’t do anything with it except pay your long-term healthcare bills until you’re penniless.
There are heartbreaking stories about couples married 50 years divorcing in order to “impoverish” the one in need of long-term critical care so the system they paid into will actually pay without raiding bank and savings accounts. It’s inhuman and cruel and it’s the way of the elderly now in the USA.

By: Nicola Brown

Nicola Brown — Mon, 15 Dec 2008 22:37:35 +0000

I find it frightening that they can pay fast and loose with all our hard earned money. They are already talking about how much pensions have been devalued by this and how it will affect the large institutions who had bought into this scheme.
Todays pensioners have been robbed – several times.
They have been robbed of their social care they paid and bought into all their lives. If they have assets of over £16000 they have to pay all their care costs. Residential care costs between £500 and £2500 a week depending on what care you need.
They were robbed when the Chancellor raided pension funds and changed the rules about 5 years ago.
They were robbed when they lost tax relief on their pension contributions – meaning it cost more to maintain their expected pension.
They have been robbed again by these irresponsible bankers playing fast and loose with their money.

By: David W. Boles

David W. Boles — Sun, 14 Dec 2008 18:13:18 +0000

It’s going to be a total meltdown, Nicola.
Here’s an intimately detailed piece on the end of “Wall Street.”
I’d never taken an accounting course, never run a business, never even had savings of my own to manage. I stumbled into a job at Salomon Brothers in 1985 and stumbled out much richer three years later, and even though I wrote a book about the experience, the whole thing still strikes me as preposterous—which is one of the reasons the money was so easy to walk away from. I figured the situation was unsustainable. Sooner rather than later, someone was going to identify me, along with a lot of people more or less like me, as a fraud. Sooner rather than later, there would come a Great Reckoning when Wall Street would wake up and hundreds if not thousands of young people like me, who had no business making huge bets with other people’s money, would be expelled from finance.
http://www.portfolio.com/news-markets/national-news/portfolio/2008/11/11/The-End-of-Wall-Streets-Boom
People in their 30′s are now pretty much resigned to the fact that they will never be able to retire like their parents at 65. They’ll have to work until they die to pay the bills.
Many retirees right now have lost half of their life savings with no way to repair the damage. All that suffering and self-denial of the new and pretty things in favor of saving money and investing is now all for naught.

By: Nicola Brown

Nicola Brown — Sun, 14 Dec 2008 17:22:47 +0000

They have been talking about the knock on effects of this on the UK markets which are already taking a battering.
Do you think in years to come this will be known as the “hedge fund bubble” or the “sub prime bubble”?
We have the same issues over here with Social Security with people like my parents who paid National Insurance all their lives being denied care when they needed it most.