Former Nasdaq chairman Bernard Madoff was charged by the Securities and Exchange Commission with what it falsely called the largest Ponzi scheme in history.
Although he purportedly defrauded investors of as much as $50 billion, Madoff's scheme pales in comparison to the one run by our own federal government. Social Security is a Ponzi scheme, pure and simple. The money today's recipients receive comes directly from contributions of the current work force.
It's time for Americans to awaken to the fact that unless there is a fundamental change in the system we are headed for a financial catastrophe. The reason the necessary changes have not been implemented is that to do so is political suicide. We have been falsely led to believe that because of corporate greed a privatized system will not work.
Americans would be wise to learn from the example of our South American neighbor, Chile. Chile was once faced with the problem of a bankrupt pay-as-you-go system much like ours. Fortunately for the citizens of that country, their government gave workers the option to place their money in individual retirement accounts. The outcome: 93 percent of Chilean workers opted to participate in the privatized plan.
The rate of savings in that country has gone from 10 percent to 27 percent, and the rate of growth of Chile's GNP has doubled.
Making the transition to a similar system will not be easy, but it is the only way to provide a sustainable retirement plan for our citizens.