Tuesday, September 15, 2015

Draft Kings isn't taking my money against my will

Somebody in Congress wants to regulate fantasy football betting sites.  Yeah, OK, but I agree with this guy:
How about Frank Pallone look into why Social Security is scheduled to go bust in a 15 years? As someone who involuntarily pays into this Ponzi scheme, shouldn't these hacks be concerned with that? As for fantasy sports, people willingly pay into that and understand the consequences.

We don't need Frank Pallone or any of these other losers wasting taxpayer money on 'reviewing' policies they created and aren't broken. Social Security is broken. Fix that for starters, you hacks.
It'll never happen.


None of these things is just like the other said...

I went out to my driveway this morning, but the car battery was dead. Stupid Ponzi scheme car battery.

After taking the bus to work, my Ponzi scheme boss yelled at me for being late. Afterwards it began raining at quitting time, and I got all Ponzi scheme wet. What a Ponzi scheme of a day!

Eric said...

That's a comment. Lucidity not included.

siacd999 said...

Someone's mad because you might get a better return on Draft Kings than with Social Security. And unlike SS, you're not required by threat of law to pay into it. Question is, will Chicago tax Draft Kings/Fan Duel with 9% tax they charge for Netflix/Hulu because it takes tax revenue from local Chicago bookies?

None of these things is just like the other said...

Lucidity not included.

As opposed to the mental clarity of comparing three things that couldn't be more alike in form and purpose: Social Security, Ponzi schemes, and online football drafting.

Jody said...

Ponzi scheme - a fraudulent investment operation where the operator, an individual or organization, pays returns to its investors from new capital paid to the operators by new investors, rather than from profit earned by the operator.


Social Security pays its "investors" from what now?

Anonymous said...

Why... they pay people using money that appears out of thin air, just like all government programs. Only fools believe that the money comes from hard working Americans with jobs who pay taxes. No sane person would spend the best year's of their lives working hard, only to give away the fruits of their labor to those who don't work.

Ida M. Fuller said...

Social Security is a classic Ponzi scheme, except that no one is being misled. And its formula is transparent. And it’s not unsustainable. And its fiscal trajectory can and has been altered. And it’s not optional. And its investors aren’t being promised or paid riches out of proportion to their investment. And its fundamental premise is the moral opposite of a Ponzi scheme.

Those minor discrepancies aside, it’s the perfect analogy.

Anonymous said...

[Social Security's] fundamental premise is the moral opposite of a Ponzi scheme...

Let's see - in a Ponzi scheme, the moral premise is that the entity running it re-purposes most of the money coming in to serve its own interests, while assuring investors that their money is being safely held, is growing, and will be returned to them. The necessary payouts from the scheme have to come, of course, from new investors' money. How does this differ from Social Security in practical terms, or morally?

Social Security is what Charles Ponzi or Bernard Madoff would have created if they could have used the threat of violence to force everyone to participate.

Anonymous said...

The truest sign of a Ponzi scheme is that they run for a century, while promising and paying very modest returns. It's the ultimate long con!

Eric said...

At the genesis of SS, there were 16 contributors to every beneficiary. Those at the start made out like bandits. Ida May Fuller, for example, collected $22K in benefits after contributing $24. But now there are three taxpayers for every beneficiary (soon to be 2) and lifetime returns for these later entrants are lower. The suckers - I mean taxpayers - paying into the system now will never get back what they paid into the system.

So the dwindling number of people paying into the system means it will be a terrible deal for later entrants. Nothing like a Ponzi scheme.

Ida M. Fuller said...

The "16 contributors to every beneficiary" stat gets trotted out all the time, and I mean all the time. It's far less common for critics to add that the reason for this is obvious: because the Social Security program was still new. Anyone over the age of 45 when the law was passed could get a sweet deal. Time/math shocker!

Within ten years of the 16:1 statistic, the ratio of contributors to payees was already down to 5:1. That was 55 years ago.

By 1975, it was 3.2 to one. That was 40 years ago.

In 1985, and in 1995, and in 2005, the ratio was 3.3 to one. What a plunge.

Social Security's precipitous drop in ratio from the ever-popular 16:1 was purely a function of having a start date. The terrifying freefall to insolvency was levelling off when the Beatles were singing "Yeah, yeah, yeah."

There is a real dip coming. The payer/payee ratio will soon have its first meaningful drop in almost half a century, as the surviving Baby Boomers keep moving into the picture. After that, the ratio will rise and level off, as the lower, stable birth rates from the late 1960s to present join, then supplant the Boomers. But saying that we'll have to deal with the upcoming crunch of the ratio dropping by 0.8 contributors per payee for twenty-five years, that'll never be as much fun as saying "16 to one," or "end this fraud."

Charles Ponzi's scheme lasted seven months.

Eric said...

Your laser-like focus on the worker ratio doesn't refute my original point that the Ponzi-like structure of Social Security helped early entrants and punished later suckers.

"A couple who each earned the average wage during their careers and retired in 1990 would have paid $316,000 in Social Security taxes, but collected $436,000 in benefits, according to data crunched by Eugene Steuerle, an economist at the Urban Institute.
Had that couple turned 65 in 2010, however, they would have paid $600,000 in taxes, but could expect to collect just $579,000. This is the first time in the program's history that taxes outweighed benefits for this group, a couple with average earnings.
The imbalance will get more pronounced for future generations of retirees. Couples now in their early 40s will have forked over $808,000 in Social Security taxes by the time they retire, but get back only $703,000 in benefits."

Needless to say, retirees before 1990 did much better and retirees after 2035 will do much, much, much worse.