Friday, Nov. 16, 2012 | 2 a.m.
Regarding the Oct. 26 letter from Janice Herr: She stated that Social Security is an insurance program and not a Ponzi scheme because it is named Federal Insurance Contributions Act with no guarantee of a payback. I do not agree, so let us compare.
Purchasing insurance is a voluntary decision made by the person seeking coverage from which, as Herr says, “you may not get a dime back.”
Contributions to Social Security are mandatory with the expectation of payback upon retirement. And, typical of Ponzi schemes, more recent contributions are used to pay earlier contributors with no guarantee as to the safety of principal.
While Social Security is not, in the strictest sense, a Ponzi scheme, it is more Ponzi-like than insurance. Let’s hope that proper management will allow future participants to realize some security in the return it promises.