Is welfare a Ponzi scheme? Ctd

I have blogged previously about Welfare essentially being a ponzi scheme. There are more and more people discussing this, both?left and?right. Don Boudreaux looks at some measurements for determining whether or not welfare is a Ponzi scheme:

What is that essence?? I submit the essence of a Ponzi scheme is

(1) its promise that contributions today to the scheme?s manager will pay off handsomely (that is, better than alternative investments) in the future to each contributor;

(2) that current contributions to the scheme are not invested but are spent ? in particular, are spent to make good on promises made in the past to previous contributors who now expect their stream of pay-offs;

(3) that the manager of the scheme maintains his ability to pay the promised streams of pay-offs only by getting other contributors into the scheme, but

(4) the manager doesn?t let on to contributors (and would-be contributors) that the funds for paying off the promises come not from any profitable, productive investment of contributed funds ? nor from any actuarially justified program for reallocating risks across persons or across time ? but come, instead, simply from the hope that future contributors can be corralled into the system;

(5) that if future contributors do not arrive in sufficient numbers, the scheme has too little money on hand to pay off all promises;

(6) that the manager of the scheme, in short, successfully persuades his or her targets that the scheme is financially something that it really is not.

Note that I do not list ?pyramiding? ? a ?pyramid scheme? ? as being among the essential qualities of a Ponzi scheme.

On these points, Social Security strikes me (again, as it has struck even some of its illustrious champions) of having a great deal of Ponzi-ness about it.

It seems to me also that welfare, in particular superannuation is clearly a Ponzi scheme. Discuss.

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