American Ponzi

Ponzi Scheme - A Ponzi scheme is a fraudulent investment operation that pays returns to its investors by using the investors' own money or the money paid in by subsequent investors. There is no legitimate business operation or any actual profit earned by the individual or organization running the operation.

Ponzi Schemes are often uncovered and/or collapse when there are not enough new investors or existing investments to pay returns to the investors (Bernie Madoff was discovered this way).

Question: What is the difference between a Ponzi scheme and the Social Security System of the United States of America?

Question: Is the downgrade of US bonds from AAA to AA+ an indication of increasing doubt that the US Government has enough investments to pay returns to its investors?

Question: If the external debt of the USA is $13.98 trillion (as of June 30, 2010), and the US GDP is $14.66 trillion (2010 est.), is that not proof that there is not enough money in this entire country to pay returns to investors? (ref. CIA world factbook)

The big question: What happens when the global economy is heavily invested in a Ponzi scheme that collapses?

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