By Jeffrey King
Easily one of the most reviled men in the world, Bernard Madoff currently rots in solitude, separated from society until he draws his final breath. His very name embodies the abhorrent legacy of the few who have exploited many honest Americans for their own personal gain.
While the exact figure of Madoff’s scheme remains elusive to this day, government prosecutors involved in the case project the number to be in the neighborhood of $50 billion. Overnight, hundreds, if not thousands, of trusting investors saw their life savings and retirement vanish without any hope of ever seeing a nickel.
The methodology Madoff used to accrue his staggering ill-gotten gains can be simply defined as a Ponzi scheme. Named after the original schemer Charles Ponzi at the turn of the 20th century, the financial ploy pays fake returns to initial investors from investments of subsequent investors, whereby the financial institution does not actually have the capital to pay all investors involved, including interest (supposedly accumulated by all who invested with the individual/institution in question).
The hierarchal structure of the fraud can easily be demonstrated visually by a pyramid, to which it is also referred. In the end, those at the bottom of the pyramid always lose out. There is absolutely nothing moral to what Bernie did as our laws dictate.
So how can anyone possibly argue that Mr. Madoff should rejoin free society? After all, he broke basic regulatory laws put in place to stop this outright fraud. To date, his con represents the largest Ponzi scheme of all time, right?
Sadly, the answer is a resounding “no.” The most massive Ponzi scheme in history, which continues today, is one all Americans are a part of: the $50 trillion in unfunded liabilities Uncle Sam currently holds.
For decades, the federal government has promised payouts under the pretext of Social Security and Medicare for which future taxpayers will be left to pay. We are told by the federal government that our tax dollars are funneled into government-run “investment accounts,” like Social Security, where our money sits and collects interest, akin to savings in an individual’s personal bank account. In the future, we the taxpayers will enjoy the initial investment and its returns, as the federal government is contractually obligated.
The only issue is that the money the federal government was saving for you and me is gone, replaced by staggering debt in the form of IOUs. The younger taxpayers, now at the bottom of the pyramid, are left to pay for those at the top, mirroring Madoff’s grand ploy. Social Security is just one federal institution among several others that share the same predicament.
With the further expansion of government into areas such as healthcare, the housing industry, and even the banking system, the federal Ponzi scheme will only grow larger.
So if Bernie couldn’t get away with it, how can the federal government freely execute that very same conspiracy and continue with immunity? Essentially, the American public receiving benefits under these social programs are passing the bill onto the future generations.
The issue is not political, but fundamental. We as the collective American citizenry are only imprisoning ourselves, rather enslaving each other by passing the bill onto our future generations. No institution, whether private or public, can sustain a mantra of “robbing Peter to pay Paul.”
The very hypocritical nature of this circumstance leads us with two possible solutions: exonerate Bernie and other convicted Ponzi schemers or indict the entire federal government for fraud on a scheme 1000 times larger (and growing) than Madoff’s.