I’m sure you all know this, but I was just thinking about it last week after receiving a Social Security statement.
Social Security is a Ponzi Scheme. If you don’t know what a Ponzi scheme is: it’s when a person asks other people to invest with them, with the promise of some kind of return. There is no actual investment; the investors are merely paid off via NEW investors’ money. The problem is, there are not infinite people willing to invest, therefore Ponzi schemes always fail–and dramatically (think Bernie Madoff).
Social security is the same thing.  We pay money into the system, expecting to get something back–but really, we’re just paying for the older generation’s social security checks.  Sure, this is fine, as the population keeps growing, and giving to social security is compulsory, but what if our future generations aren’t big enough to support the older generation?  More importantly, if life expectancy continues to go up, no one will be able to retire or receive the benefits they paid into.
Yikes.
Randomly ended up here, started reading, etc.
The major difference between Social Security and general Ponzi Schemes is that the former has a team of actuaries who crunch the numbers to ensure that even if the system doesn’t change at all, and even if the most pessimistic of estimates WRT US income levels occurs, that there will still be enough money to pay a 75% levels at 2042, and before then, 100% payout (those were numbers from last year).
Start here: http://www.ssa.gov/OACT/TR/
Read, learn, and become informed.