Full Tilt Poker vs. Social Security
Posted by Richard on September 20, 2011
The Justice Department has accused the executives of Full Tilt Poker, an online poker site, of operating a Ponzi scheme that defrauded poker players out of $300 million (emphasis added):
In the motion to amend the complaint, the government alleges Full Tilt executives misrepresented to the website's players that the money the company was supposed to be holding in player accounts was safely held when it was actually being used for other purposes, including payments to owners.
Rick Perry was roundly criticized, even by some of his fellow Republicans, when he recently described Social Security as a Ponzi scheme. So let's compare and contrast Full Tilt Poker and Social Security, shall we?
| Full Tilt Poker | Social Security |
| Executives assured customers that the money being held for them was safe. | Politicians assured citizens that the money being held for their retirement was in a "trust fund" or "lockbox." |
| Executives used the money from new customers to pay off the old and for other purposes, including enriching themselves. |
Politicians used the money from young workers to pay off the old and for other purposes, including rewarding their favored special interests and buying votes and support. |
| Executives cheated willing customers whom they had persuaded to trust them. | Politicians used the police power of the state to force everyone (except a few favored special interests) to pay into the system. |
So as you can see, Social Security isn't a Ponzi scheme like Full Tilt Poker. A Ponzi scheme only fleeces willing participants.
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