NJ Government Pension System Is Ponzi Scheme
By Seth Grossman, Political Columnist
??? Eighty-eight summers ago, federal agents arrested 28 year old Charles Ponzi, and seized everything he owned.?? Ponzi then spent about ten years in federal and state prisons before being deported to his native Italy.?? Charles Ponzi had invented and run the original “Ponzi scheme” that cheated more than 17,000 investors out of tens of millions of dollars between 1919 and 1920.
??? It seems like Ponzi’s only mistakes were that he was just a little ahead of his time, and that he had used his scheme in business rather than government.?? If Charles Ponzi were in New Jersey politics today, he would be a very popular and successful Governor, Senator, or Congressman.??
??? The state pension programs for all New Jersey teachers, cops, firemen, and other government employees are all classic Ponzi schemes; so are NJ’s Clean Energy Program, our “Clean Election” Pilot Program, our Senior Citizen Tax Freeze Program, etc.?? And let us not forget to include popular national programs like Social Security and Medicare.
??? There are two key elements in a Ponzi swindle.?? First, everyone is told that they will make far more money from the scheme than they ever pay into it.?? Second, every Ponzi scheme gives big payoffs to a handful of early investors at the beginning.?? This makes them enthusiastic supporters, who then sincerely persuade the next batch of suckers to believe in the scheme – even when it seems too good to be true.
??? Charles Ponzi, began his swindle with a good idea in 1919.?? He discovered a loophole in the international postal system that let him buy international stamps cheap in the U.S., and sell them for a profit in Italy.
??? To buy his first batch of U.S. stamps for resale, Ponzi borrowed a few thousand dollars from friends and family, promising to pay them back with a 50% profit in 45 days.
??? Ponzi’s original plan failed.?? He could not find many Italians willing to do lots of paperwork to save a few dollars on postage to America.?? But Ponzi still paid his original investors all of their money, plus a 50% profit in 90 days.?? Since he had no profits, he paid them with money he had just collected from new investors.
??? Word spread quickly.? People from all over New England and New Jersey rushed to invest their life savings with Charles Ponzi so they could double their money in just six months.
??? By May of 1920, Ponzi was rich enough to control Boston’s Hanover Trust Bank and buy a mansion with air conditioning and a heated swimming pool.?? He was cheered as a hero in every Italian neighborhood as a living symbol of the American Dream.
??? But by August, 1920, Ponzi could not collect enough money from new investors to keep his promises to the old ones.?? After Ponzi’s arrest, the bankruptcy courts could only pay Ponzi’s investors pennies on the dollar.?? For the complete story of Charles Ponzi story, go to http://en.wikipedia.org/wiki/Charles_Ponzi.
??? New Jersey’s pension system for teachers, cops, firemen, and all public employees works exactly like Ponzi’s scheme.?? Everyone is promised pensions that are based on salaries for their three highest years.?? There is no connection between what is paid into the system and invested, and what is paid out.?? As with Ponzi’s scheme, future suckers (including future taxpayers who haven’t been born yet) will make up the difference.?? And when the supply of future suckers runs out, the scheme comes to a crashing end.
??? New Jersey’s “Clean Energy” program works the same way.?? Every day, we are told that government agencies like the ACUA and Atlantic City’s Convention Hall, plus some private businesses and homeowners, are making big “profits” from enormously expensive windmills and solar panels.
??? But none of those profits come from the energy they produce.?? Instead they come from “societal benefits” and “non-utility generation” charges of roughly ten percent that the B.P.U. (Board of Public Utilities) adds to every electric and gas bill in the state.?? The more people who sign-up for these “clean energy” programs, the more the B.P.U. has to charge everyone else.? In Denmark, these programs came to an end when most citizens realized they were getting ripped off, and let their politicians know it.?? How long will it take for New Jersey voters to wise up?
For more information, visit www.libertyandprosperity.org or contact Somers Point attorney Seth Grossman at grossman@snip.net or 609-927-7333.??? Seth Grossman hosts a two way talk radio program every Saturday from 8am – 9am on WVLT Vineland, 92.1 FM.
