What is a Ponzi Scheme? It’s basically a financial scheme where the first in get all the money, and the last in lose everything. The first in are paid by the money invested by the last in, and since they’re making money, it makes it look legitimate, drawing even more investors into the scheme(Crudele).
Also called a “pyramid scheme”, it is the slimiest of slimy dealings, because the perpetrator knows exactly what he’s doing. This is what Bernie Madoff has admitted he did to his investors. He has basically said that the money from the last investors “is gone”, probably into an offshore account somewhere where he can get it after he gets out of prison.Our government has said that we, the taxpayers, have to give to the bankers (who are, by the way, part of that top 1% that owns 24% of the U.S.! $700 Billion of our hard- earned dollars. Not that we really have any hard- earned dollars anymore, because jobs are flying overseas faster than a supersonic jet! So who is actually getting this money? If you look at what has happened already, it’s the executives and their managers. AIG paid for theirs to go to a couple of luxury conventions. All of them are using “retention” to explain multimillion dollar bonuses for the very CEO’s who caused this problem in the first place. Why on earth do they want to “retain” these crooks? So far, the ones paying the taxes have had no relief from the scheme. We are left in the hole, paying for it for the rest of our lives, while those who are benefiting loll around in million dollar mansions and fly in private jets to beg Congress for even more of our money(Sirota).
The common issues with ‘Bitcoin’ and ‘Linden Dollars’ are that there have been suspicions these virtual currency schemes are operating as Ponzi schemes, there is a high level of anonymity with regards to these virtual currency schemes and that there is only one regulator who oversees the system. The issue of Ponzi schemes are justified for virtual currency schemes such as ‘Bitcoin’ and ‘Linden ...
Does that not sound like a Ponzi scheme to you? It’s a classic robbing Peter (the U.S. Taxpayer) to pay Paul (the already wealthy banking and auto executives).
In a real Ponzi scheme, once the money is gone, there is no more profit for those at the top.This one is even worse, because they can keep bilking the American taxpayers for generations. The difference between a Ponzi scheme and the $700 billion dollar bailout is simple. Private investors know they’re taking a risk, and it’s their choice whether or not to do so. The perpetrators of the schemes can be prosecuted and sent to prison. Taxpayers have no choice. If they don’t pay their taxes, the IRS swoops down and takes everything they own. Nobody in the government is going to go to prison for starting this thing. Many of them are probably benefiting from it, because they are saving their own investments. Speaking of that, now we hear that the government may bail out the investors of Madoff’s scheme…. And the beat goes on.Works CitedCrudele, John, “HEY MADOFF! SHOW ME THE MONEY” (2009).
Accessed on 8 January 2008, at http://m.nypost.com/ms/p/nyp/nyp/view.m?id=20570&storyid=145224
Sirota, David, “Careless Industry” (2006).
Accessed on 8 January 2009, at