...This is the way a Ponzi scheme works, with the first wave of "investors" getting paid with the money paid in by the second wave.
But, like Social Security, a Ponzi scheme creates no wealth but only an illusion that cannot last. That is why Mr. Ponzi was sent to prison. But politicians get re-elected for doing the same thing.
As the baby boomers begin to retire, and there are now fewer working people per retired person to pay for Social Security pensions, this scam is likewise headed for a rude revelation of reality — and perhaps riots like those in Europe.
All the incentives are for politicians to do what they have done, namely to promise benefits without raising enough taxes to pay for them. That way, it looks like you are getting something for nothing.
When crunch time comes and politicians are either going to have to tell people the truth or raise taxes, the almost inevitable choice is to raise taxes.
If the people think they are already taxed too much, then the taxes can be raised only for people designated as "the rich."
If "the rich" object, then demagogues can denounce them for their selfishness and "greed" for objecting to turning over ever-growing amounts of what they have earned to politicians.
Economists often make stronger objections than the high-income people themselves.
That is because history has shown repeatedly that very high rates of taxation lead to all sorts of ways by which those very high rates of taxation do not have to be paid.
No matter how high the tax rates are, they do not bring in more revenue when many of the people subject to those tax rates do not in fact pay them.
The scams inherent in welfare states are not only economically counterproductive, they turn group against group, straining the ties that hold a society together. READ" FREE LUNCHES ARE KILLING US WITH THE COST".