In the wake of the alleged $50bn Madoff and $8bn Stanford ponzi schemes, I have to announce that I have uncovered one that’s a tad larger.
A ponzi scheme is defined as one where current withdrawals are funded by current receipts. So it would seem that the UK central and local government pension schemes with unfunded liabilities of £750bn is indeed a ponzi scheme. In fact so worried about this
are they, the UK government has apparently taken legal advice on the possibility of reneging on these massive liabilities. UK politicians in the form of Westminster MPs are of course beneficiaries of these copper-bottomed, gilt-edged, feather-bedded arrangements,
so there is no real possibility of default.
As long as our politicians benefit from these generous arrangements, there is no real incentive for them to preserve the interests of those in funded and often un-guaranteed schemes. That would be the majority of us, by my reckoning.
The sooner unfunded, guaranteed pension arrangements are phased out, the better.
And don’t get me started on the liabilities lurking in the UK state pension scheme…