[FoRK] Chart of the Day...

Sean Conner sean at conman.org
Thu Jun 10 00:17:07 PDT 2010

It was thus said that the Great Ken Ganshirt @ Yahoo once stated:
> Finally, the issue of scams and ponzi schemes. I've asked twice now why
> someone thinks pension plans in general are scans or ponzi schemes, with
> no response yet. I've described a defined-benefit pension plan that I
> don't believe to be either a ponzi scheme or a scam. If you can't or won't
> explain your claim in the general case, at least please explain why you
> think this example is either a scam on someone or a ponzi scheme. ?????

  I think it comes down to running the numbers.

  In 2009, GM [1] had 244,500 employees.  I can't seem to locate the number
of people receiving a GM pension, but I did see that in 2008, GM announced
it was dropping 100,000 pensioners off it's payroll, which is nearly half
the number of current employees.  So, assuming that in 2008, GM had around
240,000 employees, then they were really sending checks to at least 340,000
people (and I'm willing bet the number is higher), a good third of which
don't even contribute to the company's bottom line.

  So maybe not a Ponzi scheme in the technical sense, the certainly
unsustainable over the long haul (and GM has been around for a long time

> Related to that, I'm truly baffled why anyone would think a
> defined-contribution plan is a scam on anyone or a ponzi scheme, so long
> as the funds - real money - are placed in the hands of a third party to
> manage so they will actually be available to the plan participants when
> they claim them.

  Depends on if you think investments are a form of gambling.  Given some of
the recent financial shinnanigans, I would trust a casino more than I would
most banks!

> Or am I missing something?? Please be a lot more specific.

  So what happened to Greece?  Government run Ponzi scheme?  Or just a
dismal return on falling demographics?

  -spc (i.e. birth rate in Greece falling below replacement levels)

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