There was plenty of news about Ponzi schemes in the last few years. Named after Charles Ponzi, these are essentially schemes that pay returns to investors from their own money or from subsequent investors without generating any actual profit. For example, say I guarantee you a 20% return on your investment. Enticed by such a good return, ten of you give me $100 each to “invest”. Rather than investing the $1,000, I could pocket $800 and put the other $200 in a separate account. When I get 10 more investors, I could pay each of your guaranteed 20% returns (totaling $200), take their $1,000 and repeat the whole process all over again.

It sounds great until you realize that the scheme is destined for failure. If there are no actual profits, the only way to keep it going is to keep counting on future investors. In other words, if you invest, you will not get your money back until several people continue to invest after you. Eventually, no more additional people invest and the system fails.

Bernie Madoff is credited with creating the largest financial fraud in history by a single person with his $64.8 billion Ponzi scheme.  Or was it ?

The recently passed health care reform bill will cost $940 billion over the next decade. Congress claims that the bill will reduce the deficit by $138 billion over the same period, leaving a gap of $802 billion. Oh yeah, we already have a federal deficit of over$12.5 trillion. Actually, it was $12,673,341,070,536 as of 7pm on 3/22/10. From 9/28/07 to today, the deficit has grown at a rate of $4.05 billion per day!!! To let this sink in, go to This is the national debt clock – a website that tracks our deficit. Once on this page, wait a few seconds and hit the refresh button to see how much the deficit increased in a matter of seconds.

So basically what we’re doing is spending money that we don’t have on the assumption that future generations (and China) will continue to pump money into the system. Maybe we were a little too harsh on Madoff.

I know this is a touchy subject. I’m not saying that we don’t need to get costs under control and make some changes regarding healthcare. I also believe that we need help care for those who have fallen on hard times or face severe medical problems and need assistance, but like any other system, people will abuse this one. People who are fully capable of paying their healthcare bills will allow the government (that’s you and me, fellow taxpayers) to pay their bills for them.

I’ve got two little girls that we are heaping insurmountable debt upon while drastically cutting funding of their education. When we cut funding to their education, we are taking away the tools that enable them to build their future (and their ability to pay down today’s spending).

All of this comes from the same government that sent me two letters letting me know that they would send me a census, sent me a census, and sent one additional mailing letting me know that they sent me my census after I had already filled it out and sent it back in. Maybe we could focus a little more on excess spending guys…