*Paraphrasing from the FBI site. with clarifications*
*Instead of benefitting all the investors who pay into it, it benefits the initial investors using the funds of subsequent investors. The scheme generally falls apart when the operator flees with all of the proceeds or when a sufficient number of new investors cannot be found to allow the continued payments to the initial investors.*
*As in the above scheme, in this scheme the money collected from newer investors is paid to earlier investors to provide a veneer of legitimacy. However, this scheme doesn't just pay to the initial investors, it pays to all previous investors who reach a certain level. In society the investors themselves are often induced to recruit further investors.*
But when government mandates new investors many call this a "good government program"?
Besides that isn't this what "insurance" is?
Everyone in this group gives me (insurance company) $1 a month = $78 in a year that's $936, but one of you has an emergency (whether medical, dental, automotive, etc.) and the cost is $900. Now we're down to $36 and as long as there are no more emergencies then everything is fine, but if someone else has an emergency then I "fold" and all the rest are SOL.
Except that premiums are sky high and 2 years ago, the head of BCBS took home, for himself, bonuses and salary upwards of $30 million dollars.
You only get that rich stealing from the insured.
And this model overlooks the fact that people have coverage only until they get sick. Then they are cancelled. They don't get back any of the money they put in.
Yes, Dynamite, 'insurance' for the most part is a 'scheme'.