Madoff, Ponzi scheme and US government debt-bubble

[vit_r]

Meanwhile, I've been thinking that Madoff is a perfect analogy for the public sector. The government gives people money, which it expects to obtain by taking the money from people in the future. Even the Center on Budget Policy and Priorities, not known as a right-wing organization, sees the U.S. fiscal stance as unsustainable (pointer from Ezra Klein via Tyler Cowen)--in other words, a Ponzi scheme.

Madoff as Metaphor, by Arnold Kling

What follows is the Harry Markopolos complaint to the SEC, circa November 2005, identifying 29 red flags that Madoff was a fraud. This highly detailed complaint was filed regarding the apparent Fraud at Madoff Securities.

It was ignored by the Christopher Cox SEC, which was too busy concocting schemes to dismantle the SEC rather than investigate complaints such as this.

SEC Ignored Detailed 2005 Complaint re: Madoff, by Barry Ritholtz

There are many who say that our government debt-bubble will not collapse, and they list a whole host of reasons.

Why would you believe that?

Can you show, through history, one speculative bubble that has not popped?

Can you find one time - just once - that such a bubble was able to be grown without limit?

Simply put: No.

We're All Madoff
This is an uncomfortable reality, but it is reality. by Karl Denninger