I guess everything we do has collateral damages. The problem is how we minimize the damage without interfering too much. It's like the man on a wire kind of thing.
It seems silly to be opposed to Ponzi schemes that affect only the wealthy investors who buy in, but in favor of Ponzi schemes that affect everyone who pays payroll tax.
Social Security isn't a Ponzi scheme; it isn't even an investment scheme. It is a welfare program with a funding model loosely designed to resemble insurance. Your payroll tax today does not entitle you to any promised future benefit beyond "whatever the SSA and Congress decide to pay in the future." Contrast that to a pension plan, which is a defined benefit from the moment you start working.
Nitpicking, but a lot of pension plans these days are "defined contribution" rather than "defined benefit". You put in whatever amount monthly (the contribution), what you get out depends on how the plan does in the next 40 years.
Yet there are enough people who are "yelling" that the government did nothing to stop Madoff from doing what he did.
That's why it is so hard to be in balance. How to please everybody?
There's no disputing that Madoff committed fraud - and he was prosecuted for it - and unless we want the government counting every penny we spend then there will continue to be fraud perpetrated till the heat death of the universe. All the whining about crowdfunding is telling people that they are disallowed to take any risk with their own property, but only for their own good of course. The laws against fraud do not go away because we've allowed adults to act a little more like they have some common sense.
I have been the victim of fraud, and I spent two years pursuing the embezzler and collecting evidence out-of-county and testifying in federal court. The man ended up serving several years in federal prison for his actions. Oh, this was in a publicly traded company - you know - full of all those supposed protections. There will be fraud in the future, and there will be people who get away with it.
It's always caveat emptor - but we prevent a lot of potential good trying in some misguided attempt to not let people act like the free men they supposedly are.
My favorite Tacitus quote comes to mind: "The desire for safety stands against every great and noble enterprise."
Of course, the real winners when new systems of preemptive regulation are introduced aren't investors or entrepreneurs, but the regulators themselves, at everyone else's expense.
You think the SEC staff enjoy making rules and enforcing them, for no profit and guaranteeing to make enemies of one side of every dispute they regulate?
I don't know whether they enjoy it or not, but it certainly pays their bills. And it's not clear that it makes enemies out of anyone they have to deal with at all.
I disagree with both, are people going to scammed? Sure. Did Madoff scam a bunch of rich "intelligent" investors? Damn straight.
I personally fall on the line of personal freedom with reasonable safety nets, to me that is, allowing micro-loans, but continuing social security.