Madoff Was Only a Petty Crook Compared with Uncle Sam

Bernard Madoff was in the news again today. I quote here from a CNBC report, adding my own commentary to put the report into perspective.

Disgraced financier Bernard Madoff has arrived at federal prison in Butner, North Carolina, CNBC has learned, though it is still not clear if that will be his permanent home.

President Barack Obama and the sitting members of Congress have not been charged, much less convicted and sentenced, for crimes that make Bernie Madoff’s look like child’s play. Note well: I am referring here not to the assorted murders, assaults, and batteries for which these men and women are manifestly guilty – I say guilty because they not only admit these crimes, but proudly take public credit for them – but to certain of their strictly financial crimes.

Madoff, 71, was sentenced last month to 150 years in prison after pleading guilty in March to charges that his investment advisory business was a multibillion-dollar scheme that wiped out thousands of investors and ruined charities.

Madoff caused people to lose billions of dollars. The U.S. government has caused people to lose trillions of dollars, and it’s not finished yet. The public’s losses mount during every minute of every day. By its effects in discouraging work, saving, and investment, and thereby reducing capital accumulation, the U.S. Social Security system has caused the nation’s gross domestic product to fall significantly below the levels it would otherwise have reached. According to Professor Edgar K. Browning, a leading researcher in this field, “the available evidence suggests that Social Security has reduced [current] GDP by 5 to 10 percent.” Ten percent of GDP is now approximately $1.4 trillion – or about 28 times the maximum amount Madoff is believed to have cost his clients. Moreover, Madoff’s harm is a one-shot loss, whereas the U.S. government’s Social Security harm is an ongoing loss that grows annually. In the future, the annual loss will be even greater than the currently estimated $1.4 trillion or so. More