Excellent article

This article has a wealth of good discussion on why the economy is so screwed up. Go read it!

We are faced with not just one, but several Ponzi schemes hitting us broadside.
1) Social Security

For instance, there is no money in the Social Security trust fund.

Yes, you and I might have paid into Social Security, but we will never see any of those dollars ever again. All the money currently sent in is used to pay current retirees. And the excess is not saved for future generations. Instead, the government takes it out for general-purpose spending

2) Medicare & Medicaid

Medicaid and Medicare are two other Ponzi/Madoff schemes that are expected to provide services for an ever-growing proportion of the population and be paid for by an ever-decreasing tax base of workers. The funding deficit now exceeds $40 trillion. Where is the money going to come from?

3) Homebuilding & real estate market

The housing bubble of course was made possible by certain members of Congress who felt it was their duty to coerce Fannie Mae and Freddie Mac, the two giant government-sponsored lenders, to give loans—also known as subprime loans—to minorities and other “disadvantaged” groups who could not really afford to buy homes in the first place. In other words, Congress created a house Ponzi-scheme by artificially inflating the home buyers pool. Now that these subprime borrowers are defaulting on their mortgages, and banks no longer want to lend to subprime borrowers, there is no new money to enter the housing market—thus a classic Ponzi bust.

[...]

A few years ago it was reported that 40 percent of all job creation in the U.S. was related to the housing industry. Now, as jobs are being lost, the reverse is the case. America will see years’ worth of job creation erased. Just like Madoff’s money, it will be like the jobs never existed.

4) The dollar itself.

“The United States government runs its own balance sheet based on the Ponzi principal as well,” says economic analyst and president of Euro Pacific Capital Peter Schiff. “Our national debt always grows and never shrinks. As existing debt matures, proceeds are repaid by issuing new debt.”

[...]

As with Charles Ponzi and Bernard Madoff, once the legitimate-businessman sham is exposed, the whole scheme quickly collapses. In America’s case, all it would take is for foreigners to stop lending new money to the U.S.—they wouldn’t even have to pull their previous loans. The whole borrow-and-spend model of the U.S. economy would be exposed as an unsustainable fraud. And the dollar—which the government stopped backing with gold during the 1970s—could see its value evaporate overnight.

Well interesting times are ahead of us for sure. Granted this article was written for a apocalyptic newspaper, but that doesn't change the facts. We are starting to see this coverage in foreign news, it's only a matter of time before the bulk of foreign investors start to pull out.