Chinese Ponzi Scheme

I saw this on the WSJ Best of the Web and couldn't resist commenting. The New York Times has a story about the crisis in the pension system in China. A couple of paragraphs of the story were revealing. First, the Chinese have at least made a stab at reform, unlike our own politicians:

The new system combined elements of what had existed before — the fixed contributions of older workers in state industries — with individual retirement accounts for those working in the modern economy.

That sounds familiar doesn't it. Kind of like what has been discussed here as a possible reform.

Here's the part that was highlighted by Best of the Web:

Most troubling to financial experts, the government has used payroll taxes paid by the current generation of workers, who in theory are paying into their individual retirement accounts, to pay pensions for the previous generation.

That is most troubling isn't it? Sounds a lot like our Social Security system too. Maybe we should do something about that....