As no rational agent would be willing to take part in the last round in a finite economy, it is difficult to design Ponzi schemes that are certain to explode. This paper argues that if agents correctly believe in the possibility of a partial bailout when a gigantic Ponzi scheme collapses, and they recognize that a bailout is tantamount to a redistribution of wealth from non-participants to participants, it may be rational for agents to participate, even if they know that it is the last round. We model a political economy where an unscrupulous profit-maximizing promoter can design gigantic Ponzi schemes to cynically exploit this "too big to fail" doctrine. We point to the fact that some of the spectacular Ponzi schemes in history occurred at times where and when such political economies existed - France (1719), Britain (1720), Russia (1994) and Albania (1997). - Utpal Bhattacharya, 2003
Bernie Madoff provoked some anti-semitism with his ponzi scheme. Michael Savage says this is crap because most of Madoff's victims were jewish.
However, the IRS will let Madoff's victims take a 95% theft loss deduction, going back five years.
http://www.nydailynews.com/money/2009/03/17/2009-03-17_victims_of_the_bernie_madoff_ponzi_schem.html
Where exactly did the $50 Billion Madoff stole go? Israel? The taxpayers just helped the mostly jewish victims recover their losses. Did zionists double their money?
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