Perry calls Social Security 'monstrous lie'

Houston Chronicle ^ | August 28, 2011 | PEGGY FIKAC, AUSTIN BUREAU

[Cincinatus' Wife]

OTTUMWA, Iowa - Riding high in the polls, Gov. Rick Perry rode into Iowa on Saturday with tough talk on President Obama, the economy and foreign policy and a declaration that Social Security is not only a Ponzi scheme but a "monstrous lie" for younger people.

"If you're for the status quo in America, I'm not your guy," Perry told an overflow crowd eager to see the presidential candidate at The Vine Coffeehouse, where people repeatedly sang God Bless America - once to try to encourage Perry to come in from shaking hands with people outside.

Asked by a woman in the crowd about Social Security being viewed as an entitlement program, Perry reiterated the suggestion in his anti-Washington book, Fed Up!, that the program amounts to a Ponzi scheme.

"It is a Ponzi scheme for these young people. The idea that they're working and paying into Social Security today, that the current program is going to be there for them, is a lie," Perry said. "It is a monstrous lie on this generation, and we can't do that to them."

Later, in Des Moines, when a reporter asked about the suggestion that his campaign was backing off some positions in the staunch states-rights book, Perry said, "I haven't backed off anything in my book. So read the book again and get it right."

National conversation

He told the Ottumwa crowd that for people who are drawing Social Security or near eligibility "like me," he wasn't proposing a change in the program. But he said there should be a national conversation about potential changes for others, including raising the age of eligibility and establishing a threshold based on a person's means.

[GregoryFul]

Simple fact. People collect far more than they ever paid in.

You are simply wrong on this. Take your annual report, add up your contributions, and your employer's contributions over the years (your compensation for your labor). Apply a 5% compounding interest to the accumulating fund (an easy risk-less return on investment over the past 30 years), and check out what that fund would have accumulated to. Then check with SS to see what the benefit you receive would be. I'll bet you that it will be less than 5% annually of the nest egg the SS has accumulated from you over the years.

[DB]

First of all there is no SS fund or “nest egg” to be invested and accumulate interest. Only a small part ever went into treasures. To argue otherwise is to deny reality. You can complain that the government shouldn’t have spent the “nest egg” money and it isn’t the peoples fault. Well I disagree. These people were the voters running the government at the time, in addition they got the benefits of all that spent “nest egg” money during their lives. Not so good for those who come after and are stuck with the bill.

Second, seniors right now on average are collecting much more than they paid in. I’m talking what they paid in while they worked and what they collect until they die. People both live far longer and benefits have expanded far beyond what the “plan” started as. In addition these seniors did not pay nearly as large of a percentage of their income to SS when they worked than we do now.

[GregoryFul]

You are right, I'm trying to exemplify the fraud, the "monstrous lie" of SS. No private "nest egg" has been set aside to fund the retirement income that a similarly funded private plan would have easily and much more generously provided. The money was stolen from us seniors over our working lives, eh? And now it is being stolen from the people who are working for wages. Those are the facts.

On the other hand, full faith and credit, interest bearing sovereign obligations were issued to the SS Fund for the borrowings - debt on an equal footing with US bonds and notes.

As an oldster, I dispute that we "got the benefits of all that spent 'nest egg' money during our lives." Much of the government expenditure will provide for long duration benefits, infrastructure, defense, civil society, education, scientific advances, & etc. that will certainly outlive our consumption of such, and yield benefits for generations to come - if at all managed properly, that is the question, and right now our present government is squandering that legacy wildly. Hence the Tea Party movement, which if supported with sufficient vigor, will restore a beneficial fiscal policy.

Your second point is preposterous. Seniors are not collecting more than they paid in, except perhaps in nominal dollars; it is a preposterous assertion that they should be sanguine with a significantly less than 0% ROI. The simple fact is that the money collected from most workers can cover their benefit forever, and ultimately leaves the government, and future citizens, with the "nest egg" to spend or invest as they see fit.