Skip to comments.The Republicansí Social Security Choice (Is it helpful to call it a 'Ponzi' Scheme?)
Posted on 09/09/2011 6:18:11 AM PDT by SeekAndFind
Gov. Rick Perry has drawn a lot of criticism for calling Social Security a Ponzi scheme, but the fact is that it bears more than a passing resemblance to one. In both cases earlier participants can only get their money back if new participants join; in both cases no wealth is actually created; in both cases the earlier participants get a better return than the later ones; and in both cases the system is unsustainable. But of course there are also differences. Ponzi schemes are run to make their originators a profit. The federal government is running Social Security at a loss that is set to increase.
And Social Security, unlike a Ponzi scheme, can be reformed to be made sustainable. Slow the growth of benefits sufficiently, for example, and the programs fiscal gap will disappear. Its disincentive effect on saving, and on delaying retirement, would also diminish. But neither Governor Perry nor his principal critic, former governor Mitt Romney, has offered any specific proposals on Social Security, and both of them run the risk of setting back the cause of reform.
In Perrys case, the risk comes from the combination of rhetorical maximalism with policy vagueness. He says that program is unconstitutional, a failure, and a lie. These claims would seem to imply that the program should be abolished. He has mused about the idea, and his advisers have refused to rule it out. But he has not endorsed it either, doubtless because he knows it would be an act of political suicide. As such, it would make it impossible for him to accomplish any practical reforms to the program and, for that matter, to accomplish anything else on his agenda. Maybe its time to have some provocative language, says Governor Perry. We hope it provokes him to explain how he would bring the programs benefits in line with its revenues and his proposals in line with his premises. In last nights debate he wisely suggested that his campaign will not relitigate the political battles of 70 years ago. If he wants to move the discussion to the future, as he should, he needs to start talking about a plan.
Governor Romney correctly notes that the public, while aware that Social Securitys financing is unsound, remains extremely attached to the program. Our nominee has to be someone who isnt committed to abolishing Social Security, but who is committed to saving Social Security, he says. But is he that man? At the debate he refused to say how he would save it. In subsequent remarks he expressed openness to raising the eligibility age, imposing a means-test on the program, and instituting voluntary personal accounts. But unless he unveils his own plan, the effect of his attacks on Perry will be to strengthen the political taboo against candid and realistic discussion of the programs flaws. Romney has a choice to make: He can run as a realistic reformer, or he can say me, too to Democratic criticisms of conservatives.
What either or both of them should say is that Social Security is a program on which millions of Americans rely, that people who are in retirement or near retirement will not be asked to make a sudden change in their plans, and that to secure the programs future the benefits formula will have to be gradually adjusted. As it stands, the feud between Perry and Romney is accomplishing nothing for anyone outside the White House.
Ponzi Schemes are voluntary.
The fact of the matter is that if Congress were the board of a private company managing their employees pension fund the way that they manage SS they would all be in prison! That’s where most of them belong anyway.
On the other hand, I have even more respect for him after that first debate. Basically, he's relying on his gut instincts and not swaying with whatever changes in the wind.
Use the democrat’s tactic of removing the words “ponzi scheme” from their vocabulary in favor of “Amway-like monetary solution”.
The profit SS's originators hoped for was a permanent dem majority in Congress...FDR said so. And they threatened then to do exactly what they're doing now to anyone who dared try to take away their 'golden goose'. They'd play the fear card on seniors duped into believing the federal government was responsible for their retirement. I hope to God that this is finally the time when we wise up and ram that gar5bage down the democrats throats when they try it. And ram it down the throats of any republican who tries it too!
Keep it up Gov. Perry! Don't let the bastards get you down!!
If you take the lipstick off a pig, does that mean the pig is no longer a beautiful woman?
More than half of Americans, 56 percent, would be less likely to vote for a presidential candidate who favored phasing out Social Security so that workers could invest their payroll taxes in the stock market, according to a nationwide poll in June by The Wall Street Journal and NBC News. That included 64 percent of Democrats and 57 percent of independents, whose swing votes decide elections, and even a 45 percent plurality of Republicans. Only one-third of Republicans said they would be more likely to vote for someone who espoused ending Social Security.
The criminalgovernment wasn't complaining about "running Social Security at a loss" when the money was pouring into the General Fund like a waterfall.
FAIL. It's a Ponzi scheme.
Don’t you love the question about whether it is “helpful” to call it a Ponzi Scheme?
How about we worry less about hurting feelings and more about telling the truth.
My sentiments exactly.
Just fine with Perry calling SS a Ponzi scheme. He needs to make sure though to articulate well why it is that and give viable solutions to it in the future campaigning.
Actually not National Review. Social Security orinially had a ratio of 24 workers to 1 retiree, now that ratio is about 2.7 workers per retiree and going lower. This is unsustainable and without question a Ponzi Scheme.
Is it helpful to cut $245 Billion from Social Security and Medicare like Obama proposed last night?
THE TRUTH IS ALWAYS THE BEST POLICY!
It’s not a Ponzi scheme, it’s an “FDR scheme”
Is it helpful to know your enemy's game plan ?
If you're in need of assistance, is it helpful to publish the truth about your enemy ?
If the entitlements aren’t radically cut - and I doubt that they will be - it doesn’t matter who is elected. The economy and civil society will collapse and those majorities will get what they deserve. Unfortunately, those who don’t vote out of greed will will tend to get the same thing.
Eventually these programs end up becoming like a big anchor around the economies ankle. Eventually governments find themselves in the odd predicament of playing shell games and robbing Perter to pay Paul. Of course those politicians that benefited from creating these schemes are long-long gone and you're left with people that are addicted or dependent on this scheme.
Are the editors at NR blind? There is no profit in a Ponzi scheme. The originators simply spend the excess money that is taken in. The federal government has also spent all the excess money taken in from Social Security taxes. There is absolutely NO DIFFERENCE
There are some who truly believe that a system not tied to economic output, based on a transfer payment between those working and retired is sustainable. It's only a matter of time and when we do hit the end of the road, the solutions proposed will be increasing the ages of retirement, decreasing amounts, only paying a select group certain amounts (means testing), increasing the burden on those working presently... The way the decision will be made isn't based on who paid what for how long, rather it will be what benefits the policy makers have and which group can influence him most. Instead of a market and people choosing, it becomes a political decision. Those advocating these social schemes essentially believe this is the better form because it's somehow more socially just in their eye's. It's not a question “if,” rather just “when.”
I really think a more accurate description is a ponzi scheme based on intergenerational theft.