Skip to comments.Rich: Rick Perry Is Right About Social Security
Posted on 09/12/2011 2:33:21 PM PDT by Cincinatus' Wife
Texas Gov. Rick Perry made waves during a recent Republican presidential debate when he referred to Social Security one of the entitlement programs responsible for our nations skyrocketing debt as a Ponzi scheme.
You cannot keep the status quo in place and call it anything other than a Ponzi scheme, Perry said. It is a Ponzi scheme to tell our kids that are 25 or 30 years old today, youre paying into a program thats going to be there. Anybody thats for the status quo with Social Security today is involved with a monstrous lie to our kids, and its not right.
Many in the Republican establishment including several elected officials responsible for perpetuating this generational fraud scolded Perry for his remarks. In fact, one former advisor to George W. Bush went so far as to call Perrys views on the subject toxic.
In defending itself against Perrys criticism, the Social Security Administration (SSA) released a statement acknowledging that the program is and always has been either a pay-as-you-go system or one that was partially advance-funded.
Translation? New investors are required to pay off older investors the very definition of a Ponzi scheme, or what the U.S. Securities and Exchange Commission would call an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors.
Of course the SSA has a very literal defense against this analogy.
The American Social Security system has been in continuous successful operation since 1935, the agencys release noted. Charles Ponzis scheme lasted barely 200 days.
Perhaps, but can a system thats careening toward insolvency really be called successful? Also Bernie Madoffs Ponzi scheme which defrauded thousands of investors out of billions of dollars went on for at least two decades before it was finally detected. Most importantly, Charles Ponzi didnt have politicians and bureaucrats working with him who could compel higher taxes, the printing of new money or the accumulation of trillions of dollars in debt. If he did, his scheme might still be fleecing unsuspecting investors just like our government is doing.
According to Michael D. Tanner a senior fellow at the Cato Institute Social Security taxes have been raised at least 40 times since the programs inception by a total of more than 800 percent (even after adjusting for inflation). Meanwhile, the ongoing decline in Social Security benefits is forcing millions of Americans to work longer than ever before. In fact, a new Ohio State study reveals that reductions in benefits are responsible for anywhere between 25 to 50 percent of the recent spike in delayed retirements.
Most experts think it is inevitable that there will be further reductions in Social Security benefits to keep the program financially balanced, the studys author concluded. Those changes may very well lead to even later retirements.
Of course these changes will lead to later retirements which further underscores Perrys point. The only way to fix Social Security is to compel additional sacrifices from new workers while simultaneously reducing the benefits they are entitled to receive when they retire. Its exactly what Ponzi and Madoff did only the victims of this scam have no choice in the matter.
Social Securitys unfunded future liability is a scarcely-fathomable $20 trillion and growing. Also expanding is the imbalance between those who are forced to pay into the scam and those who are taking money from it. In 1945, there were 42 workers per Social Security recipient. Today, there are only three and that number is shrinking.
Rick Perry has correctly diagnosed Social Security as a Ponzi scheme. Now the only question is whether our political leaders will finally summon the courage to scrap this scam in favor of private accounts that will truly provide for the long-term welfare of our citizens.
AUTHORS NOTE: Howard Rich is chairman of Americans for Limited Government. He is also a syndicated columnist for Liberty Features.
Sept 7, 2011: 4 Minute YouTube VIDEO Clip: Perry Fires At Rove & Romney: Social Security Is A "Ponzi Scheme" And A "Monstrous Lie"
September 12, 2011 Perry and the Ponzis -- Until a half a minute ago, liberals called Social Security a Ponzi scheme, too -- by Stanley Kurtz (NRO) [excerpt] "So the question today is not simply whether Rick Perry will be punished or rewarded for showing the honesty even many liberal commentators once pined for. The more interesting issue raised by this historical investigation may be the fate of the Democratic party and the media. Where today are the liberal and centrist Democrats who only yesterday called Social Security a Ponzi scheme and supported bold reforms? Where now are the columnists and editors at Newsweek and the New York Times willing to reward truth-tellers and to criticize reporters who cover for cowardly politicians? The fate of Rick Perrys blunt talk may tell us more than we want to know, not only about Social Security, but also about who we are and what we have become." [end excerpt]
OK OK It’s a pyramid scheme, money has to come in on the bottom to pay off people on the top.
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The SS admin folks really say it is not a Ponzi scheme becuase it has lasted so long? Thta is funny. I believe Ponzi’s scheme would have lasted just as long if he could have forced everybody to contribute.
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