Perry Sticks to His Guns On Social Security
Texas Gov. Rick Perry isn’t backing down from the Social Security fight. He’s facing it head on.
Though his comments calling Social Security a “Ponzi scheme” have unleashed criticism from all sides, Perry has continued to defend his comments, even writing an op-ed in USA Today explaining his thinking.
Perry wrote that “Americans deserve a frank and honest discussion of the dire financial challenges facing the nearly 80-year-old program.”
He says the program needs to be reformed to make it “financially viable” for younger workers.
“By 2037, retirees will only get roughly 76 cents back for every dollar that is put into Social Security unless reforms are implemented,” he wrote.
“Imagine how long a traditional retirement or investment plan could survive if it projected investors would lose 24% of their money?”
Despite – and perhaps because of - his controversial stance on Social Security, Perry continues to lead his fellow Republicans in the polls.
A “Ponzi scheme” is an investing scam that pays returns to early investors by acquiring new investors, whose money is used to pay the early investors. It stays afloat for only as long as there are more new investors.
Perry’s critics need to read up on this. If they did they would see that he’s right. Social Security IS very much like a Ponzi. It takes money from young workers to pay benefits to older retired workers, and it works only as long as there are young workers to pay into the program.
The primary difference is that a Ponzi is voluntary. People don’t have to buy into one. Paying into Social Security is required by law.
Here’s what an economist wrote in the New York Times:
Ponzi schemes are named for Italian con-man Charles Ponzi. Ponzi didn’t invent this scheme, but he made so much money with it in the 1920s it’s been named for him ever since. Ponzi made millions, but he was small time compared to Bernie Madoff, who used the same scheme to steal billions from investors. Maybe it’s time to rename it the “Madoff Scheme.”