Wash. Exam. Agrees With Perry: Social Security "Sounds Like A Textbook Definition Of 'Ponzi Scheme' To Us"
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In a September 8 editorial, The Washington Examiner agreed with Governor Rick Perry's (R-TX) claim that Social Security is a "Ponzi scheme." In fact, experts agree that Social Security's "structure, logic, and mode of operation have nothing in common with Ponzi schemes," as one Social Security Administration historian said in 2009.
From the editorial:
"They've called it 'insurance' to us in a hundred million pieces of literature. But then they appeared before the Supreme Court and they testified it was a welfare program. They only use the term 'insurance' to sell it to the people," Ronald Reagan said about Social Security in his landmark 1964 speech, A Time for Choosing. "There is no fund," Reagan continued, "because Robert Byers, the actuarial head, appeared before a congressional committee and admitted that Social Security is as of this moment $298 billion in the hole. But he said there should be no cause for worry because as long as they have the power to tax, they could always take away from the people whatever they needed to bail them out of trouble. And they're doing just that."
Reagan's description of Social Security is as true today as it was then. And conservative Republicans have been making the same case for almost 50 years. The election victories in 2010 of Republican Sens. Ron Johnson in Wisconsin and Marco Rubio in Florida show that the American people are increasingly open to this message.
Now here is Merriam-Webster's definition of a "pyramid scheme," which they note is also called a "Ponzi scheme" in the United States: "A dishonest and usually illegal business in which many people are persuaded to invest their money and the money of later investors is used to pay the people who invested first." To recap, Social Security was dishonestly sold as "insurance" when really it is no such thing, and the funds Americans pay into the program today are really paying for the benefits of those who contributed to the program years ago. Sounds like a textbook definition of "Ponzi scheme" to us.