No, Really… Social Security Is A Ponzi Scheme.
Much is being made about a comment Rick Perry made regarding Social Security. He called it a Ponzi scheme. This, of course, gave the Left the vapors. That “dummy” Perry couldn’t possible know 1) what a Ponzi scheme is and 2) how Social Security wasn’t a Ponzi scheme. So, the bright lights of the Progressive movement set out to prove that Social Security wasn’t a Ponzi scheme.
By now you already know they’ve failed. Why? Because everyone who isn’t emotionally invested in sustaining the unsustainable cradle-to-grave nanny state knows that Social Security is a Ponzi scheme. The only major difference is that Social Security is a mandatory Ponzi scheme for anyone who works while private Ponzi schemes rely on gullible investors who voluntarily hand over their money. That’s about it, no matter how much Ezra Klein et. al. tell you otherwise.
Let’s look at the definition of a Ponzi scheme:
A Ponzi scheme is an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors.
Okay. Now let’s change a few words in that definition.
Social Security is a government program that involves the payment of purported returns to existing beneficiaries (retirees) from funds contributed by taxpayers who pay Social Security payroll taxes.
Of course, you can get into the minute details of where the money is actually coming from with Social Security and you can argue that the program is “transparent” therefore not “fraud”, but you’d be arguing against a simple fact: Structurally, Social Security is a Ponzi scheme.
It matters little that the government is running the Ponzi scheme. That just makes it legal. It also makes the situation worse. The government can do all sorts of things to keep the Ponzi scheme going and delay the inevitable collapse. This magnifies the size and scope of the inevitable collapse. The Maddoff’s of the world only hurt the people who voluntarily gave them money. The damage was contained. Social Security’s collapse will take the entire country down with it.
And let’s not forget how Medicare was tacked on to entitlement regime making the whole thing even bigger. Reform is needed now and the Left wants to play word games.