Rick Perry says Social Security is a "Ponzi scheme" and a "monstrous lie" (Perry speaks the truth)

cbs ^ | 8/29/2011 | Corbett B. Daly

[tobyhill]

Republican presidential candidate Rick Perry continued his attack on Social Security over the weekend, calling it a "Ponzi scheme" and a "monstrous lie" to younger Americans who should not expect to get back their contributions upon retirement.

"It is a Ponzi scheme for these young people. The idea that they're working and paying into Social Security today, that the current program is going to be there for them, is a lie," Perry said, according to the Houston Chronicle.

"It is a monstrous lie on this generation, and we can't do that to them," Perry told a crowd a The Vine Coffeehouse in Ottumwa, Iowa.

[NVDave]

Let’s ask the SEC what the definition of a Ponzi Scheme is. They have an entire page devoted to it:

http://www.sec.gov/answers/ponzi.htm

The salient red flags that apply to Social Security: Low-risk, unregistered “investment,” requires a constant flow of new money, etc.

As I look at it, the Social Security system meets the preponderance of the governments own criteria for a Ponzi Scheme.

Since they’re who is writing the regulation on the matter, I defer to their definition. Social Security is a ponzi scheme.

[Lucky9teen]

That’s 4....questions...

;-p

[SoJoCo]

"I haven't backed off anything in my book. So read the book again and get it right," Perry told the reporter, according to the Chronicle.

Amazingly enough, or perhaps not so amazingly, neither Perry's book nor his speech have any solutions to the Social Security mess.

[tobyhill]

Not even close. He just stated what everybody already knows. He will only hit the danger point if he starts talking about what he would do about it which he doesn’t have to do at this point or even through the campaign.

[tobyhill]

He doesn’t need solutions now, he just has to point out the obvious.

[SoJoCo]

Don’t worry, Don. No one is talking about taking existing SS away.

So Social Security is a 'monstrous lie' for the younger generation...but they're going to have to continue to plow their money into it anyway?

[SoJoCo]

He doesn’t need solutions now, he just has to point out the obvious.

I don't think that "Vote for me because I can see the same train wreck that other people can see and I don't have any solutions for them either" is going to be a winning campaign strategy. Not after Obama.

[DRey]

I didn’t say that. But if you’re looking for my own personal “answer,” it’s a few posts down.

[ex-snook]

Thanks for cutting thru some of today’s talking points. Not mentioned yet is what inflation has done to the SS system. Money paid in on 1950 dollar earnings is not enough to sustain today’s cost of living. This, as well as exported jobs not paying into the system and lock-box robbers, contributes to today’s shortfall.

[absolootezer0]

Now once Perry’s critics tell me where they’re going to find that $17.5 trillion, I’ll take their complaints about Perry seriously.

start by getting rid of all the BS ss disability crap..

[TruConservative]

From the definition of a Ponzi scheme with my comments in brackets

A Ponzi scheme is an investment [SS is not an investment] fraud [SS is not fraudulent] that involves the payment of purported returns [SS doesn’t pay returns] to existing investors [SS doesn’t have investors] from funds contributed by new investors. Ponzi scheme organizers often solicit new investors by promising to invest funds in opportunities [there is no investment in SS] claimed to generate high returns with little or no risk [there is no claim of “high returns”]. In many Ponzi schemes, the fraudsters focus on attracting new money to make promised payments to earlier-stage investors and to use for personal expenses [there are no funds used for politicians’ personal expenses], instead of engaging in any legitimate investment activity.

SS takes a fraction of all paychecks, and distributes the money in proportion to how much the retirees had paid to SS during their work lives. There is no investment, there is no promise of high returns, there is no fraud, there is no one skimming the money for profit, it cannot collapse, it cannot go broke, there is nothing here that is like a Ponzi scheme.

The overhead for SS is less than 1%. SS delivers 99 pennies out of every dollar to retirees. That is not a Ponzi scheme; that is a straight-forward, honest way developed by smart people 76 years ago to provide a minimum safety net for retirees without having to rely on savings interest, the stock market or anything else with investment risk.

[Grunthor]

You are here. Michael is not. I like Perry and might even wind up voting for him and working for the campaign....but we have to stop comparing our conservative leaders to Reagan.

It would be in religious terms like comparing a Pastor to the Apostles Peter or Paul.....it’s unfair to put that kind of pressure on a man.

[NVDave]

Yes, it appears Perry is a bit of a “loose cannon.”

Wanna know something? I think it could work.

The GOP has run a defensive campaign on entitlements since the 80’s. It keeps working less and less and less. Bush expanded entitlements the most since LBJ to prove that he was a “compassionate” conservative (which will only bankrupt us faster).

Someone has to grow a pair and go on the attack here. The best defense is a good offense, and hunkering down in a static defensive position is the best way to lose this type of battle. The opposition just keeps hammering at you until you break.

Perry, if he’s smart, will go forth on a fact-based issue which stirs up controversy about once/week. Once per week, he should say something outrageous but absolutely true and EASILY verified as true. The Democrats and their spin doctors don’t have a playbook for that. They’re used to going on the attack on these issues. If Perry rolls out an statement once/week that makes them flip their wigs, they’ll be so insane with rage so quickly they won’t know whether to crap or go blind.

Perry could strike fear into the hearts of the Democrats if he starts going after Obama’s crony love affair with the bankers of Wall Street about halfway through every news cycle. Start a formula that goes like this:

1. Say something outrageous, but true.

2. When the attack machine gets spun up for that week, (wait say, 48 hours) hammer Obama on his crony affair with bankers, or the GM bailout, or how seniors who have saved for their retirement are getting screwed out of yields/interest because Bernanke is keeping rates so low to help out bankers, etc, etc. Take on the trade deficit, environmental regs raising power costs, whatever.

3. Hammer Obama on issue raised in #2 for the rest of that week... then

4. Go to 1 and say something else that causes outrage on the left, but is easily verified as true.

Take no prisoners. Take the attack to them, pound it on issue after issue. Tie it back to jobs, the future financial security, the bailouts to the bankers, etc. Keep tying every issue back to jobs, financial security, the failure of Obama to lead on the economy... and they have no defense. This is so easy that the campaign practically writes it’s own script. What it needs is a guy who isn’t in the thrall of the DC GOP hacks like Charlie Black and others who advised such losers as Bob “Viagra” Dole and John “Keating 5” McCain.

[FromTheSidelines]

But on SS, look at what you buy, see where it is made. ALL those workers and their ‘employers’ do not pay SS. If SS was collected on these products, we would not be having SS problems. SS worked until we exported the jobs. American companies and their employees have to pay SS taxes, level the playing field. Put a SS tax on all imports.

Where are SS taxes from? They're from wages. They're not from tariffs, but from wages.

Are the number of people working now, earning wages, 1/7th of what they were back when Bloomberg was talking about it? That would require 7 times more unemployed people.

From a SS standpoint, it doesn't matter if your computer comes from Malaysia or Round Rock; your SS is paid by US workers working now. And there are still a bunch of them, and they are all paying SS.

What has happened, is the expense side of SS has dramatically increased - longer lifetimes, more people collecting (the baby boomer demographic bulge), use for novel benefits (survivor benefits, SSI and disability). We're spending a lot more on lots more things that SS wasn't supposed to pay for.

So, we're in a $20 trillion hole (and growing). It's not because there are so many fewer people working and paying taxes on their wages, it's because we're spending way too much.

Just like Washington in general; in constant dollars, the Federal Government is taking in the same as it did in 1998 (when the deficit was down in the $80 billion range). The problem is spending in those same constant dollars is up 50% - and so our deficit is way up.

We have a spending problem for Social Security, not a revenue problem. More workers today (because of a larger population) earning on average more dollars today than 20 years ago - but SS is going bust faster because it's paying out more than it is bringing it.

It's not the number of workers or where things come from that is this problem - it's that the program was set up as a Ponzi scheme from the beginning. The first to receive benefits never paid in; they received money from other workers. And so it's gone - every dollar you pay in now goes to pay existing SS recipients. Every dollar you MAY get in the future will come from future workers, not from your own pocket.

It's a Ponzi scheme, and the explosion in recipients is what will kill it.

[FromTheSidelines]

Amazingly enough, or perhaps not so amazingly, neither Perry's book nor his speech have any solutions to the Social Security mess.

The first step in solving a problem is identifying and admitting there IS a problem. At least Perry has done that...

[Graewoulf]

Thanks for the ping. Keep me on you ping list. Since you agree with me you must be VERY intelligent!

[ex-snook]

“It’s not the number of workers or where things come from that is this problem.”

---

Look at what you buy. It’s a revenue problem when workers in other countries do not pay into SS and Americans do. Assess SS on all imported goods as if they were made in America. Level the playing field.

[SoJoCo]

I didn’t say that. But if you’re looking for my own personal “answer,” it’s a few posts down.

You running for president, too?

[livius]

You mean the system that pays winos and druggies as “disabled persons”? The average street wino who is out there panhandling is also collecting a check for his “disability,” which would be more than enough to get him a decent room and other things (I believe disability pays more than retirement).

SS covers so many things that it was never meant to cover. And the people who are being blamed are the next generation of retirees, the Boomers, who have paid heavily into this system all of their lives.

I’m self-employed and I pay 16+% of my income. You employed folks pay 8+% and your employer pays the rest. We should be able to collect something on this.

Perry has got to make it clear that he is not blaming the recipients, but the system. Even Chile has a system where they invest it all, don’t spend it on other things, and give retirees a one time payout of around $200,000 and then an income of about $3,000 per month (converted to what would be equivalent here in the US).

But SS in the US has been the private slush fund of anybody who wanted to buy a few votes or make himself look “progressive,” and that’s why it’s going broke.

[Texan]

jarred me too

That's why I think it's smart to say it NOW and often. By pounding it in now, it gives people the time to get used to the idea and say, "Yeah, he's right. Now what are we gonna do about it"?

When he wrote his book "Fed Up", he hadn't planned on running for President so he can't run away from anything he's said in the book. The more something is said, the less shocking it sounds.