Santelli, Friedman duke it out over “Ponzi scheme”

Hot Air ^ | September 8,2011 | ED MORRISSEY

[Hojczyk]

My friend Jazz Shaw worries that Rick Perry’s argument that Social Security in its present form is a “Ponzi scheme” leaves him vulnerable in a general election. Rick Santelli gave it a workout on CNBC today against the New York Times’ Thomas Friedman, who ends up sputtering into ad hominems when he can’t counter Santelli’s arguments about the nature of a collective that can’t pay out on its promises — and Santelli responds in kind. The Daily Caller provides the transcript and Greg Hengler provides the clip:

This gets to the larger point about using blunt language to describe an obvious problem. People appreciate that in leadership, although to be fair, they also want to hear about solutions or at least the framework of a solution. Perry provided that in his answer to the Ponzi-scheme question last night, specifically saying that seniors and those close to retirement would not be affected by Social Security reform, and that younger workers would not have their funds directed to a system that won’t survive for their own retirement. That’s not exactly a novel position for Social Security reform, and it’s about as specific as we saw from Ron Johnson and Marco Rubio when they won Senate races in Wisconsin and Florida in part by talking plainly about the need for entitlement reform, including Social Security.

http://www.youtube.cm/watch?v=RygWFh39CvE&feature=player_embedded

[PieterCasparzen]

Maybe now people will start listening to Paul Ryan.

IMHO...

Any plan to "save" or "reform" or "fix" Social Security has only a few choices:

A) Decrease benefits
B) somehow magically have "investment gains" on the fund balance
C) increase SS deductions, i.e., take more out of people's paychecks
D) have more people paying in.

A) As far as decreasing benefits, it's virtually impossible to live solely on SS benefits presently, so decreasing benefits only makes SS less relevant and more deceptive as a source of retirement income. In the case of raising the retirement age, that would be at best done only once or twice but would not get us through very many years, since if it is raised much past 70 years old it would start excluding people to the point of becoming laughable. The retirement age could be raised, especially in light of the fact that so many elderly working poor continue to work past 65 anyway. But the system is a joke now, as SS retirement benefits are taxable and SS continues to be taken out of the paychecks of the elderly working poor. What a retirement system.
B) The OASDI trust funds are invested only in government securties - for the time being the government is paying the interest it owes - but it has no realistic possibility currently of ever being able to pay back principal. So the $2.5 trillion in the OASDI trust funds is essentially gone. As far as being able to invest in anything else - there can be no practical assumption about the government being trustworthy enough to invest that much money anywhere and not lose it. The sad thing is that without the government paying back that $2.5 trillion in principal, the funds could not even be converted to personal retirement accounts. Each account would contain treasury debt that would have to be rolled over; retiring the debt as fast as necessary to fund individual plan withdrawals would require quite a bit of cash that the Feral government would be utterly hard pressed to come up with.
C) The system simply can't realistically take much more out of people's paychecks; every increase will cause employment to drop and confiscate even more disposable income from consumers
D) Desiring more people pay in would only serve as evidence that there most certainly is a ponzi aspect to the SS system.

Ultimately, as people have gotten more used to the system over the years, both conciously and subconciously they rely on it more and more over the years and it only causes them to increasingly neglect their personal responsibility for retirement investment planning.

[PieterCasparzen]

Can you imagine him on the Senate floor filibustering...

If he was in the House or Senate, C-Spans ratings would skyrocket every time he spoke.

[PieterCasparzen]

Can you imagine him on the Senate floor filibustering...

If he was in the House or Senate, C-Spans ratings would skyrocket every time he spoke.

[PieterCasparzen]

They share one brain between them I think. They could if they don’t. Wouldn’t that lower their carbon footprint or something ?

[Opinionated Blowhard]

LOL. I always love Santinelli:

FRIEDMAN: Your question is idiotic. That’s what you asked.

SANTELLI: You’re idiotic.

[TheThirdRuffian]

You could shorten the period in which benefits are given — i.e., materially raise the retirement age.

It could be worse.

I pay SS, but will move back to Israel shortly, and basically pissed away that money.

[jwalsh07]

Santelli exposes Friedman for the shallow putz that he is. LOL funny.

[gogeo]

To fracture a quote, Friedman's arms are too short to box with Santelli. Nobody on CNBC will take on Santelli.

The New York Times...only media I know where a "Nobel Laureate" in economics writes about politics...and a goof whose background is politics writes about economics, with predictably dismal results.

The problem, Rick, is that Friedman doesn't know enough about politics or economics to know what a Ponzi Scheme is.

[Freedom56v2]

Huhhh?!?!?!

[Graewoulf]

Thanks for your hotlink to Santelli.

[Huck]

bkmrk

[Mike Darancette]

Gotta love Rick Santelli.

[blueyon]

I encourage all of you to email CNBC at https://register.cnbc.com/email/EmailSupport.jsp with your thoughts of appreciation for Rick Santelli because you know the other side actively does

[lonestar]

bttt

[WOBBLY BOB]

thanks. they’re still both crapweasels.

[Pharmboy]

True enough...but Krugman is the more likely of the two to be found someday walking through a mall naked and talking to himself.