Perry’s Ponzi scheme debacle

In last night’s debate, Rick Perry doubled down on his rant against Social Security.

He called it a “monstrous lie,” reiterating his characterization of it as a Ponzi scheme. Perry has also continuously referred to Social Security as “a failure.”

Here is the basic problem Perry has: For 70 years, Social Security has been one of the most popular and productive programs to help senior citizens. Republicans and Democrats have supported it. In the 1980s, along with Ronald Reagan, Congress made changes to strengthen it. Now, few argue that changes are not needed once again to strengthen it — but not to privatize it or let states opt out. (On Nov. 4, 2010, Gov. Perry, citing three Texas counties, told CNN that states should decide whether to be a part of Social Security.)

The term Ponzi scheme has a very specific meaning for the type of swindle originating with Charles Ponzi in 1919 and continuing with the likes of Bernie Madoff. It promised quick and sure returns, used new, voluntary investors to pay old ones and is inherently a sham.

Social Security, of course, uses current money to pay those who are retiring, but the key is that this is not “voluntary” — employees and employers are invested in the system, and no one is getting scammed. Certainly, there are issues of cost-of-living adjustments, retirement ages, income caps, etc., that affect the amount of money coming in and going out, but to imply that this is a Ponzi scheme is false.

The key point made by Mitt Romney last night was that we need to fix Social Security, not abolish it. This will be a potential death blow to Rick Perry’s campaign, not to mention many of his other views from his book Fed Up — climate change, comparing the gay lifestyle to alcoholism, questioning the 16th and 17th amendments to the Constitution, etc., etc.

It is hard to imagine that Perry can win the nomination, even of a Tea Party-dominated Republican convention, with views such as these. Just on the Ponzi scheme comments alone, vast numbers of voters would abandon his candidacy faster than Madoff abandoned his investors!

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