Rick Perry in USA Today: I am going to be honest with the American people

posted at 12:05 pm on September 12, 2011 by Tina Korbe

For too long, politicians have been afraid to speak honestly about entitlement reform — but the American people deserve the facts, Texas Gov. Rick Perry writes in an op-ed that appeared Monday in USA Today. Perry provides the cold, hard truth:

Social Security’s unfunded liability is calculated in the trillions of dollars. Last year, annual Social Security outlays exceeded annual revenues for the first time since 1983. The Congressional Budget Office projects that outlays will be roughly 5% greater than revenues over the next five years, worsening as more and more Baby Boomers retire.

By 2037, retirees will only get roughly 76 cents back for every dollar that is put into Social Security unless reforms are implemented. Imagine how long a traditional retirement or investment plan could survive if it projected investors would lose 24% of their money?

I am going to be honest with the American people. Our elected leaders must have the strength to speak frankly about entitlement reform if we are to right our nation’s financial course and get the USA working again.

The piece appeared opposite an editorial from the USA Today board. The view of the paper? “Social Security far from a Ponzi scheme.” The board writes:

Yes, Social Security has major funding problems. It pays out more in benefits than it takes in, and the gap will grow steadily worse as Baby Boomers retire. To that extent, Perry has a point. Congress, under both Republican and Democratic control, has been negligent in making necessary adjustments to bolster Social Security’s balance sheet for the long term. But the program’s problems are largely the result of people living longer, and therefore collecting more in benefits, rather than some inherent structural shortcoming or constitutional failing.

Social Security is most certainly not a Ponzi scheme, which is an undertaking designed to swindle people out of their money by using incoming revenue to produce bogus investment returns to attract more money (see Ponzi, Charles and Madoff, Bernard).

Ponzi schemes have two salient features. First, they are criminal enterprises, which Social Security is not. Second, they work only until people get wind of what is going on, at which point they inevitably collapse. Social Security’s finances are plainly visible for all to see. The imbalances emerging now are a surprise to no one, and modest adjustments in tax rates, benefit formulas and the retirement age can ensure the program’s viability for generations to come.

Perry is playing to fears among younger voters that Social Security won’t be around for them; polls have shown that more than 60% over those under 30 don’t expect to collect. But even if nothing is done, the program could still pay about three-quarters of promised benefits at mid-century.

The term “Ponzi scheme” attracts such attention because it does typically refer to a criminal enterprise. In that respect, the USA Today editorial board is right. Social Security is not illegal. But the board’s second point — that SS is not a Ponzi scheme because it hasn’t collapsed, because investors continue to invest — makes little to no sense. Social Security doesn’t have to attract investors with the soundness of its returns; the government mandates that every single worker invest in the program. If SS did have to attract investors, the program very well would collapse in true Ponzi-scheme fashion as soon as current workers found out they’d be lucky to receive as much in benefits as they invested in payroll taxes.

When Perry calls Social Security a Ponzi scheme, he’s referring to the structure of the program, which relies on new investors to ensure old investors receive a handsome return on their investment. Michael Tanner, senior fellow at the Cato Institute, explains in greater detail:

Social Security … forces people to invest in it through a mandatory payroll tax. A small portion of that money is used to buy special-issue Treasury bonds that the government will eventually have to repay, but the vast majority of the money you pay in Social Security taxes is not invested in anything. Instead, the money you pay into the system is used to pay benefits to those “early investors” who are retired today. When you retire, you will have to rely on the next generation of workers behind you to pay the taxes that will finance your benefits.

As with Ponzi’s scheme, this turns out to be a very good deal for those who got in early. The very first Social Security recipient, Ida Mae Fuller of Vermont, paid just $44 in Social Security taxes, but the long-lived Mrs. Fuller collected $20,993 in benefits. Such high returns were possible because there were many workers paying into the system and only a few retirees taking benefits out of it. In 1950, for instance, there were 16 workers supporting every retiree. Today, there are just over three. By around 2030, we will be down to just two.

As with Ponzi’s scheme, when the number of new contributors dries up, it will become impossible to continue to pay the promised benefits. Those early windfall returns are long gone. When today’s young workers retire, they will receive returns far below what private investments could provide. Many will be lucky to break even.

Eventually the pyramid crumbles.

So, sure, Social Security is not a Ponzi scheme insofar as the government is able to force investors to enroll, as well as to pay more when slowed population growth results in fewer investors — but, absent that, it is. Milton Friedman put it this way in a 1999 New York Times article: The “guaranteed” benefits of the entitlement program exist “solely on the expectation that future Congresses will honor promises made by earlier Congresses — what supporters call ‘a compact between the generations’ and opponents call a Ponzi scheme.” Charles Blahous, Ph.D., a member of the Board of Trustees of the Social Security Trust Fund, has also admitted the program is a Ponzi scheme:

Why does it make folks so angry to hear the truth? Communications consultant and former RNC research director Jeff Berkowitz has a theory. “The reason it’s so controversial is because it’s so exactly true,” Berkowitz said to The Daily Caller. “The more you expose the uncertainty, the more people become concerned about the safety of their investment.”

As I’ve written before, Perry’s comments aren’t problematic because they’re false: They’re problematic because Social Security is a popular program, because “the people want their treats” and because other politicians are willing to continue to pander. But Perry’s rhetoric is also enormously helpful because it’s generating this conversation, just as he hoped.

P.S. TheStreet.com is presently polling readers as to whether they think SS is a Ponzi scheme, in case you want to participate.


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Comment pages: 1 2

honest and he wont quit

chasdal on September 12, 2011 at 12:08 PM

Thats a good start.

Until they catch Perry in a lie, and bash him over the head with it.

portlandon on September 12, 2011 at 12:09 PM

The term “Ponzi scheme” attracts such attention because it does typically refer to a criminal enterprise. In that respect, the USA Today editorial board is right. Social Security is not illegal. But the board’s second point — that SS is not a Ponzi scheme because it hasn’t collapsed, because investors continue to invest — makes little to no sense. Social Security doesn’t have to attract investors with the soundness of its returns; the government mandates that every single worker invest in the program. If SS did have to attract investors, the program very well would collapse in true Ponzi-scheme fashion as soon as current workers found out they’d be lucky to receive as much in benefits as they invested in payroll taxes.

Made me giggle.

Dr Evil on September 12, 2011 at 12:13 PM

First, they are criminal enterprises, which Social Security is not.

Liberals keep going there. They no it’s a Ponzi scheme, so they play the legalistic point of view. Ridiculous…

jeffn21 on September 12, 2011 at 12:16 PM

But the program’s problems are largely the result of people living longer, and therefore collecting more in benefits, rather than some inherent structural shortcoming or constitutional failing.

I’d say people living longer is a “structural shortcoming” that was not anticipated (or ignored).

taznar on September 12, 2011 at 12:16 PM

That poll on the street allows unlimited voting, so I think someone kept clicking that SS isn’t a ponzi scheme.

redeye on September 12, 2011 at 12:16 PM

I seem to recall bho has said his ‘jobs bill’ will have cuts in ss taxes in it? How in the name of common sense will that help with funding this thing?
L

letget on September 12, 2011 at 12:17 PM

But the program’s problems are largely the result of people living longer, and therefore collecting more in benefits, rather than some inherent structural shortcoming or constitutional failing.

So, let me get this straight…..

The program pays out more than it takes in due to illogical assumptions about mortality rates? And this is not a structural problem? I wish I could buy an annuity that used their faulty assumptions.

Oh, and there is nothing in the constitution about social security. So you’re right, USA Today, there is no constitutional failing.

Just a fiscal one.

BacaDog on September 12, 2011 at 12:17 PM

USA Today: Hey, it ain’t a ponzi scheme ‘cuz it ain’t illegal (the government mandates it) and in the ponzi schemes the suckers lose ALL of their money, but in social security you’ll only lose 24% of your money!

Thanks USA Today for clearing THAT up.

PackerBronco on September 12, 2011 at 12:18 PM

I like him better already.

leftnomore on September 12, 2011 at 12:18 PM

I am 68 on social security and I will say it outright, social security is a Ponzi scheme.

Dasher on September 12, 2011 at 12:20 PM

The “criminal activity” argument is bullstuff. There are many ‘criminal activities’ you can’t do–unless you are the government. And just because 5 Justices said it’s constitutional doesn’t mean it is, so it may well be criminal activity.

cartooner on September 12, 2011 at 12:20 PM

This may be the first time I’ve seen a USA Today editorial cited in … well, anywhere.

Congratulations, USA Today.

YYZ on September 12, 2011 at 12:20 PM

“We must have a frank, honest national conversation about fixing Social Security”

“Fixing Social Security” is what all the candidates are saying. But if SS is a Ponzi scheme, why fix it? Isn’t the the usual procedure to stop such schemes – not repair them?

whatcat on September 12, 2011 at 12:20 PM

Honesty is the best policy

cmsinaz on September 12, 2011 at 12:21 PM

But the program’s problems are largely the result of people living longer, and therefore collecting more in benefits, rather than some inherent structural shortcoming or constitutional failing.

The stupidest sentence ever written in English.

Social Security is most certainly not a Ponzi scheme, which is an undertaking designed to swindle people out of their money by using incoming revenue to produce bogus investment returns to attract more money.

The second stupidest sentence ever written in English.

Sorry, Perry. Don’t hold your breath waiting for liberals to even address the issue coherently, much less make a proposal. They’ve obviously calculated that it’s in their best interests to demagogue the issue from hell to breakfast, even if they can’t even form a non-contradictory sentence in doing so.

HitNRun on September 12, 2011 at 12:22 PM

The basic problem is that Social Security is an insurance policy that has been sold as an investment plan. So if you change the pardigm, it all works. Like an insurance policy, you only get your retirement money if you need it, otherwise you don’t.

PackerBronco on September 12, 2011 at 12:22 PM

So Perry, are you or have you ever been for the idea of bi-national health care with mexico?

wheelgun on September 12, 2011 at 12:22 PM

He needs to offer an alternative or he’s screwed.

cpaulus on September 12, 2011 at 12:22 PM

75% of Street.com readers don’t think SSI is a Ponzi scheme.

This problem will never be fixed.

ramrants on September 12, 2011 at 12:22 PM

Ponzi schemes have two salient features. First, they are criminal enterprises, which Social Security is not. Second, they work only until people get wind of what is going on, at which point they inevitably collapse. Social Security’s finances are plainly visible for all to see

Three if you include the fact that Ponzi schemes are by choice and SS is mandated by law to take your money. Just a wee bit of difference.

VegasRick on September 12, 2011 at 12:24 PM

Social Security recipients who have retired recently, will receive a very low return on their “investment” into the scheme. If that money had been invested in real investments my income would be 2 to 3 times what I currently receive from the taxpayers of America. As one on social security I say privatize it. I have been saying that for 25 years.

Dasher on September 12, 2011 at 12:25 PM

Perry knew he’d start a kerfuffle with that statement and, as usual, he was right. Everybody thinks he gave them the hammer to hit him with, but he gave them something that will blow up in their hands. Go, Guv, gig’em!

cartooner on September 12, 2011 at 12:25 PM

Any candidate that says “SS is not a Ponzi scheme”, has lost.

faraway on September 12, 2011 at 12:26 PM

Social Security may pay out revenues as returns on investment, but, technically, it’s not a “Ponzi scheme” because it’s not illegal!! That’s all you’ve got to defend it?

Isn’t that a little like saying that the Obama administration has not been a nightmare, because, technically, we’re not asleep?

morganfrost on September 12, 2011 at 12:27 PM

honest and he wont quit

chasdal on September 12, 2011 at 12:08 PM

Lookee-I’m not a Palin supporter-for the primaries if she runs-either…but you’re starting to sound like s broken record.
Thanks.

annoyinglittletwerp on September 12, 2011 at 12:28 PM

Second, they work only until people get wind of what is going on, at which point they inevitably collapse

*Sheeh*

Social Security doesn’t have to attract investors with the soundness of its returns; the government mandates that every single worker invest in the program

Exactly. I’m 42 and many of my friends of my age and younger have “got wind” of the scam and would love to pull out and collapse it, only we’re not allowed too.

So SS is WORSE than a Ponzi scheme. It’s a Ponzi scheme where the con-man threatens to either physically harm or detain you if you refuse to pay in. So it’s more like a protection racket.

29Victor on September 12, 2011 at 12:28 PM

Very interesting tactic here by Gov. Perry. Instead of running away from his comments he is going all-in. I think he is smart.

Democrats will not be able to resist what looks like an easy “win” to make this election a referendum on Social Security. But if the Man From Hopenchange ends up running as the last defender of the New Deal, the whole dynamic of the election changes. Millions of young people did not jump on the Obama bandwagon in 2008 to defend the status quo, and they know they aren’t going to get any Social Security by the time they are 65. If even a substantial portion of them either stay home or vote for Perry, Perry will win in a landslide.

rockmom on September 12, 2011 at 12:29 PM

Fringe.

mythicknight on September 12, 2011 at 12:29 PM

Much more interesting is the article in today’s WSJ about Perry & his coverup of the Willingham execution. It paints a pretty ugly picture of Slick Rick.

JA on September 12, 2011 at 12:29 PM

Ponzi schemes have two salient features. First, they are criminal enterprises, which Social Security is not.

I’ve heard that one before. Caesar is exempt from Caesar’s laws. It is a pretty weak argument that starts by saying that since the government created the program, it cannot be illegal.

Vashta.Nerada on September 12, 2011 at 12:30 PM

He needs to offer an alternative or he’s screwed.
cpaulus on September 12, 2011 at 12:22 PM

Not necessarily, but if this is all he offers – vague talk about “fixing” it – I don’t see much difference between his position or that of other candidates. But, again, I’m puzzled – why would you fix a Ponzi scheme?

whatcat on September 12, 2011 at 12:31 PM

So Perry, are you or have you ever been for the idea of bi-national health care with mexico?

wheelgun on September 12, 2011 at 12:22 PM

Here we go again!

Who wants to make bets on what’s next

The fence? E-verify? I know, Gardasil!

cozmo on September 12, 2011 at 12:32 PM

Second, they work only until people get wind of what is going on, at which point they inevitably collapse.

\

The second point assumes that one could voluntarily stop participating. Americans are required to participate, even though they know what is going on. Another logic fail.

Vashta.Nerada on September 12, 2011 at 12:33 PM

SS is WORSE than a Ponzi scheme. It’s a Ponzi scheme where the con-man threatens to either physically harm or detain you if you refuse to pay in. So it’s more like a protection racket.

29Victor on September 12, 2011 at 12:28 PM

Well put.

Kataklysmic on September 12, 2011 at 12:35 PM

75% of Street.com readers don’t think SSI is a Ponzi scheme.

This problem will never be fixed.

ramrants on September 12, 2011 at 12:22 PM

See my post above. You can click as many times as you want to vote. I think the USA Today editorial board has their intern staff clicking their mouses all day.

redeye on September 12, 2011 at 12:36 PM

Social Security isn’t a criminal enterprise because the govt is running it. If it were run in the exact same way, but eeeeevil Wall St was running it, the USA Today would be demanding indictments for the SS Administrators.

angryed on September 12, 2011 at 12:37 PM

First, they are criminal enterprises, which Social Security is not, because the government is mandating it. Second, they work only until people get wind of what is going on, at which point they inevitably collapse, unless the government is mandating ‘investment’.

So it’s kinda like a ponzi scheme, but much worse because people are mandated to participate and are forbidden to leave. Nice defense USA Today.

forest on September 12, 2011 at 12:37 PM

The basic problem is that Social Security is an insurance policy that has been sold as an investment plan. So if you change the pardigm, it all works. Like an insurance policy, you only get your retirement money if you need it, otherwise you don’t.

PackerBronco on September 12, 2011 at 12:22 PM

A portion of social security is an insurance plan. That portion is called disability income, the other part that may be considered insurance are survivor benefits. But basic social security is not an insurance plan, since everyone who has worked the required number of quarters and attained the right age is eligible for benefits.

There are portions of social security benefits that are pretty ridiculous; When I retired my youngest daughter received social security, and she was getting about 65% of what I was receiving. She continued to receive that benefit until she graduated from high school.

Dasher on September 12, 2011 at 12:38 PM

Any candidate that says “SS is not a Ponzi scheme”, has lost.
faraway on September 12, 2011 at 12:26 PM

Reading his short op piece I noted Perry has avoided using the term “Ponzi scheme”.

whatcat on September 12, 2011 at 12:38 PM

How I wish he was better on illegal immigration.

ctmom on September 12, 2011 at 12:38 PM

Gov. Perry to seniors: Suckers…

Seniors: Eh? whats that sonny? You’re gonna have to speak up. Worked in a water-well tank factory for forty years, that clangin’ metal machinery sure can ruin your hearin’ after that long… why I remember back in 19…..

Gov. Perry interrupts: I SAID YOU ARE SUCKERS… RUBES… FOOLS, CHUMPS… SCHLEMIELS… GET IT? NOW CAN I COUNT ON YOUR VOTES COME NOVEMBER?

Seniors: How rude…

Gov. Perry: I SAID…CAN I COUNT ON YOUR VOTES COME NOVEMBER?

equanimous on September 12, 2011 at 12:07 AM

equanimous on September 12, 2011 at 12:38 PM

The poll is currently at about 75% on the “not a Ponzi scheme” side.

Amazing. What will it take for people to wake up to the truth in this nation?

RedNewEnglander on September 12, 2011 at 12:40 PM

I wish SS were a true Ponzi scheme. I would have lost everything I’ve already put in. But once I was on to the con, I could walk away. Lesson learned.

Instead I know it’s a scam, but I still have to give the charlatans my money for the next 20-30 years.

angryed on September 12, 2011 at 12:42 PM

equanimous on September 12, 2011 at 12:38 PM

Doubling down on stupid does not make it any more accurate.

VegasRick on September 12, 2011 at 12:42 PM

The poll is currently at about 75% on the “not a Ponzi scheme” side.

Amazing. What will it take for people to wake up to the truth in this nation?

RedNewEnglander on September 12, 2011 at 12:40 PM

Online polls also show Ron Paul will be the next president. As they did in 2008.

angryed on September 12, 2011 at 12:43 PM

Here we go again!

Who wants to make bets on what’s next

The fence? E-verify? I know, Gardasil!

cozmo on September 12, 2011 at 12:32 PM

lib

wheelgun on September 12, 2011 at 12:43 PM

Much more interesting is the article in today’s WSJ about Perry & his coverup of the Willingham execution. It paints a pretty ugly picture of Slick Rick.

JA on September 12, 2011 at 12:29 PM

If you know the whole story, it doesn’t. But then you’re aren’t interested in anything that shed light on the truth.

cartooner on September 12, 2011 at 12:44 PM

So Perry, are you or have you ever been for the idea of bi-national health care with mexico?

wheelgun on September 12, 2011 at 12:22 PM

Captain Red Herring has arrived.

fossten on September 12, 2011 at 12:44 PM

Doubling down on stupid does not make it any more accurate.

VegasRick on September 12, 2011 at 12:42 PM

the man is calling seniors a bunch of rubes…and texpecting them to vote for him…

equanimous on September 12, 2011 at 12:44 PM

annoyinglittletwerp on September 12, 2011 at 12:28 PM

but she did quit~! i let it alone until the ‘nistas started w/ the dishnest crap on perry, the lies about amnesty, the letter supporting hillarycare, and tarp. if they are gonna spam lies about perry i’ll just tell the truth about palin.

chasdal on September 12, 2011 at 12:44 PM

Online polls also show Ron Paul will be the next president. As they did in 2008.

angryed on September 12, 2011 at 12:43 PM

Online pollsters only hire folks with Parkinsons – better numbers.
/

VegasRick on September 12, 2011 at 12:44 PM

By contrast, former president George W. Bush put forth solidly Republican ideas on Social Security overhaul while showing a healthy respect for the program and the problems that it solved.

Could the super-smart editorialists remind us all how that worked out?

/s

cs89 on September 12, 2011 at 12:44 PM

So it’s more like a protection racket.

29Victor on September 12, 2011 at 12:28 PM

Security… protection… we’re splitting hairs here./libz

John the Libertarian on September 12, 2011 at 12:45 PM

equanimous on September 12, 2011 at 12:38 PM

I don’t think he’s saying it exactly like that. ;) I think honesty is important, but of course he has to point the finger at congress and the system for the deceit. We elect them to do right by us and they just haven’t been, and that includes Republicans who have been perpetuating the lie. If he says that we’ve been lied to, outlines the lie and shows us his solution, I see that as a great thing.

kerrhome on September 12, 2011 at 12:46 PM

Still drinking the Perry Kool-Aid.

His adoring fans try to rationalize the “Ponzi Scheme” comment as if it were a well thought out critique. He’s just ranting.

If he is so honest why dont his supporters rationalize the other dozen things he has said about SS.

Will he stand by calling it a monstrous lie, like a disease, a mistake from the beginning, a failure by any measure, fraudelent.

Dems will make him a whipping boy next October and Obama will win Florida and be re-elected.

swamp_yankee on September 12, 2011 at 12:46 PM

Very interesting tactic here by Gov. Perry. Instead of running away from his comments he is going all-in. I think he is smart.

rockmom on September 12, 2011 at 12:29 PM

Absolutely!

csdeven on September 12, 2011 at 12:47 PM

“…the program’s problems are largely the result of people living longer, and therefore collecting more in benefits, rather than some inherent structural shortcoming or constitutional failing.”

Note to USA Today Editorial Board:
Social Security started in 1935. That was 76 years ago. If current demographic statistics mean that people are living much longer than than was originally designed in Social Security’s 1935 mathematical financial viability model, then this IS a structural shortcoming simply because that model urgently needs revision to reflect the reality of 2011, NOT the reality of 1935.

“In 1950, for instance, there were 16 workers supporting every retiree. Today, there are just over three. By around 2030, we will be down to just two.”

Question for Michael Tanner and/or the CATO Institute:
Does your calculation of 3 workers supporting every retiree take into account the under-employed and unemployed who are no longer incorporated into the Federal employment statistics? I’ve seen other data suggesting the number is really only 2 workers per retiree RIGHT NOW.

Shirotayama on September 12, 2011 at 12:47 PM

Tim Russert:Everyone knows Social Security, as it’s constructed, is not going to be in the same place it’s going to be for the next generation, Democrats, Republicans, liberals, conservatives.”
Chris Matthews: “It’s a bad Ponzi scheme, at this point.”
Tim Russert: “Yes.”

Exactly, where does Perry walk back the “Ponzi scheme” meme ?
A “Ponzi scheme” is not financially sound and sustainable for the long term. Just calling it a “Ponzi scheme” doesn’t mean that it doesn’t have a good purpose, I mean, who would join in any “Ponzi scheme” unless they thought there was some good to be had .. at least for themselves. Rick Perry’s piece in USA Today calls for a conversion of this “Ponzi scheme” into something else.

America’s goal must be to fix Social Security by making it more financially sound and sustainable for the long term.

J_Crater on September 12, 2011 at 12:48 PM

the man is calling seniors a bunch of rubes…and texpecting them to vote for him…

equanimous on September 12, 2011 at 12:44 PM

So he should say SS is just fine and talk about other things? There is no easy way to say that our government has been lying to us and that we are in a lot of trouble. The truth hurts. Seniors are adult enough to handle the truth. Polls are showing that.

kerrhome on September 12, 2011 at 12:48 PM

And I STILL want to know why nobody’s talking about Medicare, too.
From what I understand, its projected shorftalls DWARF Social Security’s.

Shirotayama on September 12, 2011 at 12:48 PM

Maha Rushie today warns Romney and Bachmann to lay of the Ponzi attacks on Perry because they have too many Ponzi-like skeletons already in their own closets… plus it plays into the hands of the leftists. I agree with that.

Perry’s Ponzi scheme is to social security as Palin’s death panels was to Øbamacare. It sets the terms of debate.

Perry’s rhetoric is also enormously helpful because it’s generating this conversation, just as he hoped.

Hopefully Palin will be a Perry campaign consultant.

petefrt on September 12, 2011 at 12:48 PM

Would that SSA ‘invest’ but it CAN’T INVEST its money goes into the general fund and a few IOUs get put in that the Treasury guarantees to pay out at some future date, if it has the money. So the money isn’t ‘there’, it is just a means of taxing current and younger workers to pay off older workers who reach an age set by government for ‘retirement’.

Why does government get to set a ‘retirement’ age? Does this age have an actual meaning, a sudden ‘freshness expires’ sign that appears over everyone at that age or older?

It is a petty tyranny to say that you must retire at a certain age to get benefits. It is a grand tyranny to make the young and relatively poor pay for the retirments of those who are older, in prime earning years and, presumably, wiser. That is the slap in the face to the wisdom of the old, to say you can’t figure out your own life and how to lead it, and the young to say that they are incapable of tending the old. Both are destructive to the society as much as the cost is destructive to the budget.

This is far worse than any Ponzi Scheme due to the factor of coercion involved. The deceit on the part of those backing it is standard for such schemes… and yet federal regulations on securities and exchange of value are never leveraged against those who run it, even though they are not exempted from such laws.

Strange, that.

ajacksonian on September 12, 2011 at 12:49 PM

Much more interesting is the article in today’s WSJ about Perry & his coverup of the Willingham execution. It paints a pretty ugly picture of Slick Rick.

JA on September 12, 2011 at 12:29 PM

I don’t believe Winningham was innocent. He even told his ex-wife he did it, before he died. When he was on the gurney, waiting to die, he cursed her, gave some shout-outs to his death row homies, and then went into a stream of expletives, this according to a DMN article I read a couple of years ago.

Ward Cleaver on September 12, 2011 at 12:49 PM

O/T hahaha!!! A study just found that children 4 years old were noticeable dumber after watching 9 minutes of Sponge Bob!

csdeven on September 12, 2011 at 12:50 PM

How I wish he was better on illegal immigration.
ctmom on September 12, 2011 at 12:38 PM

Perhaps he thinks an ongoing steady flow of illegals will help ‘fix” Social Security.

whatcat on September 12, 2011 at 12:50 PM

Perhaps he thinks an ongoing steady flow of illegals will help ‘fix” Social Security.

whatcat on September 12, 2011 at 12:50 PM

Yeah, while they are at it, they will file for EIC and take $1000′s of free federal money for each child. Which many already do.

csdeven on September 12, 2011 at 12:53 PM

lib

wheelgun on September 12, 2011 at 12:43 PM

Golly capgun, ya’ smoked me out.

cozmo on September 12, 2011 at 12:53 PM

Second, they work only until people get wind of what is going on, at which point they inevitably collapse.

I know several young people in their early 20′s, late teens, who are pretty po’d about having to pay FICA, because they don’t believe they will ever receive social security. They certainly wouldn’t pay into the system if they weren’t forced to do so. I think peole are getting wind of what’s going on. Perhaps it’s better described as a government-mandated and enforced Ponzi scheme?

mbs on September 12, 2011 at 12:54 PM

honest and he wont quit

chasdal on September 12, 2011 at 12:08 PM

Heh! I’ll have to see more vetting of Perry before I’m sure he is honest. It’s rarely a quality politicians possess.

As for the quitting comment, you could be correct. With the ‘pay to play’ favors and promises Perry has with his donors it would probably not be in his best interest to let them down.

Perry could end up at the bottom of a lake wearing cement shoes.

Also, didn’t Ed Morrissey write this same type of article about four months ago about the ‘straight-shooting’ Tim Pawlenty?

chief on September 12, 2011 at 12:58 PM

I don’t believe Winningham was innocent. He even told his ex-wife he did it, before he died. When he was on the gurney, waiting to die, he cursed her, gave some shout-outs to his death row homies, and then went into a stream of expletives, this according to a DMN article I read a couple of years ago.

Ward Cleaver on September 12, 2011 at 12:49 PM

If that’s the case, then why was Perry so intent on shutting down the investigation after the execution? According to members of the investigating panel, it was because he knew it was going to turn out to be a huge embarrassment to him.

JA on September 12, 2011 at 12:58 PM

Why does it make folks so angry to hear the truth?

Think of this in terms of a person who receives the very bad news from his doctor that he is suffering from an illness that will be terminal unless very drastic action is not taken very quickly. The stages of grief have been well identified:
1. Shock & Denial;
2. Pain & Guilt;
3. Anger & Bargaining;
4. Depression, Reflection, & Loneliness;
5. The Upward Turn;
6. Reconstruction & Working Through;
7. Acceptance & Hope.

The Democrats and much of the MSM remain locked in Stage 1 (Shock & Denial). I suspect that most seniors who are already on SS are in Stage 2 (Pain & Guilt), Stage 3 (Anger & Bargaining), or State 4 (Depression, Reflection, & Loneliness). They are angry at politicians who they think are trying to take away income they need to get by on, but deep down they know this is like being angry at the doctor who is simply delivering very bad news, but news they need to hear. At the same time, they are angry at the possibility of the entire structure collapsing, leaving them and their children/grandchildren in a much worse situation. A lot of Republican politicians (including several in the current crop of Presidential contenders) are vacillating between Stages 3 and 4. Gov. Perry is already at Stage 5 and ready to move into Stage 6.

I have no hope that Democrat politicians will ever move out of Stage 1, and the MSM will never budge out of Stage 1 until it is a fait accompli. The only chance to save the patient is for the Republicans to stand united and speak with one voice the things that the patient needs to hear. I may be naive, but I have a lot more faith in the American people to not only understand the seriousness of the problem but to have the fortitude to demand a solution that not only protects seniors, but does not bankrupt their grandchildren.

Harrell on September 12, 2011 at 1:05 PM

JA on September 12, 2011 at 12:58 PM

embarrassing how?? he couldnt do anything to stop the execution.

chasdal on September 12, 2011 at 1:05 PM

JA on September 12, 2011 at 12:58 PM

embarrassing how?? he couldnt do anything to stop the execution.

chasdal on September 12, 2011 at 1:05 PM

It doesn’t matter. Perry haters concerned uncommitted voters are grasping at straws. This is just another

cozmo on September 12, 2011 at 1:09 PM

If that’s the case, then why was Perry so intent on shutting down the investigation after the execution? According to members of the investigating panel, it was because he knew it was going to turn out to be a huge embarrassment to him.

JA on September 12, 2011 at 12:58 PM

That was the purpose of the “investigation”–to try to embarrass Perry. It was a bogus attempt for political points by Perry opponents. This was well after the execution. Perry replaced the panel members because their terms were up, he can’t just fire them any time he wants. And their purpose is not to establish guilt or innocence or anything to do with capitol punishment. In other words, they were exceeding their authority by trying to play politics.

cartooner on September 12, 2011 at 1:10 PM

SS is not illegal only because it is a government program. Any private group tries to do this and lets see how fast they are shut down and put in prison.

AndrewsDad on September 12, 2011 at 1:10 PM

cozmo on September 12, 2011 at 12:53 PM

smart people for open borders…yeah!

wheelgun on September 12, 2011 at 1:11 PM

The piece appeared opposite an editorial from the USA Today board. The view of the paper? “Social Security far from a Ponzi scheme.” The board writes: blah, blah, BS, blah…

Yeah, well they should have invested in a bit of googling and/or research to consider the following facts:
1) It has NOT been working ever since it started. The govt admitted as much here http://www.ssa.gov/history/reports/trust/tf1941.html

2) Equally laughable is their 1941 estimate that between 1986 & 1990, the US would collect $2.6 billion in income taxes, although they did note they would payout $4.1 billion

3) Accounting for the 3.95% (http://www.dollartimes.com/calculators/inflation.htm) rate of inflation between 1940 & 2011 dollars, that $2.6 billion in income taxes would be $40.7 billion, and the 4.1 bil in SS payouts is %64.2 billion. Now tell me if this is anywhere close to reality????

4) The reason for the above numbers is that SSA was making the case that 2% SS taxes would not be enough to cover the system and would need to be raised. Here we are now in 2011 and you’re paying over 13%. Yep, you’ve come a long ways from 2%, baby. What next? By 2020, we’ll need to be taxed 17%? And by 2030, taxed 31% as the SS worker to retiree ratio spirals out of control? IOW, by the time my kids settle into the workforce, they can expect to pay 60% or more in total federal taxes? No thanks, change the funding/payout structure now (hey, can I repeat “Transform SS Now” ad nauseum).

5) Just for comparison; according to this 1944 report (https://www.socialsecurity.gov/history/aja144.html):

From the early part of 1940 to the middle of 1943, average weekly wages in manufacturing establishments covered by State unemployment compensation laws increased 71 percent, from $26 to $45; average weekly wages in the combined group of industries we have classified as white-collar increased 21 percent, from $24 to $29. However, average wages in the transportation, communication and other public utilities industry group, in which most of the employees are non-white-collar workers, increased only 32 percent, while in several industries which are manned primarily by white-collar workers, such as real estate and law offices, professional and social service agencies and non-profit organizations, the increase was 40 or 50 percent.

6) So looking at manufacturing, let’s take the average, $34/week or $1200/yr when rounded for simplicity. The 2% rate on 1200 is $24 or $302.32 in 2011 dollars. Meanwhile, 13.6% on the average $50K salary is $6800, and yet, SS is in the red already after the last fix.

7) Yep, how’s that SS hope and change promised by FDR working for us?

8) Keep on talking about SS, Mr. Perry. America needs to hear it often. It’s quite telling that Mittness relesed his 57-point plan just before the last debate with nary a mention of SS. The dude can’t get a break. Laying low for so long, he finally thot it was safe to come out and now, no one is talking about his plan and instead talking about the one thing not in his masterplan.

Exit question: How soon before Mittwit flip-flops and starts talking about the need to fix SS? I’d say by next Sunday.

AH_C on September 12, 2011 at 1:13 PM

The very ponzi scheme perry is railing against he’s helping to destroy by allowing a southern invasion.

wheelgun on September 12, 2011 at 1:13 PM

embarrassing how?? he couldnt do anything to stop the execution.

chasdal on September 12, 2011 at 1:05 PM

Yes, Perry could and he didn’t. Three nationally recognized arson experts found no evidence of arson, but Rick Perry refused to grant a stay of execution so that the new findings could be considered.

JA on September 12, 2011 at 1:13 PM

It doesn’t matter. Perry haters concerned uncommitted voters are grasping at straws. This is just another

cozmo on September 12, 2011 at 1:09 PM

So the fact that a possibly innocent man was executed is “grasping at straws” now, huh?

JA on September 12, 2011 at 1:15 PM

a 30 day stay is the most he could do. the guy had been on death row since 1992. the new findings had been considered and were crap. it was bleeding heart groups that oppose a death penalty and always seem to find innocent “victims” on death row.

chasdal on September 12, 2011 at 1:16 PM

The very ponzi scheme perry is railing against he’s helping to destroy by allowing a southern invasion.

wheelgun on September 12, 2011 at 1:13 PM

We ended that way back in 1836, then we joined you whiners.

cartooner on September 12, 2011 at 1:16 PM

I guess none of you dingleperrys helped us melt the phones when bush was pushing for amnesty.

wheelgun on September 12, 2011 at 1:17 PM

So the fact that a possibly innocent man was executed is “grasping at straws” now, huh?

JA on September 12, 2011 at 1:15 PM

That, and if you think there is a possibility that Willingham was innocent, you are delusional. If you think Perry could have done anything about it, you are ignorant. And, if you think what was done was a cover up, you are ready for the tinfoil hat brigade.

cozmo on September 12, 2011 at 1:18 PM

Perry picked up a MEGA endorsement Today!!!!

portlandon on September 12, 2011 at 1:19 PM

chasdal on September 12, 2011 at 12:44 PM

Thank god we have you around to tell the truth. Palin quit? Who knew?

alwaysfiredup on September 12, 2011 at 1:20 PM

But the program’s problems are largely the result of people living longer

Will Obamacare take care of that little problem?

Ponzi schemes have two salient features. First, they are criminal enterprises, which Social Security is not. Second, they work only until people get wind of what is going on, at which point they inevitably collapse. Social Security’s finances are plainly visible for all to see.

That assumes people have a choice in whether to contribute to the scheme and they chose to continue no matter the risk.

Chip on September 12, 2011 at 1:22 PM

and now the lsm is focusing on the perry’s perks…

desparate…

cmsinaz on September 12, 2011 at 1:22 PM

That, and if you think there is a possibility that Willingham was innocent, you are delusional. If you think Perry could have done anything about it, you are ignorant. And, if you think what was done was a cover up, you are ready for the tinfoil hat brigade.

cozmo on September 12, 2011 at 1:18 PM

I guess all that applies to the WSJ, too, then, since that is the conclusion they reached :)

JA on September 12, 2011 at 1:24 PM

The very ponzi scheme perry is railing against he’s helping to destroy by allowing a southern invasion.

wheelgun on September 12, 2011 at 1:13 PM

Your insults and distortions have now convinced me to join you in supporting Ron Paul.

Not really.

Vashta.Nerada on September 12, 2011 at 1:25 PM

and now the lsm is focusing on the perry’s perks…

desparate…

cmsinaz on September 12, 2011 at 1:22 PM

It’s called vetting.

alwaysfiredup on September 12, 2011 at 1:25 PM

So the fact that a possibly innocent man was executed is “grasping at straws” now, huh?

JA on September 12, 2011 at 1:15 PM

Yawn. We have bigger fish to fry, than to worry about someone that had their full due process. If the man was innocent, may God have mercy on his soul. If not, ….

AH_C on September 12, 2011 at 1:27 PM

Yes, Perry could and he didn’t. Three nationally recognized arson experts found no evidence of arson, but Rick Perry refused to grant a stay of execution so that the new findings could be considered.

JA on September 12, 2011 at 1:13 PM

No, you don’t have facts. This expert did not say there was “no evidence of arson”, he merely said the fire could have been accidental, not that it was accidental Perry didn’t give a 30 day stay (which is all he could do) because he was given a new opinion, not new information. The Texas Board of Pardons and Paroles, the state appeals court, federal appeals court and the U.S.Supreme Court saw and rejected that expert opinion.

cartooner on September 12, 2011 at 1:29 PM

I guess all that applies to the WSJ, too, then, since that is the conclusion they reached :)

JA on September 12, 2011 at 1:24 PM

Since you didn’t provide a link, I don’t know. The DMN had this story last week (if it was about not releasing the conclusion on the Willingham case). They took no view, just stated the facts. The facts stand up much better than ignorant speculation.

cozmo on September 12, 2011 at 1:29 PM

Good job governor . . . and all those squishy, pandering, quasi Republicans and other conservatives out there need to take notice of what true integrity looks like and sounds like.

rplat on September 12, 2011 at 1:29 PM

but she did quit~! i let it alone until the ‘nistas started w/ the dishnest crap on perry, the lies about amnesty, the letter supporting hillarycare, and tarp. if they are gonna spam lies about perry i’ll just tell the truth about palin.

chasdal on September 12, 2011 at 12:44 PM

I think for every other politician in history it has been called resigning from office, but quit sounds worse so run with it as long as you can.

What were the lies spammed about Perry on these subjects? Although these are not the biggest problems I have with Perry, what were the lies?

I would like to hear from Perry or even a supporter about how he plans to close the huge looming Texas budget deficit. I know the last time Perry used Federal funds (Recovery Act) and a few accounting gimmicks, but this time the projected deficit is much, much larger.

Since the deficit is one of the biggest problems the country faces, I would love to hear how the possible GOP nominee plans to close the gap in his own state before we trust him with the nation’s budget deficit.

Maha Rushie today warns Romney and Bachmann to lay of the Ponzi attacks on Perry because they have too many Ponzi-like skeletons already in their own closets… plus it plays into the hands of the leftists. I agree with that.

petefrt on September 12, 2011 at 12:48 PM

I agree with this and agree with Perry on SS. Actually the current SS system is worse than a ponzi scheme because you are not forced to participate through a payroll deduction like you are with SS.

The key is finding an acceptable age to start a new SS program and not scare off the older voters. It will be tricky, but must be done. I like Perry’s tough talk, but he needs to assure voters he wants reform and not getting rid of the program altogether. That will be the needle he and the other candidates will need to thread.

Romney and Bachmann need to find another area to poke holes in Perry’s record. Outside of Texas, Perry is hardly known and is being hailed as the next great GOP saviour, but once his record is vetted the voters might find out that it’s not quite time to wash his feet with their tears and hair.

chief on September 12, 2011 at 1:29 PM

Gov. Perry,

Behing honest with the American people is not the smartest thing you could be doing. Remember, the American people are not that smart. The party that will always pass out more free money to people will demagogue you to death on this.

Really Right on September 12, 2011 at 1:29 PM

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