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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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

. . . and if the “American people” are really that stupid then they deserve the Democrats.

rplat on September 12, 2011 at 1:32 PM

Viva la Straight Talk Express!

dczombie on September 12, 2011 at 1:32 PM

rplat on September 12, 2011 at 1:32 PM

But I don’t!

Really Right on September 12, 2011 at 1:39 PM

Viva la Straight Talk Express!

dczombie on September 12, 2011 at 1:32 PM

As long as it involves him being honest about issues other than SS, I’m all for it.

alwaysfiredup on September 12, 2011 at 1:40 PM

chief on September 12, 2011 at 1:29 PM

Our deficit? The special session is over, the budget is balanced as it must be by law.

cartooner on September 12, 2011 at 1:40 PM

They’re problematic because Social Security is a popular program, because “the people want their treats

Really Tina? You mean treats, such as, hand outs, freebies?

Texas Gal on September 12, 2011 at 1:46 PM

the budget is balanced as it must be by law.

cartooner on September 12, 2011 at 1:40 PM

And I bet that’s all Perry’s doing too, huh.

alwaysfiredup on September 12, 2011 at 1:47 PM

Our deficit? The special session is over, the budget is balanced as it must be by law.

cartooner on September 12, 2011 at 1:40 PM

But it’s not actually balanced.

Texas Lawmakers Kick Tough Decisions Down the Road

The first accounting shift was to delay a $2.3 billion payment owed to public schools in 2012-2013 by one day, so that the bill isn’t technically due until 2014, thereby going into the next budget. The new budget also assumes there will be no growth in the number of school children in Texas, even though it is one of the fastest-growing states in the nation. Critics say the state will short school districts $2 billion that way.

Republican leaders came up with another $800 million on paper by ordering the Legislative Budget Board, essentially the Legislature’s accountants, to forecast a faster increase in land values in order to show more property tax income for schools.

Lawmakers also chose to ignore the estimated $4.8 billion extra it would need for the Medicaid health care program because of Texas’ fast-growing population and high poverty rate.

But the biggest problem lawmakers left unaddressed is the $8 billion structural deficit that recurs every two years. The deficit was created by a deal to lower property taxes while transforming the state’s business tax. It has never generated as much money as expected.

steebo77 on September 12, 2011 at 1:51 PM

Our deficit? The special session is over, the budget is balanced as it must be by law.

cartooner on September 12, 2011 at 1:40 PM

I said looming as in the next budget deficit. I said that the last budget was balanced with the help of ‘Recovery Act’ funds.

I will be curious to see how it will be balanced in 2012 and how Perry explains how he plans to accomplish it this time without federal money.

If he can explain how he will do this without the help of the federal government then Perry will have a strong talking point.

Of course, since the next budget will not have to be balanced before the end of the primary then it might not even be mentioned.

Either way, I’m hoping we are not going to be handing out more federal funds to balance state budgets or any type of bailouts or stimulus funds.

chief on September 12, 2011 at 1:58 PM

But even if nothing is done, the program could still pay about three-quarters of promised benefits at mid-century.

Hahaha. And that’s USA Today’s argument in favor of SS not being a Ponzi scheme? That 30 or 40 years from now it could, theoretically, pay back 75% of what it promised workers when it took their money?

Sad.

AZCoyote on September 12, 2011 at 2:10 PM

While Perry’s on his honesty kick, here are a few questions I’d like him to answer. Honestly, of course.

gryphon202 on September 12, 2011 at 2:10 PM

In this 1960 Supreme Court decision [Flemming vs. Nestor] Nestor’s denial of benefits was upheld even though he had contributed to the program for 19 years and was already receiving benefits. Under a 1954 law, Social Security benefits were denied to persons deported for, among other things, having been a member of the Communist party. Accordingly, Mr. Nestor’s benefits were terminated. He appealed the termination arguing, among other claims, that promised Social Security benefits were a contract and that Congress could not renege on that contract. In its ruling, the Court rejected this argument and established the principle that entitlement to Social Security benefits is not contractual right.

J_Crater on September 12, 2011 at 2:13 PM

Perry: 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.

OK, Governor Perry, speak to us frankly. What would you DO to ensure that Social Security can continue to pay its bills?

We’re listening, now we want specifics.

Steve Z on September 12, 2011 at 2:14 PM

While Perry’s on his honesty kick, here are a few questions I’d like him to answer. Honestly, of course.
gryphon202 on September 12, 2011 at 2:10 PM

In fact, if we’re praising honest, bold talk on Social Security here, as one of the headline links here illustrates, Bachmann was doing it last year. So, on this, Perry is somewhat late to the party.

whatcat on September 12, 2011 at 2:19 PM

Perry: 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.

OK, Governor Perry, speak to us frankly. What would you DO to ensure that Social Security can continue to pay its bills?

We’re listening, now we want specifics.

Steve Z on September 12, 2011 at 2:14 PM

I still have the question out there: If it is a Ponzi scheme, why would he want to “fix” it? That’s not the usual way Ponzi schemes are treated when they’re exposed.

whatcat on September 12, 2011 at 2:24 PM

I don’t like how Romney is going after Perry on this. He’s trying to paint him out to be extreme. This is a not so subtle wink and nod to those who view Tea Partiers who want real reform as nutcases.

I hope Romney falls flat on his face in the primaries. He’s David Brooks with better hair.

ardenenoch on September 12, 2011 at 2:55 PM

I learned a long time ago, anyone that makes statements like, “let me be honest” are people that are manipulators and liars. Sorry, just empirical experience

georgealbert on September 12, 2011 at 3:30 PM

Wow! I went to Thestreet.com to vote in their poll, and was shocked to discover that only 25% of those polled thought SS was a Ponzi scheme. If people go to the trouble to read what a Ponzi scheme actually is, they have to conclude that SS really is just that. It may not have been set up initially to work that way, but it sure as heck has morphed into that. This Country needs to wake up and smell the coffee, we really are in denial.

Susanboo on September 12, 2011 at 3:33 PM

At least Perry has retreated from the ‘monstrous lie’ stuff.

lexhamfox on September 12, 2011 at 3:35 PM

In fact, if we’re praising honest, bold talk on Social Security here, as one of the headline links here illustrates, Bachmann was doing it last year. So, on this, Perry is somewhat late to the party.

whatcat

Perry addressed it in his book, which came out last year. It’s not like he just started talking about it.

xblade on September 12, 2011 at 3:39 PM

I challenge USA Today to set up a retirement/investment/insurance program identical to social security, and see what happens.

xblade on September 12, 2011 at 3:53 PM

In fact, if we’re praising honest, bold talk on Social Security here, as one of the headline links here illustrates, Bachmann was doing it last year. So, on this, Perry is somewhat late to the party.
whatcat

Perry addressed it in his book, which came out last year. It’s not like he just started talking about it.
xblade on September 12, 2011 at 3:39 PM

My core point is that it’s hardly unique to Perry, Bachmann was on the same page and if we’re lavishing praise it should be applied all around. Also, going by his short oped, Perry offers the same vague answer as other candidates: “fix it”. That’s really not a novel idea, I think even some Democrats who see problems with long term solvency say the same thing.

whatcat on September 12, 2011 at 4:04 PM

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.”

Oh come on. Everyone knows that social security will need reform. Everyone of those Republicans up there will end up offering their own plans and those plans probably will not defer from one another a whole lot. In fact they will probably be a lot like the plan George Bush offered up a few years ago.

People did not get angry because they heard the truth, they got angry because Perry demagogued the issue and went out of his way to make people believe that he did not support the program at all..when obviously he does..I guess he is not going to let a little thing like the fact that he thinks it is unconstitutional get in the way.

So, in the end all that stuff was just a lot of sound and fury signifying nothing.

I figured this would happen. After all, he is Florida..got a put a lid on all that monstrous lie stuff.

Terrye on September 12, 2011 at 4:15 PM

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

Oh yeah, another on line poll…how about polling people on whether or not they support the program? Last I heard the numbers are coming in between 73% support and 84% support. Also most people do not want to see benefits cut or taxes increased for working people. But they do want the program to be there when they need it. The usual response we are used to seeing when it comes to entitlements. This is a link to a compilation of several polls on social security going back several years. Interesting.

Terrye on September 12, 2011 at 4:20 PM

People did not get angry because they heard the truth, they got angry because Perry demagogued the issue and went out of his way to make people believe that he did not support the program at all..when obviously he does..I guess he is not going to let a little thing like the fact that he thinks it is unconstitutional get in the way.

So, in the end all that stuff was just a lot of sound and fury signifying nothing.

Terrye on September 12, 2011 at 4:15 PM

Yup. And I’d add that the USA oped, where he shied away from invoking the P scam-word and replaced it with “fix it”, is a much damage control as anything else.

whatcat on September 12, 2011 at 4:22 PM

Perry addressed it in his book, which came out last year. It’s not like he just started talking about it.
xblade on September 12, 2011 at 3:39 PM

And what was his solution? Turning it back to the states, letting states opt out? I have not heard a lot of stuff about solutions, just the complaints about the system.

And as far as that is concerned even Herman Cain has a plan to deal with social security. It is not as if Perry came up with something no one else had thought of. He was just long on wrath and short on ideas.

Terrye on September 12, 2011 at 4:23 PM

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

Whatever happened to if it looks like a duck, walks like a duck and quacks like a duck?

It appears it’s not a criminal enterprise because the government does it. My opinion is if any program is criminal outside of government is also criminal inside of government. Theft is theft, by law or not.

bluefox on September 12, 2011 at 4:42 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 noticed that too. Similar to other Polls that don’t have security in place. Worthless.
When did the Street ever have that many viewers? LOL

bluefox on September 12, 2011 at 4:44 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

That so called Poll is a fraud; another Ponzi Scheme:-) The Street has never had that many viewers, good grief!!

bluefox on September 12, 2011 at 4:54 PM

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

Good point and I bet they don’t like it that they don’t have jobs either:-)

bluefox on September 12, 2011 at 4:57 PM

Private sector jobs are being destroyed continuously, so who is going to be contributing to this fund then? Wages are lower, so the % of S.S./Medicare tax is lower. Now the new “bill” is going to reduce the contributions again??

My son could add and subtract before 1st grade better than that.

What a crock. Oh and another thing, less contributions to your S.S. account means a smaller check even if there is anything there to collect.

bluefox on September 12, 2011 at 5:05 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

This has been used before. I read the whole story. Seems as if they will be finding a whisker out of place that Perry forgot when he shaved. Anything to nitpick:-)

bluefox on September 12, 2011 at 5:12 PM

Captain Red Herring has arrived.

fossten on September 12, 2011 at 12:44 PM

They are everywhere. Romney supporters or Democrats is my opinion.
Sarah Palin supporters don’t act that way in my opinion. We are civilized.

I’m going to avoid them and only discuss issues with sincere posters. I don’t intend to provide info to those that are not interested in the truth, just a waste of time.

bluefox on September 12, 2011 at 5:16 PM

Interesting article from Politico that HA linked to:

http://dyn.politico.com/printstory.cfm?uuid=C26C404F-8D9F-4DF3-AA9C-724E21672601

Yeah, I know Politico is very liberal, but if my governor did 10% of tha crap Perry does, he’d be impeached.

bw222 on September 12, 2011 at 5:20 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

I heard that segment today and was writing down all of the article references and there were so many, LOL

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

Very smart point, exactly.

bluefox on September 12, 2011 at 5:23 PM

Harrell on September 12, 2011 at 1:05 PM

Good info and layout of the issues. I agree that the R’s need to stop playing into the opposition’s hand. I see Presidency before Party and before Country in what is going on.

bluefox on September 12, 2011 at 5:31 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

That is all it is. It went on all last night on another thread. A waste of time in even responding.

bluefox on September 12, 2011 at 5:32 PM

I like Obama’s bold talk and specific plan to deal with the Social Security problem.

Oh wait….he doesn’t have a plan.

johnboy on September 12, 2011 at 5:32 PM

Please avoid red herrings.

bluefox on September 12, 2011 at 5:35 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

That is all it is. It went on all last night on another thread. A waste of time in even responding.

bluefox on September 12, 2011 at 5:32 PM

Well then don’t…but as far as I am concerned Perry walked back his comments because he knew he went too far..and of course his supporters will more than happy to let him to do that.

The thing is that George W. Bush started talking about social security reform back in 2005. Candidates like Bachmann and Romney and Cain have already talked about the need for reform in the program..Perry has not come up with anything new and different and daring.

He just used a little demagoguery to get some attention for himself and then when it got tough for him..he backed off.

Now we are hearing that we need to fix the program…not abandon it or turn it over to the states.

Sound and fury signifying nothing.

Terrye on September 12, 2011 at 6:03 PM

For too long, politicians have been afraid to speak honestly about entitlement reform

Tina define “too long”.

George Bush spoke honestly about entitlement reforms in 2005 and he had both houses.

Maybe it didn’t register with you because he didn’t call it a ponzi scheme.

Perry is not brave throwing out red meat to a red meat audience.

Why doesn’t Hot Air just get off the pot and endorse Perry that way your lack of objective writing will be above board.

Isn’t that what we always want from the MSM liberal media is to confess their bias.

sheryl on September 12, 2011 at 6:05 PM

I like Obama’s bold talk and specific plan to deal with the Social Security problem.

Oh wait….he doesn’t have a plan.

johnboy on September 12, 2011 at 5:32 PM

Oh wait…neither does Perry.
Maybe that’s why Jindel will be there….to talk him through it.

tencole on September 12, 2011 at 6:05 PM

The poll that Tina links on TheStreet asks

Is Social Security a Ponzi scheme?

72.88% say no.

Interesting.

I’m sure Romney’s & Bachmann’s internal polling is telling them the same thing.

sheryl on September 12, 2011 at 6:12 PM

Isn’t that what we always want from the MSM liberal media is to confess their bias.

sheryl on September 12, 2011 at 6:05 PM

Absolutely true. It kind of makes you wonder where some of these folks have been for the last few years.

Terrye on September 12, 2011 at 6:16 PM

sheryl on September 12, 2011 at 6:05 PM

Or maybe Bush should have called it a Ponzi scheme and directly challenge the legitimacy of the system.

Why doesn’t Hot Air just get off the pot and endorse Perry that way your lack of objective writing will be above board.

sheryl on September 12, 2011 at 6:05 PM

All you do is whine.

Daemonocracy on September 12, 2011 at 6:37 PM

Wonderful. Totally agree. Love the truth.

Now what?

Gonna be silly here and assume that it either needs to be fixed or stopped because Ponzi schemes are bad and SS is going down the toilet.

How? Where’s the plan?

kim roy on September 12, 2011 at 6:48 PM

Daemonocracy on September 12, 2011 at 6:37 PM

It’s calling out hypocrisy.

sheryl on September 12, 2011 at 6:51 PM

sheryl on September 12, 2011 at 6:51 PM

Hot Air is a Conservative blog. Mitt Romney is not a Conservative.

Understand?

Daemonocracy on September 12, 2011 at 6:59 PM

I still have the question out there: If it is a Ponzi scheme, why would he want to “fix” it? That’s not the usual way Ponzi schemes are treated when they’re exposed.

whatcat on September 12, 2011 at 2:24 PM

May this may help answer that question.

Perry has the unique experience of working with a retirement system that is the twin of Social Security. It is working. Baby Boomers not a problem. Future benefit assured. Paid benefits considerably more that those current paid by Social Security.

When Congress created the Social Security system they allowed academia to create their own system as long as it provided the same benefit.

Teachers in Texas obviously understood politicans well enough to know that they would not be able to resist the temptation of all that money, and elected to opt out of Social Security.

The teachers created a retirement system that was the twin to Social Security
, with one key difference. An admendment was added to the State Constitution that insured its funds were not borrowed or used. That also means that it was not saddled with other social programs like SSI or SS disablity and other social welfare drains. nor can someone that has not paid into the retirement fund, receive any benefits.

Teachers still pay all the other payroll taxes but the retirement/social security is paid to the Teacher Retirement.

The Texas Teacher retirement funds are invested and act much like an annuity where the more you pay in the more you get back when you retire. This is the teacher’s own money that they are getting back. I assume that Bush had something like this in mind and was derailed in short order. Maybe Perry does as well.
The stickler is cutting the unmentionalble welfare entitlements that the SS funds were borrowed to support and continue to do so.

I guess you don’t take taxes away from Congress without punishment. Texas teachers have no right to any Social Security benifits, even disablity that their retirement system does not have, even though an illegal can get full benefits and disability as soon as they get here. If the teacher works a second job or has or is self employeed and pays the social security tax they are still denied any benefits of Social Security, unless they give up their Texas retirement benefit. In otherwords the SS taxes teacher pay in are confiscated. SS still sends them an annual report listing how much the government confiscated.

The are some other differences as a result of keeping the politicians and everyone else out of the retirement cookie jar.

The results are a larger living benefit than SS retirees recieve.

There is the option of having the benefit continue to a spouse if the retiree dies.

There is a ten thousand dollar death benefit paid to the beneficiary. This does not stop benefits to a surving spouse.

Teachers entering the teaching profession are assured they will have a retirement benefit when they retire, requardless of what happens to Social Security.

Franklyn on September 12, 2011 at 8:40 PM

So, if it’s not a Ponzi scheme, there’s no need to require participation by law. I challenge Congress to allow people to opt out and take their contributions (hell, take 75% of their contributions) and see if the program is running in two months.

Over50 on September 12, 2011 at 9:06 PM

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.

I’m incentivized to become older even faster!

disa on September 12, 2011 at 9:28 PM

Teachers entering the teaching profession are assured they will have a retirement benefit when they retire, requardless of what happens to Social Security.

Franklyn on September 12, 2011 at 8:40 PM

Rubes!

disa on September 12, 2011 at 9:31 PM

How is the government behaving better than Enron?

Investing in Enron was a choice, though most certainly under false pretenses in most cases.

A working person must pay their SS tax, as well as their employer. There is no opting out.

Enron falsified their income statements, the government spent SS money which should have been held in trust, replacing them with worthless IOUs.

The principals of Enron were prosecuted, the politicians are free to lie, pay their political patronage with our money, and demagogue their way to re-election.

The mostly retarded politicians are defending their crimes and FDR’s legacy by saying SS is not “technically” a Ponzi scheme because it isn’t illegal. It is not illegal because politicians made a law to legitimize the theft of our money. If it was done in the private sector, there would be people in prison.

Long live the king.

LA Conservative on September 12, 2011 at 10:07 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

I see at least one person has refuted the insurance claim.
But I agree with you.
From my historical reading regarding the FDR regime & the set up of SS, it most certainly was modeled after insurance.
I believe it was in Jim Powell’s book, FDR’s folly, that he discusses this.
Note in 1940, the Temporary National Economic Committee (TNEC)in a report of theirs recommended that the Securities & Exchange Commission investigate life insurance companies. The report was entitled : A Study of Legal Reserve Life Insurance Companies. It was feared Congress was going to use this notion of Social Security as a way to take over life insurance companies.
So to the poster who refutes this, the premise for SS as a life insurance policy masquerading as a retirement scheme most certainly does hold water.

Badger40 on September 13, 2011 at 7:35 AM

Referring to the illegality of SS & other programs the federal govt is overseeing, just bcs the govt is engaging in activity they consider legal does not make it so.
As far as I’m concerned, anything the federal govt does that is not part of its enumerated powers is ILLEGAL & they have no right to do these things.
You want the Fed to do something that’s not enumerated, come up with a Const Ammendment! That’s what that process is FOR.
Otherwise, the states are to have the rest of the nonenumnerated powers & that’s that.
But of course there are many who will kibbitz on this.
They are the same ones who dismiss the 10th ammendment, tho many founders insisted upon its inclusion bcs they were extremely afraid that the Fed was going to assume powers that it was prohibited from exercising.
And gee, look how that turned out.

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.

Dasher on September 12, 2011 at 12:38 PM

Perhaps the current functioning of it is not ALL like one, and in SSD you are right that it does function that way.
But please note my response above to PackerBronco.
SS was originally used as an alternative to life insurance in some ways.

Badger40 on September 13, 2011 at 7:43 AM

I wonder if Perry is going to be honest about his belief that if you sneak into the country and avoid detection for three years, you deserve all the benefits that American citizens get.

Capt.Herp on September 14, 2011 at 9:19 AM

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