Social Security is a Ponzi scheme, says ... Chris Matthews

Has Chris Matthews started feeling tingles when he sees Rick Perry? After the debate, MSNBC hosts were aghast at Perry’s reaffirmation of his argument that Social Security in its present form is a Ponzi scheme, sucking cash from new entrants in order to fund payments to people at the top of the pyramid. Mitt Romney has spent the last two days blasting Perry for his blunt talk, and other conservative analysts have fretted that such rhetoric would make Perry unelectable in a general-election matchup against Barack Obama. Now, one of Obama’s biggest media fans — and one who idolizes Social Security’s creator, FDR — says Perry is right:

Matthews first put forth what he thought Social Security was originally intended to be: “You pay for it while you work. When you retired and have no other form of income, this will help you out. In fact, a lot were impoverished in the old days without Social Security. It’s a great anti-poverty program. But then people started to live past 65. Even the great Franklin Roosevelt didn’t make it to 65. In those days, if you made it to 65, you were lucky. You got a few bucks on Social Security.”

Then he put forth what it has become: “Today, lots of people fortunately make it past 65,” he said. “They live into their 80s and 90s. They’re still getting checks. The system doesn’t work that way anymore. It’s not as healthy as it once was. So, how does a Republican deal with the fact it is a Ponzi scheme in the sense that the money that’s paid out every day is coming from people who have paid in that day. It’s not being made somewhere.”

In all the handwringing on both sides of the aisle over Perry’s remarks, no one has made the case that Social Security isn’t a Ponzi scheme and isn’t broken. Thomas Friedman melted down when confronted over Perry’s remarks by Rick Santelli over this basic point. Any system that floats benefits to the top from funds seized at the bottom is a pyramid or Ponzi scheme, with or without the illegality. And it’s actually worse, since the government forces us to participate even though it has become clear that our money is not going to our own benefits any longer but subsidizing those of others.

If Chris Matthews can admit that Social Security is a fraud and a Ponzi scheme, why is it so tough for conservatives to do so?

Update: David Freddoso gives Perry “two cheers” for essentially echoing Ronald Reagan and a generation of Republican leaders:

So why are people like Karl Rove and former Massachusetts Gov. Mitt Romney attacking Texas Gov. Rick Perry for repeating the same truth that Reagan and countless other Republicans have spoken for decades? In his book “Fed Up!”, and then again at Wednesday’s Republican debate at the Reagan Library, Perry rightly labeled Social Security as a “Ponzi scheme.” Yes, it’s a provocative phrase but the Texas governor understands that most Americans have had it with mealy-mouthed political talk.

But instead of supporting Perry’s courage in speaking frankly about entitlements, the Romney campaign wants conservatives to believe that Perry’s “Ponzi” comment automatically disqualifies him from being the GOP nominee. If Republican primary voters buy that argument, it will be a disaster for our country’s fiscal future. The big three entitlements, Social Security, Medicare and Medicaid, add hundreds of billions to our federal debt every year. And the drain they are inflicting on our economy will only get worse. Why not speak bluntly about this fact?

Should Perry be specific about how he proposes to fix Social Security and insure the benefits of those who are or are nearing retirement? Absolutely — and no doubt he will in the days ahead. But so should all the Republican candidates, as well as Democrats like President Obama. Anything less is just business-as-usual gibberish from the professional politicians in Washington.

Let’s recall what Perry actually said, emphases mine:

PERRY: Well, I think any of us that want to go back and change 70 years of what’s been going on in this country is probably going to have a difficult time. And rather than spending a lot of time talking about what those folks were doing back in the ’30s and the ’40s, it’s a nice intellectual conversation, but the fact is we have got to be focused on how we’re going to change this program. And people who are on Social Security today, men and women who are receiving those benefits today, are individuals at my age that are in line pretty quick to get them, they don’t need to worry about anything. But I think the Republican candidates are talking about ways to transition this program, and it is a monstrous lie. It is a Ponzi scheme to tell our kids that are 25 or 30 years old today, you’re paying into a program that’s going to be there. Anybody that’s for the status quo with Social Security today is involved with a monstrous lie to our kids, and it’s not right.

So yes, Perry was talking about changing the program, and not eliminating it. He will have to follow up with a plan to do so, of course — but as Freddoso writes, Perry’s challenge will now force everyone else to do so as well. Isn’t that what elections are about?

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Jazz Shaw 10:01 PM on January 31, 2023