Liberals Think Social Security is a Ponzi Scheme Too

16 Sep


I fail to see how Rick Perry calling Social Security a “Ponzi scheme” is a big deal.  Liberals think it is too.  You don’t get much more liberal than Chris Matthews and Paul Krugman.  Here is Matthews admitting it:


Krugman admitted it in 1997 stating:

“Social Security is structured from the point of view of the recipients as if it were an ordinary retirement plan: what you get out depends on what you put in. So it does not look like a redistributionist scheme. In practice it has turned out to be strongly redistributionist, but only because of its Ponzi game aspect, in which each generation takes more out than it put in. Well, the Ponzi game will soon be over, thanks to changing demographics, so that the typical recipient henceforth will get only about as much as he or she put in (and today’s young may well get less than they put in).”

Rush Limbaugh listed numerous examples on his show recently of Social Security being referred to as a Ponzi Scheme over the past few decades:

1.  Liberal economist and Nobel laureate Paul Samuelson:  “A historical tour of the use of the Ponzi-scheme metaphor will make the point. Jonathan Last has already identified a 1967 Newsweek column by liberal economist and Nobel laureate Paul Samuelson as perhaps the earliest use of the Social Security/Ponzi-scheme comparison in public argument. … Samuelson’s idea that Social Security could best be understood as an enduring and rational Ponzi scheme grew out of his ‘overlapping-generations model,’ … Samuelson’s model implied that public debt in general, and Social Security in particular, could be financed over successive generations without major tax increases.

2.  “[T]he 1987 publication of Ben Wattenberg’s book The Birth Dearth. Wattenberg, who once worked for Lyndon Johnson and Hubert Humphrey, was by the late 1980s a centrist Democrat… In a U.S. News & World Report cover story excerpting The Birth Dearth, Wattenberg sums up his argument by saying: ‘In short, Social Security is a Ponzi game, a pyramid scheme, a chain letter.’ …

3.  In an August 1985 editorial commenting on Social Security’s 50th anniversary, the Wall Street Journal says the system was designed like a Ponzi scheme.

4.  “A July 1994 Chicago Tribune column by Cato Institute head Edward Crane dubs the offices of the Social Security Administration ‘home of the world’s largest Ponzi scheme.’

5.  A 1995 piece by conservative columnist Michael Barone argues that ‘…many more voters under 50 realize that Medicare and Social Security are Ponzi schemes in which the benefits they’re paying for today will be impossible to collect in the future without unthinkable tax increases.’ …

6.  In December of 1988, Ronald Reagan’s budget director, James C. Miller III, made news when he called Social Security a Ponzi scheme before an audience at the National Press Club.

7.  “In the fall of 1995, [liberal] Robert J. Shapiro published an article called ‘Rethinking Social Security: The New Deal’s Crowning Achievement Has Fallen and It Can’t Get Up’ … complains that Social Security, as currently structured, is crowding out funding for young children … [it’s a] ‘National Ponzi Scheme.’ …

8.  In January of 1996… William Raspberry … argues that ‘[Social Security] is, in important ways, like a massive Ponzi scheme …’

9.  [I]n May of 1996, liberal columnist Jonathan Alter published a piece in Newsweek suggesting that former Democratic Colorado governor and erstwhile Clinton supporter Richard Lamm might run for president as the candidate of Ross Perot’s Reform party. … Lamm is praised as a ‘truthteller’ by Alter for being willing to say … that Social Security is a ‘well-meaning Ponzi scheme.’ …

10.  Matthew Miller, a senior writer for The New Republic, published a long piece on the future of Social Security. Miller begins his TNR article by recounting the U.S. Senate hearing on Social Security at which he and others had just testified. … ‘Only a grinch could grumble about the most effective anti-poverty program in history; but only a fool would fail to ask whether the Ponzi scheme is sustainable, and at what price.’ …

11.  “Senator Simpson was making news at just this time by garnering attention for his proposed Social Security reforms with aggressive use of the Ponzi-scheme point: ‘This is a Ponzi scheme, and people don’t know that,’ said Simpson in August of 1996. …

12.  In December of 1996, liberal Michael Kinsley published a piece at Slate titled, ‘Social Security: From Ponzi Scheme to Shell Game.’ …

13.  March of 1998, then former New York Times executive editor Max Frankel turned one of his regular columns in The New York Times Magazine to the subject of Social Security. … ‘For more than 30 years, Presidents and Congresses have pretended that the Social Security Ponzi scheming [blah, blah, blah, blah, blah] the majority of voters have been misled.'”

Stanley Kurtz agrees in a piece in National Review Online:

“[I]t’s certain that Perry’s Ponzi-scheme claim is in no way original. Not only have a raft of conservatives called Social Security a Ponzi scheme over the years, quite a few very respectable liberals have done so as well. It is clearly wrong either to treat the Ponzi-scheme analogy as unprecedented or to rule it altogether out of legitimate public debate.




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