Monday, September 12, 2011

It is a Ponzie Scheme

Governor Perry is right Social Security is a legal Ponzie scheme. Both liberals and conservatives have described it as such. Stanley Kurtz has done a little research and the first person to call it a Ponzie Scheme was liberal Newsweek economics columnist and Nobel laureate Paul Samuelson in 1967.... yes 1967:

Nobel laureate Paul Samuelson as perhaps the earliest use of the Social Security/Ponzi-scheme comparison in public argument. Samuelson was actually drawing on the Ponzi analogy to defend Social Security. His claim was that the perpetual succession of human generations establishes the conditions for a sustainable Ponzi scheme. Regardless of whether Samuelson was the first commentator to use the Ponzi analogy, he has clearly been the most influential. Policy briefs and books churned out by conservative think tanks such as Heritage and Cato have cited Samuelson’s Ponzi column for years.

Others who have called it a Ponzi Scheme:

Ben Whattenberg

the 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, hawkish on defense and otherwise alternately allied with the right or left, depending on the issue. Although many rejected Wattenberg’s claim in The Birth Dearth that a crisis of population decline loomed, time has vindicated his warning.

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.”

Jame C. Miller

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

Robert J. Shapiro

Shapiro was also a senior economic adviser to the presidential campaigns of Al Gore and John Kerry, and advised the presidential campaign and transition of Barack Obama as well...

The first section-heading in Shapiro’s piece reads “National Ponzi Scheme.” There Shapiro recalls Samuelson’s 1967 Ponzi comparison and suggests that, given today’s demographics, Social Security is“fiscally unsustainable” without major restructuring.

Jonathan Alter

Lamm is praised as a “truthteller” by Alter for being willing to say, among other things, that Social Security is a “well-meaning Ponzi scheme.” Today, of course, the very liberal Alter is a sympathetic biographer of Obama and one of the president’s most supportive media cheerleaders.
Michael Kinsley

Kinsley published a piece at Slate titled, “Social Security: From Ponzi Scheme to Shell Game.”

Max Frankel (former editor of New York Times and columnust)

“For more than 30 years, Presidents and Congresses have pretended that the Social Security Ponzi scheming between the generations will never explode in their lifetimes.” Argued Frankel, “ . . . the majority of voters have been misled.”
To read the entire Kurtz column click on the title for a link.