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Glenn Kessler (Washington Post): …. “It is a monstrous lie. It is a Ponzi scheme to tell our kids that are 25 or 30 years today you’re paying into a program that’s going to be there.” – Gov. Perry
Perhaps the governor does not know the dictionary definition of a Ponzi scheme. Here’s what Merriam-Webster says: “An investment swindle in which some early investors are paid off with money put up by later ones in order to encourage more and bigger risks.”
This is a frequent mistake politicians make when talking about Social Security. It is not an investment vehicle; it is intended to provide income security as well disability and life insurance. Just more than 60 percent of the 54 million beneficiaries are retired workers; the rest are disabled workers, dependents or survivors.
Social Security is a pay-as-you-go system, which means that payments collected today are immediately used to pay benefits. Until recently, more payments were collected than were needed for benefits. So Social Security loaned the money to the U.S. government, which used it for other things. In exchange, Social Security received interest-bearing Treasury securities. The value of those bonds is now about $2.6 trillion.
In any case, Perry is wrong to label Social Security a Ponzi scheme. Ponzi schemes ultimately go bust and everyone (except possibly early investors) generally loses their money. Social Security faces a long-term funding issue, but one that most experts say is manageable. After all, the Social Security actuary says that Social Security’s shortfall is 0.7 percent of the gross domestic product over the next 75 years.
Jonathan Chait: …. Perry, stylistically, ruled the roost. The media seems to consider Romney the winner. Pardon the condescension, but they’re not thinking like Republican base voters. Romney approaches every question as if he is in an actual debate …. Perry treats questions as interruptions …. His total liberation from the constraints of reason give Perry a chance to represent the Republican in in a way Romney simply cannot match.
In this way Perry eerily apes the style of George W. Bush….