There goes Rick Perry again, saying things that make liberals’ heads explode.
Speaking to a crowd in Iowa this weekend, the Texas governor and GOP presidential hopeful doubled down on statements he made in his book, Fed Up!, that Social Security is essentially a pyramid scheme.
So just how apt is the comparison between a Ponzi scheme and the popular entitlement program?
A Ponzi scheme is a fraudulent investment plan that pays returns to investors with their own money, rather than with actual profits. It lures investors with higher-than-usual payouts — money coming, of course, from new investors.
Since Ponzi schemes depend on perpetual growth and pay out more than they takes in, they’re ultimately doomed to failure. The only question is how much money a scammer can pilfer before the pyramid crashes down or the law sniffs the scheme out.
Exhibiting its distinctively strained logic, Daily Kos writes, “The only way Social Security could ever become anything like a Ponzi scheme is if we suddenly ended Social Security.”
Think Progress adds that entitlement programs like Social Security aren’t Ponzi schemes because they reward “those who pay into them with guaranteed benefits.”
Whether or not a Ponzi scheme and Social Security share much in common rests on whether one accepts the fundamental premise that Social Security’s benefits are guaranteed.
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