The ‘Ponzi’ Sound Bite

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Making up a growing shortfall, as baby boomers stop paying into the system as they retire, and start drawing money out of the system, would mean ever-increasing burdens on the taxpayers that the taxpayers are unlikely to put up with.

Social Security worked fine when the small generation from the 1930s received pensions from the money being paid in by the larger and more prosperous “baby boom” generation that followed. It worked fine when the average life expectancy of the first generation was not long enough for most of them to collect Social Security checks for more than a few years — if at all.

Declining birth rates and greatly increasing lifespans have created havoc with Social Security’s finances, which are based on having the first generation’s pensions paid with money collected from the second generation — and the second generation’s pensions paid by the next generation, etc.

Any private financial scheme set up in a similar way would be illegal. That is why Charles Ponzi went to prison.

The politically expedient way of dealing with the situation is to “save Social Security” with short-term fixes that kick the ever-growing shortfall down the road for some later Congress to deal with — or to be overwhelmed by, when voters refuse to pay ruinous tax increases to keep the system going.

Another way to deal with the problem is to give younger workers the option to set up privately-owned retirement accounts instead. These accounts would be beyond the reach of politicians, and based on each generation setting aside money for its own retirement. Studies have shown that private accounts would pay retirees far better than Social Security.

Meanwhile, people currently depending on Social Security can continue to get what they were promised, even if that requires taxpayer subsidies for the current generation of retirees — as distinguished from subsidizing unending generations to come.

These are the kinds of options that need serious discussions, instead of “gotcha” sound bites. Sound bites are usually not very sound, and they are an irresponsible way to discuss serious issues.

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  • HalleysFifth

    Thomas Sowell: One of America's greatest living intellectual treasures.

  • ObamaYoMoma

    Actually, I agreed with Rick Perry when he called Social Security a Ponzi scheme. However, what I don't like about Rick Perry is the fact that he is an Islamopanderer the same way that GWB and Obama both are as well, the fact that he is exceedingly weak on border security, the fact that under his governorship he provides illegal immigrants in state tuition discounts and financial assistance, and the fact that he supports pathways to amnesty which, of course, he doesn't call amnesty. Hence, Rick Perry will not get my vote under any circumstances whatsoever and even if he does win the Republican nomination, as I'm not a Republican, but instead a conservative independent and sorry but he doesn't pass my smell test.

    • mrbean

      You say: "Rick Perry will not get my vote under any circumstances whatsoever and even if he does win the Republican nomination" I guess that means that you will vote for Obama so he can finish the country off.

  • ObamaYoMoma

    It means exactly what it says. I won't vote for any candidates unless they are sufficiently conservative and sorry but Obama doesn't make the grade either. However, I will not encourage the left to continue hijacking the Republican Party by holding my nose and voting for the lesser of the two evils, because we end up with leftwing Presidents like GWB that were only slightly less leftwing than Obama.

    Now, if you don't have a problem with the left hijacking the Republican Party and turning it into the second coming of the Dhimmicrat Party the same way GWB did, then by all means vote for liberals like John McCain and Rick Perry, but please pardon me if I won't.

  • 2maxpower

    the left has controlled the language of debate for generations. the conservatives need to stop arguing the "mugs game" with them. change the narrative and attack the liberals.progressives for their lies.

    • SoCalMike

      2maxpower hit the nail on the head.
      I'm sick of Republicans allowing Dems to to choose the terms of the debate.
      Dems are dangerous but Repubes are indeed stupid precisely because they don't seem to grasp what liars and sell outs Dems are.
      They lie unconsciously and don't feel like their feet are on the ground if they aren't making common cause with people who want to murder or enslave us.
      Just look at BHO, Bill Chinagate Clinton, Saudi owned Jimmy "I hate Jews" Carter, Hanoi Jane, Spencer Ackerman, Michael Moore and the rest of the sordid dirt bags.

  • StephenD

    2max is right on! Why have the conservatives in America let the Left (they are NOT Liberal), define the debate? We end up fighting on their terms. Instead, we should bring the fight to them. Make them defend their claims; make them refute our claims. For instance, exposing the problems with Social Security has become verboten. It is not to be spoken of or you are labeled a hater of the elderly. Why not show the numbers and a viable plan to prevent an implosion? After the charge is made that you want to throw granny off the cliff you spend your time saying you don't want to do that instead of making them defend against the charge they want your grandchildren to pay until they die.

  • MKS

    First, vote the Democrats out of office in every election for the foreseeable future until they are of only historical interest. Then, vote conservative Republican, Libertarian, Constitutionalist, TEA, or whatever party will respect the functions and limitations of government envisioned and documented at the outset of the U.S. republic.

    But take the Democrats out of power first.

  • mrrbean

    $4.5 trillion of the debt is owed to the Social Security trust fund by the government as IOUs. It is worse than a PONZI scheme – it is a gaovernmen SCAM!