This is not a political blog nor will it ever become one. Politics make me stabby. Nor will I publicly endorse a candidate for president. Actually, I’m still undecided at the moment.
Rick Perry has been the governor of Texas for the past 10 years. He’s made some mistakes, but I think overall he’s been good for the Lone Star state. This doesn’t necessarily merit my endorsement for president, but I do think the rush to demonize him for calling Social Security a Ponzi Scheme is a bit unfair.
The Social Security Act was drafted during Roosevelt’s first term by the President’s Committee on Economic Security, under Frances Perkins, and passed by Congress as part of the New Deal. The act was an attempt to limit what were seen as dangers in the modern American life, including old age, poverty, unemployment, and the burdens of widows and fatherless children. By signing this act on August 14, 1935, President Roosevelt became the first president to advocate federal assistance for the elderly.
The Act is formally cited as the Social Security Act, ch. 531, 49 Stat. 620, now codified as 42 U.S.C. ch.7. The Act provided benefits to retirees and the unemployed, and a lump-sum benefit at death. Payments to current retirees are financed by a payroll tax on current workers’ wages, half directly as a payroll tax and half paid by the employer. The act also gave money to states to provide assistance to aged individuals (Title I), for unemployment insurance (Title III), Aid to Families with Dependent Children (Title IV), Maternal and Child Welfare (Title V), public health services (Title VI), and the blind (Title X). (Source: Wikipedia).
When the act was first adopted in 1935, the ratio of workers to retirees was 40 to 1. Currently that ratio os 3 to 1 and is predicted to soon diminish to 2 to 1. I know millions of Americans depend on Social Security and to threaten to do away with it seems equivalent to taking away their ability to support themselves. However, we need to acknowledge that the system is broken and unsustainable. But is it a Ponzi scheme?
According to the U. S. Securities and Exchange Commission (SEC), the definition of a Ponzi scheme is as follows:
“A Ponzi scheme is an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors. Ponzi scheme organizers often solicit new investors by promising to invest funds in opportunities claimed to generate high returns with little or no risk.”
I ask you, dear reader, which part of the Social Security system IS NOT a Ponzi scheme? Except maybe the fact that most people don’t have a choice to opt out of it to begin with? I don’t dispute that the Social Security Act of 1935 was created with good intentions, but we all know what the Road to Hell is paved with, don’t we?
In defense of a fellow Texas, we Texans sometimes have an annoying habit of saying what we think without much sugar-coating. Rick Perry might not be right about everything, but in my opinion he’s right about calling Social Security a Ponzi scheme. Because in its current state, that’s exactly what it is.
This post was inspired by a news story featuring comedian Steven Crowder, who actually called the SEC to report his Social Security deductions as a Ponzi scheme.
You can find the entire video here.« « Previous Post: The best of Billy Coffey: Paper Angels | Next Post: Raising Hope » »