In defense of a fellow Texan

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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).[12] (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.

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10 Responses to “In defense of a fellow Texan”

  1. Glynn September 20, 2011 at 6:11 am #

    I don’t have any strong opinions one way or the other about any of the presidential candidates, but when the only a major government program has sitting in the bank to fund it is IOUs from that same government, it sounds like a Ponzi scheme to me.

  2. James Williams September 20, 2011 at 8:02 am #

    1. I agree with you that Perry is right about SS being a Ponzi scheme.
    2. My problems with the man are in what I can see of his character, not his politics. And the list of such problems is a long one. I don’t trust the man.

  3. jake September 20, 2011 at 8:03 am #

    Kat, I must say, I’m always impressed by the facts you’re able to provide. I think your presentation of the research you do is brilliant, too. I’m back and forth on social security– truthfully, it’s trying to do what the church SHOULD be doing, but then again, the church has left so many of those tasks to the government. Otherwise, all those poor people would cut into our building funds and pastors’ salaries, right?

    On the flip side, the notion of someone suffering due to a lack of money makes me cringe. I deal with it daily now with my refugees…. so sometimes you take what you can get.

    And by the way, “stabby” is my favorite adjective.

  4. Louise September 20, 2011 at 8:06 am #

    You definitely serve up food for thought every time I come here.

    Social Security. Ponzi Schemes.

    I’m Canadian. No politician has ever been brave enough, or suicidal enough, to challenge the social security network of our country.

    Hmmm….. maybe it’s time.

  5. Helen September 20, 2011 at 8:27 am #

    I can see his point. I’m not sure what can be done to fix it. The elderly today contributed to Social Security from their own paychecks. Should they be cut loose because the government spent their money on other things when it was “surplus” rather than squirreling it away because the day would come when there were more elderly people than working young and middle aged? There is no way for SOMEONE to not be a loser in this whole mess. No way at all!

  6. Jim H September 20, 2011 at 8:47 am #

    I agree with you, Kathy – and I bet Bernie Madoff does too! Isn’t he in jail for doing exactly what the gov’t has done with the money entrusted to it?

  7. Annie K September 20, 2011 at 2:28 pm #

    The problem with SS is it’s being run as a ‘rob Peter to pay Paul’ program and Peter is flat broke. I’d rather take my (involuntary) monthly contribution and be allowed to invest it myself. I could do haylofa better job than the goverment ever could. Or will.

  8. floyd September 20, 2011 at 7:03 pm #

    It takes guts to tell the truth as a politician. Until we elect people to serve US in Congress and at all levels, tell the truth, and do the right thing, even if it is the hardest thing results in a one term service, the problems aren’t going to go away.

    Man oh man, I could really go into one of your famous “rants” here….

  9. seekingpastor September 20, 2011 at 9:47 pm #

    Demonizing people based on soundbites is, as a rule, a terrible practice. It would probably be wise to actually dialogue about things instead of verbally assaulting them.

  10. Simply Darlene September 22, 2011 at 2:35 pm #

    I don’t know what a ponzi is… but I reckon it’s similar to a turd in the punchbowl, aye?

    (still missing ya! and ever so glad to see you in the political arena)

    Blessings.

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