We can say one thing of the new GOP front-runner: Governor Rick Perry knows how to fire up a crowd. The leftist media blew up this week when Perry reiterated a point from his book Fed Up! that Social Security and Medicare are Ponzi schemes.
“There is nothing at all about Social Security that is anything like a Ponzi scheme,” declares the Washington Post’s Plum Line blog. (Bernie Madoff’s lawyers must be wondering where this guy was during jury selection.) The blogger claims Social Security doesn’t resemble the “deliberate and outright fraud” of a Ponzi scheme but is simply a promise to take taxes from children for the benefit a certain group. (Whew, thank heaven that’s cleared up!)
What this already troubling description of Social Security leaves out is that almost every subdivision of the program includes the word “insurance.” When Franklin Roosevelt campaigned for the law, he routinely claimed that Social Security was system of insurance that would provide a pension income to the elderly. It wasn’t until the 1937 Supreme Court case Helverling v. Davis where the same administration argued that Social Security taxes were not insurance premiums at all, but a generic tax to be spent as government saw fit. But the deception didn’t stop there. To the present day, statements on the policy come regularly to the program’s participants, perpetuating the illusion of a traditional retirement plan. But of course, only an uncouth Texan could describe that as “deliberate or outright fraud.”
To be fair, Timothy Carney of the Washington Examiner points out one major difference between Social Security and a private Ponzi scheme: the option to walk away. When Bernie Madoff’s investors found that he was spending instead of investing their money, at least they were able to…
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