Gov. Rick Perry, the GOP presidential candidate who calls Social Security a “monstrous lie” and a “Ponzi scheme” has implied that future retirees can’t rely upon receiving benefits from the system.
Not only is Perry shooting wildly from the hip on these statements — a strategy cynically designed to attract angry, younger independent voters — he’s spewing some layered falsehoods that need to be addressed.
Social Security can not only be preserved for future generations, its coming fiscal shortfalls can be fixed relatively simply. What Perry also neglects to mention is that it’s one of the most successful anti-poverty programs in U.S. history.
The before-and-after Social Security picture is dramatic. Before Social Security, almost half of elderly Americans had income below the poverty line, reports the Center on Budget and Policy Priorities. Roughly 12 percent of elderly citizens are considered poor today. The program lifted more than 11 million out of poverty — more than 60 percent of those were women.
Here’s some even more relevant Texas-sized context: Today, more people are slipping back into poverty because of permanent job losses, recessions, a housing meltdown, stock-market downturns, reduced employment benefits, higher medical costs and stagnant wage growth. The U.S. poverty rate last year increased for the third straight year — the highest it’s been since 1993. Some 46 million have annual incomes below the poverty line of $22,113.
As the U.S. is saddled with the highest poverty rate among industrialized countries, why are the anti-poverty features of Social Security being attacked?
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Showing posts with label ponzi. Show all posts
Showing posts with label ponzi. Show all posts
Saturday, September 17, 2011
Saturday, September 10, 2011
Ponzi Perry
Social Security is a government-run insurance program that provides the typical retiree with single-digit returns on contributions deducted from their paychecks over the course of their working lives. The program has operated for 76 years amid praise from presidents of both parties. In 1983, even as staunch a critic of big government as President Ronald Reagan vowed: “The Social Security system must be preserved.”
In December 2010, 54 million Americans received either retirement or disability payments under the Social Security program.
Poverty among elderly Americans was endemic before the program was created in 1935. The first benefit checks weren’t issued until 1940, and as late as 1959 more than 35 percent of the elderly were living below the poverty line, according to the Social Security Administration. In 2009, the most recent Census Bureau data available shows, the figure was 8.9 percent.
To presidential hopeful Texas Governor Rick Perry, however, the country’s most expensive entitlement program is a financial con that would have made Charles Ponzi blush. “It is a Ponzi scheme to tell our kids that are 25 or 30 years old today, you’re paying into a program that’s going to be there,” Perry said during a Sept. 7 debate of the Republican presidential candidates, reprising a theme from his 2010 book “Fed Up.”
Experts on both Ponzi schemes and Social Security say Perry is wrong. “Ponzi schemes are, by definition, fraud,” said Mitchell Zuckoff, author of “Ponzi’s Scheme: The True Story of a Financial Legend.”
“Social Security is above board,” he added. “We can argue about whether it’s a good system. But you can’t call it a fraud.”
The Social Security and Medicare Trustees project a deficit this year of $46 billion and continuing annual shortfalls until the $2.5 trillion fund is exhausted in 2036. Beyond that point, the program is expected to have sufficient funds from continuing infusions of payroll taxes to pay about 75 percent of promised benefits.
Perry’s aversion to the program is nothing new. In his 2010 book “Fed Up,” he lambastes Social Security as a “crumbling monument to the failure of the New Deal” and likens it to “a bad disease.”
Democrats crowed over a statement they regarded as political gold. “Ponzi Perry just lost the general election,” former Michigan Governor Jennifer Granholm tweeted during the debate.
In December 2010, 54 million Americans received either retirement or disability payments under the Social Security program.
Poverty among elderly Americans was endemic before the program was created in 1935. The first benefit checks weren’t issued until 1940, and as late as 1959 more than 35 percent of the elderly were living below the poverty line, according to the Social Security Administration. In 2009, the most recent Census Bureau data available shows, the figure was 8.9 percent.
To presidential hopeful Texas Governor Rick Perry, however, the country’s most expensive entitlement program is a financial con that would have made Charles Ponzi blush. “It is a Ponzi scheme to tell our kids that are 25 or 30 years old today, you’re paying into a program that’s going to be there,” Perry said during a Sept. 7 debate of the Republican presidential candidates, reprising a theme from his 2010 book “Fed Up.”
Experts on both Ponzi schemes and Social Security say Perry is wrong. “Ponzi schemes are, by definition, fraud,” said Mitchell Zuckoff, author of “Ponzi’s Scheme: The True Story of a Financial Legend.”
“Social Security is above board,” he added. “We can argue about whether it’s a good system. But you can’t call it a fraud.”
The Social Security and Medicare Trustees project a deficit this year of $46 billion and continuing annual shortfalls until the $2.5 trillion fund is exhausted in 2036. Beyond that point, the program is expected to have sufficient funds from continuing infusions of payroll taxes to pay about 75 percent of promised benefits.
Perry’s aversion to the program is nothing new. In his 2010 book “Fed Up,” he lambastes Social Security as a “crumbling monument to the failure of the New Deal” and likens it to “a bad disease.”
Democrats crowed over a statement they regarded as political gold. “Ponzi Perry just lost the general election,” former Michigan Governor Jennifer Granholm tweeted during the debate.
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