Is Social Security something of a Ponzi scheme? It seems to me to partake of its essential elements, requiring new “investors” to pay off previous “investors.” The trappings of the program are sufficiently misleading that they would land principals operating in the private sector in serious trouble. Thanks to a variety of material misrepresentations, as John recently noted, many Americans still believe that the government maintains an “account” in their name holding assets; some even think that their “account” contains their own contributions, carefully set aside for their retirement by Franklin Roosevelt or his successors.
John went so far as to say that if this is not the biggest fraud in the history of the human race, it is certainly in the top five. Shikha Dalmia argues that the program is worse than a Ponzi scheme.
Following up on this week’s GOP presidential candidates’ debate at the Reagan library (full transcript here), CNBC’s Rick Santelli asked New York Times columnist Tom Friedman if he thought that Social Security was a Ponzi scheme. Friedman couldn’t agree of course, because in the GOP debate the troglodytic (in the view of the Times) Rick Perry had just stood by his assertion that it is. We can all learn something from Friedman’s lucid response to Santelli’s question (video below).