Texas Gov. Rick Perry is being criticized for calling Social Security a “ponzi scheme”. That doesn’t seem the least bit controversial to me. But perhaps I don’t fully understand what a ponzi scheme is. Let’s see……..
A Ponzi scheme is a fraudulent investment operation that pays returns to separate investors, not from any actual profit earned by the organization, but from their own money or money paid by subsequent investors. The Ponzi scheme usually entices new investors by offering returns other investments cannot guarantee, in the form of short-term returns that are either abnormally high or unusually consistent. The perpetuation of the returns that a Ponzi scheme advertises and pays requires an ever-increasing flow of money from investors to keep the scheme going.
Isn’t that exactly what social security is?