One of the most provocative moments of last night’s Republican primary debate (second only to Rick Perry’s denial of climate change and his incoherent reference to Galileo) is when Rick Perry called the social security program “a Ponzi scheme.” Mitt Romney bristled at this description, saying that the Republican Party needs a candidate that is committed to preserving social security, not dismantling it. Perry undoubtedly scored some points with his conservative base with his description of social security and his refusal to back down or alter his position. However, given the popularity of the program, Perry’s view will almost certainly hurt him in the general election if he is the Republican nominee. Indeed, it was this exchange between Perry and Romney over social security that allowed Romney to shine as a candidate, which is something that he really needed given that Perry had taken Romney’s place as the frontrunner.
But I want to ask a question that none of the candidates clearly answered last night—how is social security, as the program currently stands, not a Ponzi scheme? Beneficiaries receive money based on contributions from people who are currently working and who are paying into the program based on the assumption that they will receive benefits when they are older, but everyone knows that the program as it currently stands will go bankrupt long before current payees can receive any benefits. Isn’t that the textbook definition of a Ponzi scheme? Mind you, I think social security is a good thing, but I am down right puzzled by the push back that Perry is getting on this point from both the left and the right. Maybe I am missing something, but I think that his other positions--- denial of climate change, his misrepresentations of Texas’s job creation record, the large number of uninsured Texas residents, the fact that Texas kills people so often---are much more criticism worthy than his description of social security (which has a ring of truth). So I guess my question is: Is Perry wrong on social security? What am I missing?