Your blogger

My photo
When Roger West first launched the progressive political blog "News From The Other Side" in May 2010, he could hardly have predicted the impact that his venture would have on the media and political debate. As the New Media emerged as a counterbalance to established media sources, Roger wrote his copious blogs about national politics, the tea party movement, mid-term elections, and the failings of the radical right to the vanguard of the New Media movement. Roger West's efforts as a leading blogger have tremendous reach. NFTOS has led the effort to bring accountability to mainstream media sources such as FOX NEWS,CNN and Andy Breitbart's "Big Journalism. Roger's breadth of experience, engaging style, and cultivation of loyal readership - over 92 million visitors - give him unique insight into the past, present, and future of the New Media and political rhetoric that exists in our society today. What we are against: Radical Right Wing Agendas Incompetent Establishment Public Coruption Corporate Malfeasence We are for: Global and Econmoic Security Social and Economic Justice Media Accountability Healthy Communities

Thursday, September 8, 2011

Social Security and the Ponzi Experiment

Texas Gov. Rick Perry emphatically states that Social Security is a “Ponzi Scheme”.

Sometimes campaign spin works to distance a candidate from his controversial past statements. And sometimes the candidate comes back and makes a hash of all the work his staff has done for him.

We could be witnessing the latter scenario when it comes to Texas Gov. Rick Perry (R) and one of the nation's most popular government programs. Last week, Perry's campaign spokesperson took to the Wall Street Journal to help back Perry off the less election-friendly sections of his book, Fed Up!. That includes Perry's suggestion that Social Security is an unconstitutional scheme which should be privatized post-haste.  

Over this past weekend, Perry walked all that back and fired off some more fiery rhetoric about the perils of the entitlement program that most Americans do not want to see changed.

"It is a Ponzi scheme for these young people," Perry said in Iowa, mimicking his pre-presidential campaign language on the subject of Social Security:

"The idea that they're working and paying into Social Security today, that the current program is going to be there for them, is a lie," Perry added. "It is a monstrous lie on this generation, and we can't do that to them."

Charles Ponzi, an Italian immigrant, started this first such scheme in Boston in 1916. He convinced some people to allow him to invest their money, but he never made any real investments. He just took the money from later investors and gave it to the earlier investors, paying them a handsome profit on what they originally paid in. He then used the early investors as advertisements to get more investors, using their money to pay a profit to previous investors, and so on.

To keep paying a profit to previous investors, Ponzi had to continue to find more and more new investors. Eventually, he couldn't expand the number of new investors fast enough and the system collapsed. Because he never made any real investments, he had no funds to pay back the newer investors. They lost all the money they "invested" with Ponzi.

Ponzi was convicted of fraud and sent to prison for two years. When he came out, he returned to Italy, where he became a top economic adviser to Benito Mussolini.

Quoting NFTOS editor and Chief Roger West…..”Just like Ponzi's plan, The pundits along with the CATO institute  (co-founder is Charles Koch) state that Social Security does not make any real investments -- it just takes money from later "investors," or taxpayers, to pay benefits to earlier, now retired, taxpayers. Like Ponzi, Social Security will not be able to recruit new "investors" fast enough to continue paying promised benefits to previous investors. Because each year there are fewer young workers relative to the number of retirees, Social Security will eventually collapse, just like Ponzi's scheme.”



What's more, Perry also said "I haven't backed off anything in my book." Not surprisingly, Democrats jumped all over the quotes. Perry's re-embrace of the Social Security-as-Ponzi scheme thing is likely to endear him further to the tea party types who already support his campaign in big numbers. But polls have shown even the tea party doesn't want to see cuts to Social Security, showing just how dangerous grabbing onto this particular political third rail can be.

So Perry's got a dilemma -- does he stick to his guns on Fed Up!, giving him the sort of "genuine" cred conservative voters crave in a primary candidate? Or does he go the way his staff seems to be suggesting, which frees him from attack-ads-in-a-can like the Ponzi Scheme line? For now it looks like Perry's more interested in staying "real" than becoming more electable.

We leave you with this thought, If George Bush was cancer, and President Obama is chemo, Rick Perry is what it looks like when the cancer returns.



NFTOS