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OK, watched the debate tonight, and they seem to be slamming Perry for calling Social Security a Ponzi scheme, and then Romney attacking him for calling it that..

Now If I understand a Ponzi scheme it's where people "invest" money into it, and people who invest later pay for the "previous" investors...

Sounds exactly like Social Security to me...

Not saying it's a "bad" Ponzi scheme, but that is what it is. at least by the definition I've read (or maybe a Pyramid Scheme might be better)

I mean if something quacks like a duck and looks like a duck whats wrong with calling it what it is?

It doesn't actually meet the definition of a ponzi scheme. It is a defined benefit pension plan. You pay into SS as you work and when you retire (and are of age) you can claim defined benefits. Unlike a 401k you're supposed to get your benefits regardless of what the markets have been doing. It is the responsibility of the trustees (and Congress, or the Legislature, or whoever) to ensure that there is enough money to meet the obligations using the money received. Compare this with a 401k or Roth IRA where the money you get out at the end is the money you put in plus whatever interest the money made.

The problem is that the money handed over might not be put to proper use or not be well invested. I believe SS for example holds T bills, which don't have the greatest returns. The question of whether a pension is fully funded can be somewhat complicated as it requires accurate estimates of future income, including from invested assets, and future expenses.

Hearly wrote:OK, watched the debate tonight, and they seem to be slamming Perry for calling Social Security a Ponzi scheme, and then Romney attacking him for calling it that..

Now If I understand a Ponzi scheme it's where people "invest" money into it, and people who invest later pay for the "previous" investors...

Sounds exactly like Social Security to me...

It's not a Ponzi scheme because Social Security is not a fund. (There is a small amount of SS money that is operated like a fund, but it's only a small, transient amount).
In fact, SS (aka OASDI), is just a combination of taxes and benefits. It's part of the general budget. The taxes go into the budget,
the benefits come out of the budget. Despite the appearance, it's not a separate stream of money from, say, the income tax revenues.

There is a legitimate question of how the US government will be able to pay for its future obligations, considering current deficits and trends.
But that is no different from expenditures on defense, medicare, or the interstate highway system.

Yeah, it's a ponzi scheme. If anyone else in the USA did what the government did with the money, they'd be in jail right now. The only way the people getting money now can get it, is if more people pay in money more money. Once the money runs out, the plan collapses. As there are more and more people on SS everyday, and less and less people paying in, eventually it will collapse, like all ponzi schemes do.
This has been known for a while, and has been pointed out many times over the last twenty years, because we have this huge population blip known as 'the baby boomers'. So sometime in the next decade SS will become 100 percent of the national budget and go bankrupt. The only question is, when does the government finally pull the plug? If you're under 55, odds are good you will never see any SS monies. If you're under 40, it's guaranteed. This all started back in the 60's when LBJ raided the SS fund, and put all the money into the general budget. You'll notice that no one in the government is in the SS scheme. Because they all know it's gonna go away in the not so distant future.

Plenty of government officials, and employees, are in Social Security. Citation for your statement?

Hearly wrote:OK, watched the debate tonight, and they seem to be slamming Perry for calling Social Security a Ponzi scheme, and then Romney attacking him for calling it that..

Now If I understand a Ponzi scheme it's where people "invest" money into it, and people who invest later pay for the "previous" investors...

Sounds exactly like Social Security to me...

Not saying it's a "bad" Ponzi scheme, but that is what it is. at least by the definition I've read (or maybe a Pyramid Scheme might be better)

I mean if something quacks like a duck and looks like a duck whats wrong with calling it what it is?

Rather than restating various arguments, it may be useful for people to look at Wikipedia. Not that Wikipedia is necessarily right, but it may avoid repeating arguments about semantics.

dawich wrote:Plenty of government officials, and employees, are in Social Security. Citation for your statement?

Snopes and other urban legend sites agree that yes they're paying into SS. However, they get back about 3-4 times the amount non federal gubment people do, due to the pension system. And can get even higher amounts, depending if they have prior military or serve longer terms.