Rick Perry is a Ponzi Scheme

Rick Perry doubled down on stupid Wednesday night, re-affirming his stance that Social Security is a scam and a Ponzi scheme.

"It is a Ponzi scheme to tell our kids that are 25 or 30 years old today, you're paying into a program that's going to be there. Anybody that's for the status quo with Social Security today is involved with a monstrous lie to our kids, and it's not right," Perry said at the GOP debate Wednesday night. Let's go straight to someone who actually knows what they're talking about, political scientist Jonathan Bernstein. "Very simple: anyone who says that Social Security is a Ponzi scheme either misunderstands Social Security, misunderstands Ponzi schemes, is deliberately lying, or some combination of those," Bernstein wrote in his blog. Bernstein continues. "A Ponzi scheme is a deliberate fraud. Saying that Social Security is financed like a Ponzi scheme is factually wrong, but saying that Social Security is a Ponzi scheme or is like a Ponzi scheme is basically a false accusation of fraud against the US government and the politicians who have supported Social Security over the years," OK, well, Bernstein is an academic, and I know Republicans are not big fans of education and the greater intellectual world. So, how about we see what other Republicans think about Social Security and whether or not it is a scam. Karl Rove, who is so conservative that he won't even allow his car to turn left, thought Perry crossed the line with his contention that Social Security is a Ponzi scheme. “They are going to have to find a way to deal with these things,” Rove said, referring to Perry's comments. “They're toxic in a general election environment and they are also toxic in a Republican primary. And if you say Social Security is a failure and ought to be replaced by a state level program, then people are going to say ‘What do you mean by that?' and make a judgment based on your answer to it,” he said. Dick Cheney, another arch-conservative, agreed with Rove. "I certainly don't believe it's a Ponzi scheme," Cheney said. "It's a program that a great many people depend upon. I think it's a very important program. We do in fact want to preserve it for future generations." What about the other front-runner in this race, Mitt Romney? Does he think Social Security is a Ponzi scheme? "We have always had, at the heart of our party, a recognition that we want to care for those in need, and our seniors have the need of Social Security. I will make sure that we keep the program and we make it financially secure. We save Social Security," Romney said, in response to Perry's remarks. A Ponzi scheme is a fairly simple phenomena. The con man starts with a pool of initial investors. He promises them immense returns on their money, and then grabs a second, larger round of investors. He gives those first investors the second investors' money, keeping a chunk for himself. He then attracts a third round to pay the second, and so on, until eventually there are no more investors to fool. The final round of investors lose everything. Social Security does not work this way. Social Security invests its money in Treasury notes, which grow over time. In fact, the only thing Social Security even remotely has in common with a Ponzi scheme is that Social Security pays benefits out of current receipts. Then again, so do life insurance benefits. And auto insurance benefits. And corporate dividends. And 401k disbursements. And IRA disbursements. And your paycheck. The more you think about it, the more it becomes clear that the only Ponzi scheme here is...Perry himself. Think about it. His presidential campaign attracted a first round of wealthy supporters. They got excited by what they think is a candidate who represents their values (no taxes for billionaires, no safety net for poor people, lots of executions). In turn, those supporters donated money, pushing Perry on to a second round of supporters, and later a third round. Next up for him is to win over the fourth round of supporters — the Republican Party. And, if he wins the nomination, he can pursue the final round of supporters, the American people as a whole. And when the American people lose everything — their retirement security, their union-inspired higher wages, their health care, and their social safety net — they'll realize they've been conned, swindled by the only Ponzi Schemer on the market: Rick Perry.