Republican politicians have recently referred to Social Security as a “Ponzi scheme”. This is an absurd misrepresentation of a program that has helped keep many of America’s senior citizens out of poverty. Rick Perry, the governor of Texas, in a recent debate, stated “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 that’s not right.” What’s not right is that Governor Rick Perry is clueless as to the nature and makeup of the Social Security system!
Ponzi Schemes are swindles where early investors are paid with money invested by later investors. The later investors never receive a return on their investments or their principal back. Ponzi schemes involve investors who are lied to about their eventual payouts. The Social Security system in the United States is an open system. Annual reports are prepared by trustees. These trustees project the future of the program 75 years in advance. Social Security has been paying benefits to seniors for decades. It has never missed a payment to recipients. The program is currently fully funded to pay all benefits for seniors through the year 2036.
Governor Rick Perry
Perry’s comments about Social Security are inexcusable nonsense! Social Security is an entitlement program because Americans pay into Social Security during the course of their working lives. Entitlement programs are a type of insurance. Social Security is not a form of welfare! It is a social insurance policy. During the course of each American’s working life, he or she pays into a pool, so when he or she reaches retirement age, they will be able to receive the benefits from this pool.
Social Security Trust Funds
The Social Security Trust Fund will have a surplus that will reach it’s peak in the year 2022. At that time, the surplus in the fund will be 3.7 trillion dollars. Social Security is a program that has worked for more than 50 years. Politicians shouldn’t mess with a system that already works well.