The Republican chairman of the House Budget Committee on Tuesday drew fire from Democrats for backing Texas Gov. Rick Perry’s description of Social Security as a “Ponzi scheme.”
Social Security fits the technical definition of a Ponzi scheme, Rep. Paul Ryan (R-Wis.) told conservative Laura Ingraham on her radio show.
“It’s not a criminal enterprise, but it’s a pay-as-you-go system, where earlier investors — or say, taxpayers — get a positive rate of return, and the most recent investors — or taxpayers — get a negative rate of return,” he said. “That is how those schemes work.”
Ryan is wrong about one thing -- if you or I would set something like this up, it would be a criminal enterprise. But that's not the criticism we're hearing from our portside friends. We get this, instead:
The Democratic Congressional Campaign Committee pushed back against Ryan’s comments.If it weren't for the pain that would be involved, it would almost be worth it to see the Democrats win on this issue, because they so richly deserve the whirlwind they would reap when the dang thing collapses of its own weight. The key to that phrase is, "almost." We know the train wreck is coming. We can't really "fix" Social Security, either, because the underlying scheme requires that we keeping adding layers to the pyramid. We can start winding the program down, though. The hour grows short.
“Ryan’s belief that Social Security works like a Ponzi scheme proves — once and for all — that House Republicans have really declared a war on seniors,” DCCC spokesman Jesse Ferguson said in a statement. “A Ponzi scheme is Bernie Madoff ripping off Americans — not Social Security benefits that seniors earned and depend on during retirement.”
11 comments:
"Winding down" is exactly the way to fix Social Security. One of my favorite ways to do it is by implementing the FAIR tax. It eliminates the SS tax (and all other federal taxes, replacing them with a single rate retail sales tax), and therefore all "contributions" to SS stop. It's perfect. Those within 5 years or so of retirement get everything SS has promised (out of the general budget, not the SS fund), while those with many years to retirement can create private (tax free!) retirement accounts to (more than) replace the money SS will NOT pay them, because of their lower "contributions." SS is "perfectly" phased out, with each succeeding group getting smaller payouts as the oldest cohorts quit (they die off, IOW) receiving their much more expensive benefits. There's even a perfect cutoff, since current law says you need ten years of payments to collect benefits, anyone with less-- typically age 30 or so-- gets nothing, but has 30-35 years to save up OR can keep on working. No need to change current SS law at all! No need to raise the retirement age, income limits, earning limits, nothing at all! 65 becomes just another birthday.
J. Ewing
One problem with this solution, from an implementation standpoint, is that we would need to amend the Constitution to repeal the income tax amendment. Without doing this, there's no way politicians, particularly liberals, would be able to resist a surtax on the rich which would evolve into a tax on all of us (in addition to the FAIR tax.)
Plus, you can't just put all those accountants and tax lawyers out of business. Think of the children!
The implementation of the FAIR tax is predicated on repeal of the 16th amendment; that's written right into the legislation.
I do have a concern for all those IRS agents, corporate tax accountants (many of whom will still be needed, however), and the makers of TurboTax. Fortunately, the economy is likely to "take off" after implementation and they can all quickly find productive work. That's what happened when Chile went "cold turkey" on their SS system.
J. Ewing
JE,
I understand why you'd support that approach, because it makes perfect sense. Unfortunately, getting a constitutional amendment repealed is probably not going to happen any time soon and unless that happens first, I'd never support the FAIR tax, because the solons would turn it into a VAT and keep the income tax to boot.
I like the idea of a national conversation on repealing the income tax. For Liberals, it would strike at their core like Wisconsin outlawing the Packers or Saudi Arabia outlawing Islam.
Well, the FAIR tax legislation is written to include the repeal, and an implementation "upon ratification by the states." Certainly the left would try to have both, but then they wouldn't want to get rid of the IRS under any circumstance, so it will be necessary to defeat them.
J. Ewing
Those who point out what the "solons" of DC would do hit at the real issue; we need to get people to understand that most government spending is not in their best interest before the beast can be tamed.
My preference; a revenue tariff of 10-15% replacing large portions of the income tax, augmented by using a few billion dollars annually to build a decent border fence/vehicle barrier and start seriously deporting illegals. My guess is that when all is said and done, this could allow borrowing and income tax revenues to drop by a cool trillion dollars annually.
Boy, you laissez faire(ies) need to start cracking skulls! Get these vampire sucking grandpa and grandmas off their gold-bricking hinders and put 'em to work cutting my over-taxed-welfare-funding lawn! Fish or cut bait, you arthritic lay-abouts. What gives you the nerve to steal my money? So you can get dialysis or pace makers or whatever some know-it-all "doctor" thinks might give you more time to pilfer my accounts and come around at Christmas for another year with your wrinkled liver-spotted hand out! And what do I get? In my stocking, a lousy five dollar check. Weak. 65 just another birthday!?! If you can breathe you can shine my wingtips, pops, and try not to drool on the uppers! If anything needs to be repealed around here it's laws against youth-in-Asia! Carry your weight or get off the boat and swim, or however the heck you want to put it... just get it over with and DIE ALREADY!
And what do I get? In my stocking, a lousy five dollar check. Weak.
No kidding. I'd have expected direct deposit.
Reminds me of my sainted grandmother, who would send a birthday card with ten dimes taped to the inside in the shape of a cross.
Anon, you seem to have fantasized about this a bit much. It seems to excite you. That's just weird.
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