Conwell: Rick Perry and the Great Ponzi Scheme
Seems like some folks are upset about Rick Perry’s assertion that Social Security is a Ponzi Scheme.
Now, I don’t know if I’m for Perry or not. I don’t trust him. He possesses many of the attributes of the consummate politician, both good or bad. There are only a few politicians I trust, and most of them are local folks. Even among the locals, there are those who put their own agendas above those of the public.
So, when I say, let’s talk about his remarks, I’m not supporting him, although I believe if you look at his assertion with an open mind, you’ll be able to see his point.
I’m not trying to change your mind. Most of you are too wise for that, but I just want to explain his point-of-view.
First, just what is a Ponzi Scheme?
It is a fraudulent investment operation that pays returns to investors, not from actual profits earned, but from money paid by subsequent investors.
The scheme draws new investors by offering returns other companies can’t guarantee.
These returns are short term and offer abnormal and consistent returns. When other investors see that old Joe Moneybags’ investment with ‘Pie in the Sky Mutuals’ is drawing 20 percent, they fall all over their own greed to get in on the action.
The only way for the scheme to continue is to entice new investors–continually–as in day after day; to feed on itself.
Most of you have heard of Bernie Madoff who scored billions off a long running Ponzi Scheme.
A la Perry, let’s compare his plan to our Social Security system, shall we?
Bernie: took money from investors with the promise that the money will be invested and made available to them later.
Social Security: Takes money from wage earners with the promise that the money will be invested in a ‘Trust Fund’ and made available later.
Bernie: Instead of investing the money, old Bernie spent it on nice homes and yachts.
Social Security: After depositing money in a ‘Trust Fund’, politicians borrowed from it to supplant monies for the General Revenue Fund, using it for general spending and vote buying.
Bernie: When the time came to pay the investors back, Bernie simply used funds from new investors to pay the older investors.
Social Security: When benefits for the older investors became due, politicians paid the old codgers with money taken from younger and newer wage earners.
Bernie: When Bernie’s scheme was discovered, you-know-what hit the fan. New investors scattered like quail. Money dried up.
Social Security: When Social Security runs out of money, politicians try to force taxpayers to send them more or they cancel or pare down benefits to all those who paid into it.
Now, there you have it. That’s the point Perry is trying to make.
If you can see a difference in a Ponzi Scheme and Social Security, I’d appreciate it if you let me know. I’ll even print your response (as long as it is printable).
Now the old boy in my high school chat group who put me on to this comparison added one more comparison.
I think it is interesting enough to repeat here.
Today, Bernie Madoff is in jail.
Today, politicians remain in Washington with fat medical and retirement benefits or have retired to bask in the fact they are rich as Croesus and have federal buildings and libraries named after them.
Does Madoff deserve prison?
Definitely! His actions were deliberate, bringing about devastating ruin to hundreds of lives.
What about the politicians who’ve taken from Social Security?
I don’t know about you, but I see a double standard here that has no place in our country.
What to do about it?
House members-three terms; Senate-two terms.
A keenly perceptive activist in the intellectual life of our country, Milton Friedman, once remarked. “If you put the federal government in charge of the Sahara Desert, in five years, there would be a shortage of sand.”
Ain’t it the truth.