By Jay Taylor, Vice President of Political Strategy – Liberty Alliance, LLC
Rick Perry has come under fire for calling Social Security a Ponzi Scheme. It would be a safe bet that most people do not understand the definition of a Ponzi Scheme. According to Investopedia “a Ponzi Scheme is a fraudulent investing scam that promises high rates of return at little risk to investors. The scheme generates returns for older investors by acquiring new investors. This scam actually yields the promised returns to earlier investors, as long as there are more new investors. The Ponzi scam is named after Charles Ponzi, a clerk in Boston who first orchestrated such a scheme in 1919. A Ponzi scheme is similar to a pyramid scheme in that both are based on using new investors’ funds to pay the earlier backers. One difference between the two schemes is that the Ponzi mastermind gathers all relevant funds from new investors and then distributes them. Pyramid schemes, on the other hand, allow each investor to directly benefit depending on how many new investors are recruited. In this case, the person on the top of the pyramid does not at any point have access to all the money in the system. For both schemes, however, eventually there isn’t enough money to go around and the schemes unravel.” So think about this for a bit. What does social security do? Takes money from new workers and promises payments to retired workers. And guess what, just like the Ponzi Scheme, Social Security is out of money and the scheme is about to unravel. If a private company would try to do something similar to Social Security they would be taken to court.
Obamanomics seems to be the same sort of plan. We spend money now at a record pace to supposed promises of greatness down the road. Somehow generations from now we’re supposed to be able to pay for current spending, but that of course is always left out of the plan. Obama’s supposed jobs speech will be filled with more “stimulus” spending with buzz words like investments or infrastructure spending. Increased taxes on the supposed rich will be where Obama claims to get this money. Further taxing on an already overtaxed nation will do nothing but stifle any possible job creation as investors and entrepreneurs either save their money or use it elsewhere. Just like the Ponzi Scheme it is doomed to fail.
The really sad part about this is that this seems to be the goal of the progressive liberals in charge in Washington. Their goals of some sort of socialist utopia where we all live and contribute to each other’s greatness and woes sounds like a pretty picture. But when you look at the dependence on the government that would be required in such a socialist dreamland, it doesn’t take long to realize that this of course cannot work and will destroy itself like every socialist government experiment ever tried.
So when you hear some liberal saying that Social Security is not a Ponzi Scheme you can come back with getting them to explain how Obamanomics is not a Ponzi Scheme. A hard task even for the most hardened faithful liberal.