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Best exchange yet: Ponzi scheme v. Social Security. Perry v. Romney

Here's the best exchange in a presidential debate in years between Mitt Romney and Rick Perry over his comments about Social Security and whether it's a Ponzi scheme.

Perry: “The people who are on Social Security today need to understand something -- slam dunk guarantee… that program is going to be there for them when they arrive there. But the idea that we have not had the courage to stand up and look Americans in the face, young mid-career professionals or kids that are my children age and looked them in the eye and said, ‘Listen, this is a broken system.’ It has been called a Ponzi scheme by many people long before me. But no one’s had the courage to stand up and say, ‘Here is how we’re going to reform it. We’re going to reform it.’… But we’re going to fix it. So that our young Americans that are going out into the workforce today will know without a doubt that there are some people who came along that didn’t lie to them that didn’t try to go around the edges and told them the truth.”

Blitzer: To Romney, you’ve called Perry’s position “unacceptable,” and it could obliterate the Republican Party.

Romney: … “The term Ponzi scheme, I think, is over the top and unnecessary and frightful to many people. But the real issue is that right in his book, Gov. Perry pointed out that in his view that Social Security is unconstitutional, that this is not something the federal government ought to be involved in, that instead it should be given back to the states. And I think that view and the view that somehow Social Security has been forced on us over the past 70 years and that by any measure – again, quoting from his book – ‘by any measure Social Security has been a failure.’ This is after 70 years of tens of millions of people relying on Social Security. That’s a very different matter…. The real question is, does Gov. Perry continue to believe that Social Security should not be a federal program, that it’s unconstitutional and it should be returned to the states? Or is he going to retreat from that, too?”

Perry: “If what you’re trying to say is back in the 30s and 40s the federal government made all the right decisions, I disagree with you (applause). And it’s time for us to get back to the constitution (applause). And a program that’s been there 70 or 80 years, obviously, we’re not going to take that program away. But for people to stand up and support what they did in the 30s or what they’re doing in the 2010s is not appropriate for America.”

Romney: “But the question is: Do you still believe Social Security should be ended as a federal program as you did six months ago -- when your book came out – and returned to the states. Or do you want to retreat from that?

Perry: “I think we ought to have a conversation.”

Romney: “We’re having that right now.”

Perry: “Yes.. I’ll finish that conversation. The issue is: Are there ways to move the states into Social Security for state employees or retirees. We did in the state of Texas back in the 1980s. I think those types of thoughtful conversations with America rather than trying to scare seniors like you’re doing and other people (applause). It’s time to have a legitimate conversation in this country about how to fix that program so where it’s not bankrupt and our children know there’s going to be a retirement program there for them.”

Romney: “Governor, the term Ponzi scheme is what scares seniors, Number 1. And Number 2: Suggesting Social Security should no longer be a federal program and returned to the states because it’s unconstitutional is likewise frightening. There are a lot of bright people who agree with you. And that’s you view. I happen to have a one. I think Social Security is an essential program, that we should change the way we fund it…”

Perry: You called it criminal. You said if people did it in the private sector it would be called criminal. That’s what you said in your book. (Applause)

Romney: “What I said was…. (Applause) Gov. Perry, you’ve got to quote me correctly. You said it’s criminal. What I said was Congress taking money out of the Social Security Trust Fund is like criminal. And it is. It’s wrong.”

Comments

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Zadoc Paet

I think if Ron Paul wasn't getting press before, he will be now. Perry trying to back off of "ponzi" was a sight to see!

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VT Farmer

HA! The Texas Miracle: 30% of the funding came from The Fed Stimulus Package. And, HA! The Administration used Mitt's Health Care in MA to model ObamaCare. Which of these Jokers do we want? All the while, the real issue is that a nation as big as ours, with commitments as big as ours, can't finance itself without a dominant manufacturing base, but profit (for short term gain) shipped jobs overseas. Now, the PONZI SCHEME is: How long our bankers can turn a profit from financing investment elsewhere in the world? These guys are beholden to the Fat Cat 1%, who see their future there at our expense. They feel ENTITLED...their Divine Right...the Divine Right of Money. Do you get it, now?? 9% Unemployment can't go away without manufacturing jobs. And we can't manufacture jobs. It's simple math and it doesn't add up to vote the old way. Trouble is, even Ron Paul doesn't explain what will happen in the world when we pull back unilaterally from our long standing commitments. It's going to take leadership we haven't seen, yet. No Republican, No Democrat, No Independent. And if you're going to limit terms to try and eliminate career politicians, then we will have lobbiests being even more influential. Me, I suggest you pray and remember what Abraham Lincoln said about whose side God was on.

AntiTallahassee

We do not need term limits. We need people who care enough about their communities to get out and make an INFORMED vote everytime there is an election. That would create real term limits and a more responsive representative government.

corneliusvansant

Some call SS a "pay as you go" p lan. But they merely play with words to reach a predisposition. They are wrong; placing children under debt without their consent is taxation without representation and worse than a Ponzi Scheme because we are all compelled. Is this a free country or what?

Call it "pay as you go" or whatever, SS is a Ponzi scheme. Yes, Madeoff had a "pay as you go" system as well; it lasted for years. But he could not compel the entire population into an obviously losing scheme that uses current investors to pay older ones. Ultimately, the rubber hits the road.

There is a pretense in a "pay as you go" scheme that one is making a retirement investment when it is deducted from your wages; it creates a sense of entitlement. But it is a fraud. The politicians spend your money as soon as it comes into Washington - and then some. You have a promise; that is all.

And now that SS is running into severe deficit, the deal must be once again reneged to maintain sustainability. How is that right? We must ask: How responsible were the politicians that forced an unsustainable system on everyone? How responsible are those who use sophistry and scare the elderly to keep it in place?

The government, in the name of the people, took our wages for years and now it is inadequate - unsustainable? The deal must be recast?

Can anyone blame the young for the lack of confidence in SS? The burden will explode as the boomers reach retirement. When SS started there were 17 people supporting every retired person but now that number is closer to 2 workers supporting each retiree.

When it reached one to one, we may do well to give the money directly to our parents without sending it through DC (where they take their cut) first.

Why shouldn't we cut loose this Ponzi, socialist style pay as you go scheme? And create a system of retirement that is sustainable - a tax free retirement investment the people can own and control themselves?

Alan Bickley

Much of the confusion about Social Security's prospects for survival arises from the fact that the Trustees of Social Security annually publish three - not one - projections. These are labeled High Cost, Low Cost, and Intermediate, and they correspond, respectively, to pessimistic, optimistic and in-between estimates of the program's future health. Journalists and politicians tend to believe that truth and virtue lie midway between any two extremes, and so their story line is based upon the Intermediate projection.

With every subsequent projection, the dates by which the trust fund and the program's ability to pay full benefits are exhausted is pushed farther into the future But the actual performance of Social Security has been far closer to the optimistic forecasts. In plain words, Social Security is not going broke and will not go broke as long as the labor force is working at or near full employment. The only dangers to it are from its ideological enemies, from generalized ignorance, and from long-range mass unemployment.

Hardened enemies of public programs and of Social Security in particular will not be swayed by these facts. But honest reporters alerted to these facts could end the confusion and do much to save a necessary program from ruin.

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