Saturday, September 10, 2011

Is US Social Security a Ponzi Scheme?

Republican presidential hopeful Texas Governor Rick Perry who was taking part in a Republican primary debate says, Yes, it is..

Rick Perry said: “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,” Perry said during a Sept. 7 debate of the Republican presidential candidates, reprising a theme from his 2010 book “Fed Up.”

Experts on both Ponzi schemes and Social Security say Perry is wrong. “Ponzi schemes are, by definition, fraud,” said Mitchell Zuckoff, author of “Ponzi’s Scheme: The True Story of a Financial Legend.”

“Social Security is above board,” he added. “We can argue about whether it’s a good system. But you can’t call it a fraud.”

More of this article on Bloomberg