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More Nonsense About Social Security

This message is from our friends at the Strengthen Social Security Campaign:

Presidential candidate Rick Perry’s unfounded attacks on Social Security continued this past weekend in Ottumwa, Iowa, where he once again declared Social Security “is a Ponzi scheme.” He continued, “The idea that [young people are] working and paying into Social Security today, that the current program is going to be there for them, is a lie. It is a monstrous lie on this generation, and we can’t do that to them.”

Eric Kingson, co-chair of the Strengthen Social Security Campaign, issued the following statement in response to Perry’s claims:

“Governor Perry’s doesn’t understand the differences between Charles Ponzi’s illegal scheme to defraud investors, which lasted 200 days, and Social Security, which has been operating continuously and successfully for 76 years.  In his ongoing attack on Social Security, he conveniently overlooks that Social Security, unlike a Ponzi scheme, has a secure, on-going and dedicated revenue source – income from payroll tax contributions.  Social Security is also monitored carefully by elected officials who have strong incentives and the capacity to make adjustments that are needed from time to time.

“Social Security is the opposite of a Ponzi scheme, which is a fraud, a deceptive promise made by a swindler that investors will reap huge returns.  Social Security is a promise by the United States government, and a set of protections earned by working persons, that insures against lost earnings resulting from severe disability, retirement and death. And it delivers on that promise, which is why it is America’s most successful and popular federal program. 

“Like any system, Social Security can experience problems, but it can never go bankrupt.  Its major source of income is from the contributions of workers and employers; as long as there are workers, Social Security will have income. Even if Congress took no action, Social Security can pay 100 percent of promised benefits for the next 25 years and more than three-quarters of benefits after that. Around 2036 there is a modest funding gap requiring modest increases in revenues to guarantee everyone 100 percent of the benefits that have been earned. Social Security has faced worse financial problems in the past, but Congress has never failed to act to ensure its funding and that promised benefits are paid in full and on time.

“Social Security’s long-range funding gap is relatively easy to solve – it’s a matter of priorities. All it takes is to scrap the payroll tax cap so that Social Security contributions are made on all wages above $106,800. That would affect the richest 6 percent of Americans. Rick Perry’s wealthy donors might not like that but two-thirds of Americans support it.  

“That Governor Perry’s views about Social Security are so misguided and extreme should come as no surprise.  Remember, this is the same man who questioned the constitutionality of child labor, minimum wage, food safety, Medicare and Social Security laws.  The same man who has suggested that Texas has the constitutional right to secede from the union. 

“The future of Social Security is too important to the well-being of future generations of workers to be shaped by incorrect comparisons and misleading arguments.  Governor Perry would do well to heed the advice of former President Dwight D. Eisenhower who wrote in 1954 that ‘Should any political party attempt to abolish social security, unemployment insurance, and eliminate labor laws and farm programs, you would not hear of that party again in our political history. There is a tiny splinter group, of course, that believes you can do these things. Among them are H. L. Hunt [and] a few other Texas oil millionaires, and an occasional politician or business man from other areas. Their number is negligible and they are stupid.’”