Is Social Security A Ponzi Scheme?

Perry, in the Republican debates tonight, stepped assertively forward, but might have left himself open to character assassination or at least to looking very undiplomatic and over the top.

But is his description accurate?

The definition: 

"An investment swindle in which high profits are promised from fictitious sources and early investors are paid off with funds raised from later ones."

Of course, the context of a "swindle" is not valid, but the vernacular is that it is something where people pay in money now and hope that they get paid back later by future social security contributors.  

Of course, the government guarantees the later payments, but the source of the government funds is tax payers - therefore future generations will be stuck with a greater tax burden.

The Social Security Trust Report itself says that we are behind (short) by $7 trillion (called unfunded liabilities already incurred).

Social security is, indeed, a set up where later contributors put in the money for current retirees, plus hopefully something for themselves. 

There is no actual money in the social security trust fund, which means that the federal government must pay social security from the moneys it receives (in payment for the bonds issued by the government so it could take the money and spend it).

So, other than the colorfulness for making his point very, very strongly, social security is a ponzi scheme. 

 

 

The Rational Non-Politician

See the discussion on Social Security .

Again, if any facts or reasoning are incorrect please correct them, as the objective of this site is to be fact-based and rational - with no labelling or irresponsible reactiveness.