Perry Declares Sky Is Blue, Media Shocked
We can say one thing of the new GOP front-runner: Governor Rick Perry knows how to fire up a crowd. The leftist media blew up this week when Perry reiterated a point from his book Fed Up! that Social Security and Medicare are Ponzi schemes.
"There is nothing at all about Social Security that is anything like a Ponzi scheme," declares the Washington Post's Plum Line blog. (Bernie Madoff's lawyers must be wondering where this guy was during jury selection.) The blogger claims Social Security doesn't resemble the "deliberate and outright fraud" of a Ponzi scheme but is simply a promise to take taxes from children for the benefit a certain group. (Whew, thank heaven that's cleared up!)
What this already troubling description of Social Security leaves out is that almost every subdivision of the program includes the word "insurance." When Franklin Roosevelt campaigned for the law, he routinely claimed that Social Security was system of insurance that would provide a pension income to the elderly. It wasn't until the 1937 Supreme Court case Helverling v. Davis where the same administration argued that Social Security taxes were not insurance premiums at all, but a generic tax to be spent as government saw fit. But the deception didn't stop there. To the present day, statements on the policy come regularly to the program's participants, perpetuating the illusion of a traditional retirement plan. But of course, only an uncouth Texan could describe that as "deliberate or outright fraud."
To be fair, Timothy Carney of the Washington Examiner points out one major difference between Social Security and a private Ponzi scheme: the option to walk away. When Bernie Madoff's investors found that he was spending instead of investing their money, at least they were able to stop sending him payments. Working Americans aren't so fortunate.
Despite the rebuttals spanning the far-left sites, most mainstream outlets don't address the substance of the Perry's criticism (perhaps because of the logical somersaults required to call a pension program which is dependent on new investors to pay previous investors something other than a Ponzi scheme). Rather, these outlets cite the program's popularity as a sort of criticism of Perry's comments. Even the governor's own communications director, Ray Sullivan, has tried to soften Perry's Ponzi rhetoric.
It's not hard to see why media prognosticators and political consultants expect candidates to be timid in criticizing the federal government's retirement programs. A CNN poll released August 10, 2011 found that nearly two-thirds of Americans want no major changes to Social Security and Medicare.
That popularity is predictable. Free money tends to garner a lot of support. Though it's not really fair to call those programs "free money." After all, retirees paid in their whole lives for the privilege to garnish the wages of their children and grandchildren.
But, to be more serious, it's not fair to the retiree to cut off promised income and medical care, nor to require current workers to pay the retiree's benefits. As in the case of private Ponzi schemes, both new investors and old investors are eventually left with a fist full of promises and no money to cover them. With government's seniors programs, financial failure is only a matter of time. And while Senate Majority Leader Harry Reid likes to call Social Security "the most successful social program in the history of the world" and tell his political foes to "back off," the rest of us have no use for such deep denial.
The growing shortfalls of our public Ponzi schemes makes Perry's candor not only refreshing, but necessary. Retreating from the substance of those comments would be an ominous sign for America. Neck-deep in debt and with almost no economic growth, we have too little time to let popularity overrule the truth -- on Social Security, Medicare, or a host of other federal programs. If the front-running candidate for the limited-government party, who campaigns on the heels of 2010's historic conservative victory, can't be honest about problems as obvious and important as Social Security and Medicare, we have scant hope for an America revival.
So let Mr. Perry speak his mind. He might end up saying that unemployment payments incentivize joblessness. He could point out that government spending isn't truly stimulative because government can't put dollars into the economy without first taking those dollars out of the economy. He may declare that individuals spend their own money wiser than governments spend other people's money. Maybe he'll tell us the sky is blue or that Texas is hot in July. The liberal media will go crazy, but straight talk from our political officials is something we desperately need right now.