Yesterday, Paul Ryan told conservative radio show host Laura Ingraham that he agrees with Rick Perry that Social Security is a “ponzi scheme.” When asked whether Social Security is a Ponzi scheme, Ryan told the conservative radio show “That is how those schemes work.”
“So if you take a look at the technicality of Ponzi—I would—it’s not a criminal enterprise, but it is a pay as you go system where—you know—earlier investors, or say taxpayers, get a positive rate of return and the most recent investors, or taxpayers, get a negative rate of return,” said Ryan. “Your kids and my kids, Laura, they’re the same age are going to get about a negative one percent on their payroll taxes if Social Security can even pay them their benefit, which it can’t. And so, it is obviously, that is how those schemes work.”
House Republican leaders including NRCC Chairman Pete Sessions and House Republican Conference Chairman Jeb Hensarling have introduced a new plan to end Social Security as we know it. This proves without a shadow of a doubt that Republicans are waging war against Social Security.
Social Security is NOT a “ponzi scheme”. It is a program that keeps senior citizens out of poverty. You pay into the system every time you earn a paycheck. This is called the payroll tax. By paying this tax, you are putting money into the Social Security Trust Fund and when you turn 65, you are able to claim the money that you paid into the system. And in most cases, you get more money back than you originally paid. A ponzi scheme is totally different. According to the Securities and Exchange Commission, “A Ponzi scheme is an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors. Ponzi scheme organizers often solicit new investors by promising to invest funds in opportunities claimed to generate high returns with little or no risk. In many Ponzi schemes, the fraudsters focus on attracting new money to make promised payments to earlier-stage investors and to use for personal expenses, instead of engaging in any legitimate investment activity.” The only people who make money in a ponzi scheme are the organizers of such schemes. Bernie Madoff stole money from the people he convinced to allow him to invest money on their behalf. Those people did not see a return, but a loss of money. Many lost millions of dollars.
Social Security is a guaranteed return. Senior citizens get a monthly check until the day they die and even after that, the surviving spouse or children get survivor’s benefits. Americans work hard for the right to claim the money they pay into the system, and they get that money and most times more than they put in. The government has kept the promise it made to Americans in 1935. And it has never broken that promise. A ponzi scheme is a broken promise that takes money from people and never pays it back. Paul Ryan, Rick Perry and the rest of the Republican Party are lying when they call Social Security a “ponzi scheme.” The real ponzi scheme would be if Republicans were allowed to give Social Security to Wall Street like they have been calling for. Wall Street IS a ponzi scheme. It takes your hard earned money and uses it to gamble. We saw how this turned out in 2008 when the country was nearly thrown into a second Great Depression. Because of the Wall Street ponzi scheme, millions of Americans fell into poverty while CEOs made billions. If Social Security had been in the hands of Wall Street in 2008, it would have been wiped out.
As a government program Social Security does NOT cause poverty. It prevents it. And we must defend it from the greedy hands of these Wall Street friendly Republicans. Because if they destroy Social Security, they destroy the poor and middle class once and for all, which is something they have wanted to do for decades. It’s clear that Republicans are waging class warfare against the American people and handing Social Security to the wealthy would be the biggest prize of all in the GOP war against the people.