With the GOP debate just a few days behind us and with Obama’s jobs speech occuring just last night, you probably have a few political messages floating around in your mind. But I want to make sure that people get one thing straight–Social Security is not a Ponzi scheme, as Tea Party favorite, Rick Perry, would like us to believe.
Rick Perry hammered away at Mitt Romney on Wednesday night, holding fast to his outrageous claims that social security is a "Ponzi scheme" and a "failure". But Governor Perry might be painting himself into a corner, considering that the program has been a popular bedrock for 75+ years. It seems as though the Republican party is faced with an ideological battle between its fanatic Tea Partiers and its more middle-of-the-road conservatives. How that will play out, is yet to be seen.
However, what bothers me the most about the Tea Party’s claims about social security is the argument that it is some kind of "hand out"–people pay into this system their whole working lives. True, the system is in need of some desperate reforms, but that does not mean the same thing as abolishing it all together–let’s not throw the baby out with the bath water. In 1983, even the staunchest critic of so-called "big government", Ronald Reagan, vowed that "The Social Security system must be preserved".
The biggest problem is that people are living a lot longer than they were back in the 1930s and there are fewer workers for each retiree. But consider what life was like before Social Security was created in 1935, as many elderly Americans were in poverty. Even after the first Social Security check was disbursed in 1940 and as late as 1959, 35% of elderly Americans lived under the poverty line. Rather than dismantling the program all together, Nobel Prize winning economist, Peter Diamond, favors a mix of cuts and revenue increases to preserve the popular and life saving system.
