>Social Security A Ponzi Scheme?
Ronald DuBois Bogota, NJ
Dear Mr. Krauthammer, I love reading your articles and watching you on FOX, but I’m curious about todays article on Social Security being a Ponzi scheme. I thought a program (or an investment vehicle, etc) had to be incapable of being sustained in the long run, to be a Ponzi scheme.
When Social Security started, it was self-sustaining, and was capable of staying that way – in fact, over the years it amassed quite a reserve fund. Invested properly, the Social Security Trust Fund would still be solvent, and there would be no problems paying our seniors, including me. However, to have accrued the interest necessary to remain solvent, money had to be in the Trust. The Government “borrowed” the money, replacing it with Government bonds (IOUs) that paid little interest. Because of this, not only was the people’s money gone, but when the Government had to pay the retirees, it had to redeem its own bonds – with taxpayer money – to make the payments, further reducing the treasury. (I believe issuing bonds to ourselves, and then redeeming them with our own, taxpayer, money, is called monetizing debt, a real no-no.) So Social Security is not, and never was, a Ponzi scheme; it was simply theft by our own Government. I think it is important that the people understand that it was the Government stealing the money to use for other things, that made Social Security insolvent, and not because it was a Ponzi scheme, as some politicians are claiming.