When Texas Governor RIck Perry decided to employ a certain bit of right-wing political rhetoric, calling Social Security a “Ponzi scheme”, he opened a door for his opponents in the campaign for the Republican nomination for President.
The problem for Perry’s opponents, especially for Mitt Romney, is that by walking through that door, by attacking Perry’s remarks and consequently by defending Social Security, the longest and biggest example of a socialistic remedy to human need in American history, his opponents position themselves to the left of Perry—where the Republican base is unlikely to place its trust or its votes.
The fact is, the metaphor of a Ponzi sheme being applied to the alleged fraudulent promises of Social Security is one that Republicans and conservative writers have been advancing for decades now.
For example, Peter J. Ferrara, who served as a policy advisor in the Reagan Administration, and is considered a conservative expert on Social Security policy, wrote in his 1980 work, Social Security: the inherent contradiction:
“[Social Security] is like a Ponzi sheme or chain letter…those who get into the system first make money quickly.”
In promoting the book, the Cato Institute, which published it, says “[Ferrara] presents conclusive evidence that social security has been sold to the American people by deceit and misrepresentation”. And the Cato Institute has a lead article on its website today announcing “Yes, Social Security Is a Ponzi Scheme.”
And all the way back in 1956, the medical industry publication, Medical Economics Magazine, published the following analysis of Social Security, comparing the original Ponzi scheme positively to the version of it allegedly perpetrated by the Federal government on workers:
“Ponzi had to induce his customers to come in voluntarily; whereas the Government now forces 65 million workers to ‘invest’ $6 billion a year in its glorified version of the Ponzi scheme.”
In recent years, hundreds of books and articles have been published by conservatives making this same case. So, when Perry’s book, Fed Up!, used the Ponzi scheme metaphor in 2010 to describe social security, he was following in an established conservative tradition.
Perry reportedly even echoed the notion suggested in the 1956 Medical Economics quotation that Charles Ponzi himself would have been embarrassed by the extent of the supposed fraudulent nature of Social Security:
“It probably is a program that even makes Mr. Ponzi feel pretty bad if he were still alive.”
If Mitt Romney, who has been informed by his advisers that Perry’s Ponzi comment is a campaign-ending gaffe, continues to attack Perry on the Ponzi front, he is likely to discover that harshly attacking Social Security is actually the well-established traditional Republican position.
And this is what Perry acknowledged in last night’s Republican debate:
“It has been called a Ponzi scheme by many people long before me”.