Ping-Ponzi Schemes

by Michael Walsh

In the great synchronicity of the Zeitgeist, today seems to be Social Security Day in the American media. Here’s my contribution to the discussion in today’s New York Post:

Social Security was long known as the “third rail” of American politics — touch it and die. But now one politician is not just touching it, but grabbing it with both hands and giving it a long-overdue yank.

Texas Gov. Rick Perry has set the conservative cat among the New Deal pigeons with his increasingly blunt assessments of the 76-year-old program as a “Ponzi scheme” and a “monstrous lie.”

Despite warnings from his chief rival for the GOP nomination, Mitt Romney, that Republicans will be “obliterated” as a party if they challenge the program’s legitimacy, Perry’s unlikely to let up in tonight’s “Tea Party” debate in Tampa.

Some fearful seniors probably will turn on the GOP, even though none of them stands to lose a penny in any conceivable reorganization of Social Security.

But maybe the American people really are finally ready for some straight talk about entitlements.

If not now, when? When the entire house of entitlement cards that is the legacy of the New Deal and the Great Society — and the fetish-like fervor with which the Left clings to their “signature achievements” — completely collapses? I mean, really — Winning the Future?

Already Social Security, Medicare and Medicaid account for 43 percent of the federal budget, and their rapacious, auto-pilot growth is inexorable. By 2049, these three major entitlement programs will consume all projected federal revenues. By any rational standard, they are the very definition of “unsustainable.”

That’s exactly the message the Republican nominee must deliver to the electorate if the nation is to survive the entitlement cancer.

As Andy’s pointed out elsewhere (and something I had to cut from my piece for space), Mitt Romney has said just about the same thing in the past. For political reasons, he’s trying a tactical assault on Rick Perry — so is Michele Bachmann, but her candidacy is just about finished — when the two of them should be strategic allies in the battle for Washington. If you set out to take Vienna, you don’t dawdle for a while in Linz having a torte and Kaffee mit Schlagobers while your rival is settling into his seat at the Staatsoper for a command performance of Goetterdaemmerung.

In some ways, it’s even worse than a Ponzi scheme. In his pyramid racket, Carlo (Charles) Ponzi fleeced only willing suckers, but Social Security taxes are compulsory.

Not so the payouts. The Supreme Court ruled in 1960 that the law that created Social Security gave taxpayers no legal rights to their Social Security “contributions”; benefits can be changed or even eliminated by congressional whim at any time.

That’s right, kids — it’s not a question of whether it will vanish but when. And you can look it up.