Political Animal


September 21, 2011 9:25 AM ‘Ponzi scheme’ rhetoric becoming GOP standard

By Steve Benen

Last week, during a debate for the Republican presidential candidates, Mitt Romney tried his best to make Rick Perry look far outside the American mainstream. Specifically on Social Security policy, Romney seized on the frontrunner’s rhetoric, arguing, “[T]he term ‘Ponzi scheme’ I think is over the top and unnecessary and frightful to many people.”

For much of the country, that’s probably true. For the Republican mainstream, Romney’s warnings aren’t resonating at all.

The Republican chairman of the House Budget Committee on Tuesday drew fire from the Democrats for backing Texas Gov. Rick Perry’s description of Social Security as a “Ponzi scheme.”

Social Security fits the technical definition of a Ponzi scheme, Rep. Paul Ryan (R-Wis.) told conservative Laura Ingraham on her radio show.

“It’s not a criminal enterprise, but it’s a pay-as-you-go system, where earlier investors — or say, taxpayers — get a positive rate of return, and the most recent investors — or taxpayers — get a negative rate of return,” he said. “That is how those schemes work.”

DCCC spokesman Jesse Ferguson said in a statement, “Ryan’s belief that Social Security works like a Ponzi scheme proves — once and for all — that House Republicans have really declared a war on seniors. A Ponzi scheme is Bernie Madoff ripping off Americans — not Social Security benefits that seniors earned and depend on during retirement.”

That’s true, but Republicans don’t seem to care. References to “Ponzi schemes” have gone from borderline extremism to GOP conventional wisdom in about a week. Perry seems to have gotten the ball rolling, but his line has now been endorsed by Paul Ryan, Indiana Gov. Mitch Daniels (R), and other GOP lawmakers.

Romney thinks this kind of talk is “over the top and unnecessary and frightful to many people”? For millions of voters, probably. For his party? Apparently not.

Steve Benen is a contributing writer to the Washington Monthly, joining the publication in August, 2008 as chief blogger for the Washington Monthly blog, Political Animal.


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  • DAY on September 21, 2011 9:37 AM:

    When you are running for president of your frat house you do not say things that appeal to members of the other fraternities. Or sororities. Or the faculty, student body at large, your parents.
    That can come after you have won the house election, and need to not appear crazy, after all.

  • MuddyPolitics on September 21, 2011 9:39 AM:

    Whatever language they want to use to describe it, all of the frontrunners want to privatize Social Security.

    "How the left is losing and the Right is framing the Social Security debate"

  • c u n d gulag on September 21, 2011 9:41 AM:

    On this "Ponzi Scheme" rhetoric, I think the Republicans may find that, like 'Fonzie,' they've

  • T2 on September 21, 2011 9:43 AM:

    I predicted that two weeks after Perry made the Ponzi comment, it would become the GOP standard buzz line for Social Security. It has. Let's see if that helps them win.

    An interesting map on Poverty I saw showed the biggest poverty increase pocket to be....the deep south. Which is also a Republican stronghold. Those two seem to go together. Add in poor educational systems in those areas also, and what do you get. Dumb poor people as a direct result of them voting for GOP politicians who put policies in place to keep them dumb and poor. History will show the GOP/TP revolution was based in voters consistently voting against their best interests. Hummmm....what else about the deep south brings these folks to vote against their interests?

  • Josef K on September 21, 2011 9:43 AM:

    Can 'Romney's Party' even spell "ponzi"? Its asking too much for them to define it, I suppose, but surely they can at least spell it correctly, right?


  • r on September 21, 2011 9:44 AM:

    This is how it goes -- the Rs take another step, and the "liberal" media treat it as a legitimate position, and the country marches further to the right.

  • stevio on September 21, 2011 9:54 AM:

    Once again Obama is running from behind. USE THE FRIGGIN BULLY PALPIT and return the rhetoric with honest facts.

    This POTUS truly is looking more and more like a wanna-be. I bet Hillary would be firing retorts at this horse puck once an hour...


  • walt on September 21, 2011 9:54 AM:

    Their rhetoric has a long-term purpose: demonize SS to the point that a lie becomes conventional wisdom. All the evidence suggests it's working.

    Republicans win two ways here: their initial premise also implies that government is virtually a criminal enterprise (that's what a Ponzi scheme is, after all). The solution is part two. Privatize everything, which becomes the triumph of saving the middle class from a rapacious criminal enterprise intent on giving away their money to "others" (i.e., minorities).

    I tell everyone I talk to if they want to help Republicans, keep saying "I know SS won't be there when I retire". That's what Republicans want everyone to believe. From all appearances, it's succeeding.

  • karen marie on September 21, 2011 9:55 AM:

    The mistake you make, Steve Benen, and that the DCCC makes is that this is not just an attack on current seniors but a much wider group of people -- everyone who will have nothing but Social Security if they survive long enough to retire.

    That's the story, and to limit it to "seniors" legitimizes, in a subtle way, the Republican argument that Social Security won't be there for current non-seniors.

    Those of us who are in their 50s and 40s, and younger, should be the ones most up in arms about this mess.

  • skeptonomist on September 21, 2011 9:56 AM:

    The false "Ponzi" aspect arises because of demographics - there is no escaping the fact that as population increase slows down, people will have to pay relatively more to support the elderly. But privatizing SS is not an escape - the stock market is not going to magically increase its returns to compensate for demographics. The real swindle is in implicitely promising that privatization is a solution to demographics.

  • Buford on September 21, 2011 10:00 AM:

    Propaganda is a powerful tool. It seems to be overwhelming the dems, who continue to be clueless on how to counter this tactic. The people behind the extremists are smart, even though the candidates are not. Their only redeeming feature is ,they will be great meat puppets.

  • zeitgeist on September 21, 2011 10:09 AM:

    i have not heard one person ask (literally if a media figure, rhetorically if a Democrat speaking out) if Americans who have watched the stock market the past 3 months wish all of their retirement security were wrapped up on Wall Street.

    Even more important, someone needs to point out that nothing about Social Security is guided by laws of nature. When Ryan says newer investors get a negative return, everyone needs to point out over and over that if true, it is a purely a policy choice -- the return is lower because that is what the Republicans wanted to happen, and that is what they voted for. Elected officials could make the return higher anytime they wanted to make that a priority.

    That the media and Democrats are letting them off the hook so easy is appalling. This is fish-in-a-barrel stuff.

  • slappy magoo on September 21, 2011 10:15 AM:

    I'm starting to wonder if maybe the Republicans are willing to sacrifice the support of seniors in exchange for a new, presumably selfish generation, one that is more ignorant because the school systems are awful, fearful because their standard of living will be lower than their parents and grandparents, and angry because getting everything you want is SUPPOSED to be the American Way, and sacrifice/doing-without is for people in poorer countries.

    Let's face it, we've all made/heard the joke that the average age of a Fox News viewer is "dead." Old people aren't getting any younger, and 2008 saw record numbers of young people come out to vote, and they voted for Obama (and they didn't come out as much for the midterms). For all the awful stupid stuff (and awfully stupid stuff) the GOP does, it doesn't take much imagination to suppose their goal is to take a generation more ignorant of social issues than the one before it (even if on social issues like gay marriage they are more tolerant), stand in the way of their progress so they're broke and scared...and then blame it on The Guy In Charge, The One They Voted For.

    It'd explain why they stopped fighting so hard against DADT. And it certainly also explains why they're working so hard to keep the economy stagnant and the costs of education so high. Keep 'em dumb, keep 'em scared, then blame someone else.

    Don't scoff, because if it IS their plan, there is some evidence that it's working.

  • Trollop on September 21, 2011 10:21 AM:

    The GOP is a Ponzi Scheme, they're the oldest one in the country!

  • PTate in MN on September 21, 2011 10:57 AM:

    You'd think the Dems could be stronger on this, but I think they are gobsmacked. It's as if the Republicans started campaigning on "the sun rises in the west" platform. "Huh, whazzit!?!!" is the only possible response.

    Keep in mind that the strategy of the Republican party for some time has been to undermine Americans' confidence in their institutions of self-government. The repeated claim that "social security won't be there for you, young person" is just another front in their war on a functioning civil society. What's amazing to me is that everyone under 40 isn't outraged. Some even vote Republican because they are are convinced--being young, greedy and inexperienced in the ways of the market--that they personally will be better off if SS is privatized.

  • kc on September 21, 2011 11:03 AM:

    The Republican pundits and pols will not stop saying "Ponzi scheme" unless and until they pay a political price for it. This is how Republican memes trickle down. In a couple of months you'll hear dumb-ass Republican voters all over the country dutifully repeating the line that SS is a "Ponzi scheme." And the likes of Chris Matthews will be asking their hapless Democratic mouthpiece guests (if they haven't already), "Republicans say that Social Security is a Ponzi scheme. How do you answer that? Isn't Social Security just a big Ponzi scheme?"

    Mark my words . . .

  • kc on September 21, 2011 11:06 AM:

    Karen Marie, you are absolutely right.

  • Dutchman on September 21, 2011 11:09 AM:

    From the WaPo, September 20, 2011 Op-ED..How Social Security Works. This was an answer to Charles Krauthammer column calling SS "The Great Ponzi debate".


  • RLinMass on September 21, 2011 11:20 AM:

    OK, let's get this clear. Again.

    There is no "rate of return" in SS. That's an artifact of a fairly common analysis, an artificial shorthand for "if (as in HYPOTHETICAL) we were to look at SS in terms of 'return on investment', here's what you get..." But it is and has only ever been just an analytical metaphor. Perry's an ignorant yokel, so he loves this rationale for the Ponzi malarkey. But now the "very serious" and "smart" Mr. Ryan reaches whips this out, too.

    IT'S JUST A METAPHOR, MR. RYAN. That's not how the system actually works. SS is a system in which current earners are taxed to pay current benefits (OK, two targets: current beneficiaries and the "trust fund"). Today's taxes in, today's spending out - JUST LIKE EVERY OTHER PROGRAM - DEFENSE, FARM SUBSIDIES, HIGHWAY CONSTRUCTION, EVERYTHING - YOU IGNORANT CHEESE-HEAD!

  • Rick Massimo on September 21, 2011 11:26 AM:

    Coupla weeks ago, Stephen Colbert noted, with outrage, that the $10 bill you put into the bank is not the $10 bill you get when you withdraw - in fact, he howled, last time he was there they tried to give him two $5s!

    That's about the size of it.

  • PTate in MN is right on September 21, 2011 11:42 AM:

    Look at the New York special. Nobody is even paying attention to policy, at all. They're all going to vote Republican in November 2012 after Europe crashes and takes the world down with it. They won't be happy, and Obama is a Democrat. END ANALYSIS.

  • bigtuna on September 21, 2011 11:49 AM:

    the degree of stupidity, ignorance, or willful deceit going on here is reprehensible. SS is a pretty easy program to explain and understand. But, one has to want to do that ..

    what is really depressing is that of all the fiscal problems we face, SS is relatively simple to understand, and fix. And the fix helps support the economy. The republicans are throwing more mud to make more problems. The Dems need to develop some teams to respond to variosu attacks, and have each team focs on their own issue.

  • ohhenery on September 21, 2011 12:19 PM:

    Ponzinator: one who attaches something bad to something good to increase negative returns.

  • SYSPROG on September 21, 2011 12:47 PM:

    It is not enough to defend SS. We must call out these dweebs as LIARS. They KNOW it's not SS but they insist on lumping the 'entitlement programs' to get rid of them all. SHOW ME THE FACTS mofo's...I buy Ezra Klein's analysis before any of these entitled lying jerks spin.

  • Senior Citizen on September 21, 2011 1:38 PM:

    The only ponzi's I know are these elected officials we have running our government in Washington.

    Washington, keep your hands off the money we saved to retire with. Leave SS alone! It's been around a longer than you know-it-all's.

    By the way, since George Bush did such a great job (HA) and froze COLA on SS for two years, when will we start getting it back? There's never any mention of that in any of your speeches.

  • liam foote on September 21, 2011 4:48 PM:

    As a native Badger and Cheesehead, sometimes concurrently, I have to wonder if Rep. Ryan may be getting into serious political difficulty in Dairyland.

    Family and friends in Packerland reported the negative public reaction (mostly GOP constituents) to his town hall budget presentation, and now he is aligning himself with rhetoric of the Ponz.

    This is particularly sad because Paul Ryan has always been viewed as a rising star and a possible member of the GOP ticket in 2016.