Author of Plan to End Medicare Paul Ryan Calls Social Security A "Ponzi Scheme"

Sep 20, 2011

MADISON-Paul Ryan, already the author of a plan to end Medicare, told a right-wing radio show host yesterday that he agreed with Texas secessionist Gov. Rick Perry’s assertion that Social Security is a “Ponzi scheme.”
Speaking on Laura Ingraham, Ryan defended Perry’s comparison of Social Security, which seniors have paid into and rely upon in their retirement, to the Bernie Madoff-style investment fraud.
“For being such a self-proclaimed expert on economics and finance, it is telling that Paul Ryan deliberately confuses what Bernie Madoff did to the Social Security benefits milllions of Americans have earned by the sweat of their brow,” Democratic Party of Wisconsin Chair Mike Tate said Wednesday. “It looks like the author of the plan to end Medicare is creating the rhetorical conditions under which, to finance tax cuts for the super-rich, Social Security can be ended as well.”

Paul Ryan Called Social Security a Ponzi Scheme. On September 20, 2011, Paul Ryan equated Social Security to a Ponzi scheme. When asked by conservative radio host Laura Ingraham if he agreed with Governor Rick Perry, who earlier compared Social Security to the type of investment fraud, Ryan claimed that he did. “So if you take a look at the technicality of Ponzi—I would—it’s not a criminal enterprise, but it is a pay as you go system where—you know—earlier investors, or say taxpayers, get a positive rate of return and the most recent investors, or taxpayers, get a negative rate of return,” said Ryan. “Your kids and my kids, Laura, they’re the same age   are going to get about a negative one percent on their payroll taxes if Social Security can even pay them their benefit, which it can’t. And so, it is obviously, that is how those schemes work.” [Laura Ingraham, 9/20/11]

Securities and Exchange Commission Defined a Ponzi Scheme as a Type of Investment Fraud. According to the Securities and Exchange Commission, “A Ponzi scheme is an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors. Ponzi scheme organizers often solicit new investors by promising to invest funds in opportunities claimed to generate high returns with little or no risk. In many Ponzi schemes, the fraudsters focus on attracting new money to make promised payments to earlier-stage investors and to use for personal expenses, instead of engaging in any legitimate investment activity.” [Securities and Exchange Commission, accessed 9/20/11]  

 House Republicans Propose Social Security Opt-Out. “House Republicans on Friday introduced legislation that would allow workers to partially opt out of Social Security immediately, and fully opt out after 15 years.” The measure was introduced by NRCC Chairman Pete Sessions (TX-32) and Republican Conference Chairman Jeb Hensarling (TX-05) among others. [The Hill, 6/6/11]