In response to republican presidential candidate Rick Perry's comments in a recent republican debate that Social Security is a Ponzi scheme, Teresa Ghilarducci sets the record straight on the latest NY Times "Room for Debate" blog entitled "Is Social Security a Ponzi Scheme?" and on "The Takeaway" with Celeste Healee.
A Ponzi scheme is a short-term criminal enterprise. Social Security is a rock-solid social insurance program that protects millions of Americans. The Social Security system balances its contributions and its benefits so that tax rates are scheduled to pay for the benefits promised. The only thing that could transform Social Security into a Ponzi scheme would be a scoundrel president and Congress ending the system. Otherwise, Social Security is a pay-as-you-go intergenerational and social insurance program based on a sound public finance model that meets its promises.