Ryan: Social Security Isn't a Ponzi Scheme
2:12 PM, Sep 22, 2011 • By JOHN MCCORMACK
The other day, a number of publications reported that Paul Ryan had called Social Security a Ponzi scheme. "Paul Ryan Supports Rick Perry: Social Security Is A Ponzi Scheme," read the Huffington Post headline. The Hill reported: "Social Security fits the technical definition of a Ponzi scheme, Rep. Paul Ryan (R-Wis.) told conservative Laura Ingraham on her radio show." But as Michael Warren pointed out, Ryan never said Social Security is a Ponzi scheme.
Rep. Paul Ryan of Wisconsin
"No, no,” Ryan told me today when asked if he said Social Security is a Ponzi scheme. "It’s not a criminal enterprise, which obviously Ponzi and Madoff were. Criminal intent was the basis of those efforts." Ryan noted there are similarities between pay-as-you go systems and Ponzi schemes, but the distinction appeared lost on some in the media. "From a technical standpoint, pay as-you-go systems where older investors and retirees get a positive rate of return and more recent and younger investors get a negative rate of return, it’s what’s happening in Social Security and what happened in those schemes as well," Ryan said today. "The point is it’s a popular program that’s critical, it’s going to have across the board benefit cuts that will hit current seniors if nothing is done, and it’s giving the next generation a bankrupt program. So you have to reform it to save it--to fix it.”
Ryan hopes and expects the Republican candidates will develop specific plans to reform the program as the race develops. "It’s easier to defend yourself against attacks when you actually have details to respond with," he said.
Ryan said that the recent congressional special election in Nevada showed how Republicans can fend off Democratic scare tactics on entitlement reform. Republican candidate Mark Amodei praised Ryan's Medicare reform (although he said he would have voted against the GOP budget because it didn't cut enough). "They wrapped it around his neck and he won big-time,” said Ryan. The lesson from that race, Ryan said, is if Republicans stand their ground, explain their plan, and "contrast what we’re proposing versus what the president’s plan does, we win hands down.”
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