Huffpost Politics
Jordan Howard Headshot

Paul Ryan Supports Rick Perry: Social Security Is A Ponzi Scheme

Posted: Updated:

WASHINGTON -- Speaking on conservative radio on Tuesday, Rep. Paul Ryan (R-Wis.) agreed with Texas Gov. Rick Perry's (R) claim that Social Security is a "Ponzi scheme."

When asked by host Laura Ingraham on Tuesday whether the country's social insurance program is a Ponzi scheme, Ryan replied, "That is how those schemes work."

"So if you take a look at the technicality of Ponzi -- I would -- it's not a criminal enterprise," he said, according to a transcript. "But it is 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."

Democrats immediately criticized Ryan's comments.

"Republican Budget Committee Chairman Paul Ryan's belief that Social Security works like a Ponzi scheme proves -- once and for all -- that House Republicans have really declared war on seniors," said Jesse Ferguson, a spokesman for the Democratic Congressional Campaign Committee, in a press release. "A Ponzi scheme is Bernie Madoff ripping off Americans -- not Social Security benefits that seniors earned and depend on during retirement."

Ponzi schemes, made famous in 1920 by Charles Ponzi, are predicated on delivering large returns to investors with money received from new investors. The Securities and Exchange Commission definition of a Ponzi scheme is, "an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors."

Perry called Social Security a Ponzi scheme in his 2010 book Fed Up!, and he defended the characterization in a Sept. 7 GOP presidential debate.

Since then, some Republicans have come out in support of the governor, including Indiana Gov. Mitch Daniels (R) who said, "As far as it [Social Security] goes, absolutely it is a Ponzi scheme."

Additionally, this past June, Reps. Pete Sessions (R-Texas) and Jeb Hensarling (R-Texas) introduced legislation that would allow workers to partially opt out of Social Security immediately and fully opt out after 15 years.

Around the Web

Entitlement Hater Paul Ryan Was A Social Security Baby

A Roadmap for America's Future | The Budget Committee Republicans

Paul Ryan already benefited from the Social Security fund he now ...

Daily Kos: Entitlement-hating Paul Ryan collected Social Security ...

Former Social Security recipient Paul Ryan called out for proposed ...

Ayn Rand Fanboy Paul Ryan Used Social Security “Hammock” to ...

Ayn Rand, Paul Ryan: Social Security Recipients Against Social ...

Paul Ryan's Radical Vision: Targets Social Security, Medicare ...

Ezra Klein - Rep. Paul Ryan's daring budget proposal

Stephen Herrington: Paul Ryan's Killing of Social Security and ...

Social Security's 'Last Legs' Seen Carrying Retirement System for Decades