Mailer that was considered controversial by some Republican's from CT Mirror.org
Texas Governor Rick Perry, 2012 GOP Presidential Candidate, has used the term “Ponzi Scheme” in reference to the need to shore up Social Security and the term has both the left and the right in an uproar. The term "Ponzi Scheme" refers to an enterprise that has those at the top making gains, while those at the bottom pay in, yet have no realistic chance of actually benefiting. Today’s Social Security Recipients rely heavily on their benefits, yet for the past two years, they have not received an annual “Cost of Living” living increase. The reasoning: zero inflation according to the Social Security Administration. The methods used to calculate inflation are derived from the Consumer Price Index, calculated by the Bureau of Labor Statistics, which method calculates a “weighted” index on items such as food, which they track but then “seasonally adjust” – therefore, one might use the term “creative accounting”, when looking for a reason why hamburger and chicken are no longer affordable to those who are living on a “fixed income” such as social security. The Bureau of Labor Statistics also has a handy calculator online that allows one to figure out the buying power of a dollar from year to year. According to this calculator, the dollar is worth .4 cents less in 2011 than it was in 2010, based on a 3.6% rate of inflation. Therefore, for 2012 there will be a rise in the Cost of Living for SSI recipients. However, this past year as real inflation took hold; those seniors with only Social Security to rely upon have been making some tough choices. Moreover, in 2012 there will be a slight increase, however, it will be offset by the rising costs of Medicare insurance, which is deducted from the recipients monthly payment”.
What about those about to retire? The Baby Boomers and preceding generations.
One has to understand that with baby boomers about to start collecting unemployment this year, the sheer numbers of those entering the Social Security Systems, and those that are left to pay into the social security systems is somewhat mismatched. Therefore, with fewer high wage earning younger individuals at the bottom, paying into a system, that is top heavy, something has to give eventually. Moreover, the birth Rate for the U.S. is becoming similar to the European birth rate, and and set a new record low in 2010 according to the U.S. Census .
Fewer people paying into a system that supports a massive influx of pensioners is bound to result in chaos (see Europe as model – specifically Greece). Those politicians from both sides of the aisle that to use a tired phrase “kick the can down the road”, are literally insuring that even those individuals set to retire in the next 20 years may see a substantial reduction in benefits. In fact, if one is in their fifties, one can expect their quarterly social security earnings statement to come complete with a “caveat” – “don’t’ rely on Social Security alone” (paraphrased).
One solution would be, in the short term and long term, to allow those who are at the bottom rung to pay a percentage into the program, while giving them an option to invest a percentage in a program similar to the program in place for U.S. Government retirees who are not eligible (or minimally eligible) for Social Security. These programs do come with certain risks, however, over a period time, just like any retirement investment account, the future retiree is advised go move monies into more “secure” investments that might yield a small annual percentage, but are also “safe”. Therefore, the U.S. working populations should enjoy the same benefits as say, members of Congress.
Obviously, to yank the proverbial rug out from under those receiving benefits now is not the objective of either political party, and or politician, including Rick Perry. However, Perry’s use of the shocking term “Ponzi Scheme” is certainly a conversation starter, and one which is not , when viewed literally, incorrect.
With the Federal Governments hands in nearly every aspect of American’s lives, from health insurance,(so called “Obama Care”, to Medicare and Medicaid), to retirement insurance (Social Security) and now student loans (passed in a spending bill while everyone was looking at Universal Health Care), the U.S. Citizen is now tethered to the Government from literally cradle to grave. The only real option to safeguard these programs is to outsource to the private sector, and at the same time increase the options available to those purchasing health insurance, retirement accounts and student loans, which would result in competition, and lower rates (or increase returns on retirement accounts).
See Rick Perry’s editorial in USA Today Here: Titled: “I am going to be honest with the American people” . It’s time someone was. Unfortunately, one can bet the house, that those with political gains to be had, will continue to play the “Social Security Card”, regardless of any statement Rick Perry or anyone else makes, by sending out mailers, holding “Senior Appreciation dinners in Congressional districts”, and blasting Republican’s as those ready to take away benefits. It has been a practice for years, while Republican’s who do have solid ideas (see George Bush’s attempt at Social Security Reform blocked by the Democrats house and Senate, which basically allowed for those not yet retired to have a choice between standard Social Security and paying into a system which was modeled on the one that Congress now has.), and those that wish to now run for President, are busy saying all is well, in fear of being “unelectable”. Rick Perry may not be necessarily as eloquent a speaker, or as polished at the debate forum as Governor Mitt Romney (yet) or (name a politician from any of the two major political parties), however, he has a valid point.
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