DAYS OF PONZI! On-line, the hapless New York Times staged a strange debate!


PART 4—AS THE DISINFORMATION CONTINUED: Voters have been disinformed about Social Security for decades.

The disinformation is all around us—has been for a very long time. And the disinformation is still all around. Remember what happened when Ashley Carson appeared on Countdown last year?

Carson, a very bright (younger) woman, was executive director of the Older Women’s League. She had criticized Alan Simpson for his latest ridiculous comments and conduct concerning Social Security. On Countdown, she spoke with guest host Lawrence O’Donnell, who quickly offered this:
O’DONNELL (8/30/10): Ashley, there are problems in Social Security for you. It is solvent until 2037. But workers your age who are contributing to Social Security every day, we can currently tell you that when your time comes to collect, the money will not be there, according to all the projections that we have today. That’s one of the reason the commission is looking at it.
“The money will not be there!” Luckily, Carson pushed back with accurate counter-statements, though O’Donnell continued to misstate all night. (For fuller excerpts, click here.)

But then, if you’re an American voter, you’ve been buried in disinformation about Social Security for your whole life. Example:

In May 2000, Candidate Bush began to push his proposal for private accounts in Social Security. Candidate Gore called the proposal a risky scheme. He was soon getting crushed by the mainstream press.

Send in the disinformation! Just before the deluge, Chris Matthews spoke with Senator Bob Kerrey, who had brainstormed with Candidate Bush about his bold proposal. Before long, Matthews was offering these words of wisdom:
MATTHEWS (5/9/00): Why does the president and every other politician who keeps—keep this Ponzi scheme going? They refuse to recognize that the population's getting older, that the ratio of people working compared to the ratio of people retired is getting higher. It's going to be a lower— As you pointed out in the beginning tonight, the younger worker under 40 is not going to see much of a return on his Social Security payroll tax. Why doesn't somebody like Clinton build that bridge to the 21st century? He keeps promising to build it. He's almost out of office. Do you see any signs from the White House that the president will reform Social Security before he leaves?

KERREY: No, I think that's very unlikely.


MATTHEWS: Gore is obviously willing to not do anything because it keeps the older people happy right now, right?

KERREY: Well, that is a, that is, I mean, part of the problem—and it's not just the vice president.
Social Security was a Ponzi scheme! But then, voters are still getting disinformed on Hardball this very week. It’s true that Matthews has been repurposed—that he now serves a different corporate master. But this Tuesday night, he was too stupid, too distracted, too mentally ill to challenge what George Pataki and Pat Buchanan said.

Background: As he started, Matthews was noting the political problems caused by a certain flamboyant term—a flamboyant term he himself has used all through his career:
MATTHEWS (9/13/11): You don’t think "Ponzi scheme" has been heard by the average person living down in south Florida, the average person in retirement right now? They haven’t heard that word, "Ponzi scheme?”

PATAKI: Well, they`re certainly going to hear it a thousand—they’re going to hear it 100,000 times between now and next November if Rick Perry is the nominee. But I think he can lay out a reform of Social Security that says, “You know what I mean, it’s underfunded, it’s not going to be there for our children.”


PATAKI: Everybody knows that’s true.


PATAKI: Chris, it’s not a Ponzi scheme. It’s an underfunded entitlement program that’s going to go bankrupt and run out of money if we don’t fix it. And I think there’s plenty of time for the Republican nominee—


“Everybody knows that’s true!” Apparently, that includes Matthews, who didn’t manage to issue a peep about this disinformation.

If you played Hardball Tuesday night, you were told that Social Security is “going to go bankrupt and run out of money.” You heard “it’s not going to be there for our children.” You heard that “everybody knows that.”

And you saw your repurposed “liberal” host sit there like a drugged baboon and swallow that disinformation.

Steve Benen didn’t say shit. People! It just isn’t done!

Ashley Carson wasn’t on this particular program. As a result, no one told 1.2 million Hardball viewers that these familiar old claims, and the hustlers who pimp them, are simply full of shit.

Voters have been hearing these talking-points for at least the past three decades. During that time, the professors have thoroughly failed to speak up about this disinformation campaign. The career liberal world has napped in the woods. Go ahead—name the liberal journal which has challenged the blizzard of disinformation which has ruled the discourse. (More about these group failures tomorrow, group failures by very bad people.)

And the “journalists” have totally failed you. Through thirty years of disinformation, their knees have knocked, their armpits have dampened, and they’ve refused to confront this machine. All of them, including the “liberals,” have let this campaign roll on.

The New York Times must be the worst.

Last Wednesday night, at the GOP forum, Candidate Perry did it again. Social Security is a Ponzi scheme, he once again proclaimed. Younger voters know they won’t receive benefits, he rather clearly implied.

These claims drew massive public attention. And, of course, the claims cried out for correction and clarification.

How did the New York Times react? The paper managed to produce one paragraph challenging Perry’s claims—but it only appeared in the late edition! And then, there was the tragicomical effort by the paper’s hopeless web feature, “Room for Debate.”

God help us. Editor Katy Roberts decided to stage a debate about Perry’s metaphor. “How is Social Security different from a Ponzi scheme?” she asked at the end of her introduction. This synopsis sat above her five contributors’ essays:
Is Social Security a Ponzi Scheme?
No fraud is involved, but the system uses money from new investors to pay earlier investors. How is it different from a Ponzi scheme?
“How is it different from a Ponzi scheme?” Could the difference lie in the fact that “no fraud is involved?” Rather absurdly, Roberts offered essays from five contributors, none of whom seemed to think that Social Security is a Ponzi scheme. Under the circumstances, it’s hard to know what made her think that she had staged a “debate.”

To their credit, two of Roberts’ contributors went straight to the dumbness of the question. They started their essays like this:
Paul Pierson: The fundamental difference between a Ponzi scheme and Social Security is that a Ponzi scheme is…“a horrendous lie,” while Social Security is not.

Teresa Ghilarducci:
A Ponzi scheme is a short-term criminal enterprise. Social Security is a rock-solid social insurance program.
A Ponzi scheme is a crime; Social Security isn’t. That said, the most insightful statement, by far, came from Ramesh Ponnuru of the National Review. We should be having a smarter discussion, Ponnuru correctly said:
PONNURU (9/9/11): Social Security, unlike a Ponzi scheme, can be reformed so that it becomes a sustainable program. How to do that is probably what we should be talking about, instead of the validity and limits of an analogy.
Duh. It’s very dumb to waste our time debating the pros and cons of the metaphor. It would make a million times more sense to inform the public about the basic facts involved in this matter—and to catalog the various ways the public has been disinformed. But the New York Times made no attempt to do that in its news reporting—except for that lonely paragraph, which only appeared in the late edition. The news division did virtually nothing—and Roberts then staged a weird “debate” which mainly served to keep the Ponzi “analogy” in the air.

A Ponzi scheme is a crime; Social Security isn’t! Until Perry can offer support for his metaphor, there’s little reason to say much more about it than that. But after decades of disinformation—disinformation which continues this week—voters do need to be told two things:

Social Security will never run out of money.

Even if no changes are made, Social Security will pay 80 percent of promised benefits all through the rest of the century. Benefits will continue.

This country is full of voters who don’t understand those basic facts. They’ve heard disinformation all their lives—disinformation from people like Perry, Pataki, Matthews.

The American voter stands disinformed. That’s true of liberals and conservatives. Our biggest “newspapers” run and hide, just as they have always done.

We liberals call the other tribe names, thus helping the plutocrats win.

Tomorrow: Where have the liberal journals been? Where were all the professors?

What conservatives heard from O’Reilly: Here’s what conservatives heard from Mr. O on Tuesday evening’s Factor:
O’REILLY (9/13/11): Ganging up on Rick Perry. That is the subject of this evening's Talking Points memo.

With the Texas Governor leading in the polls his Republican competitors really let him have it at last night's debate…We won't know until later this week if Governor Perry's poll numbers will be affected by the onslaught. So let's a no-spin look at the charges against Mr. Perry.

On the issue of Social Security he's essentially correct. The federal government has taken funds earmarked for that program and spent them on other things. They've been doing it for decades. The problem for Perry is the program is still salvageable, although adjustments will have to be made. So it's not exactly a Ponzi scheme, but it's close.
“The federal government has taken funds earmarked for that program and spent them on other things.” Thirty years into this campaign, do you know the “liberal” response to that familiar refrain?

The answer to that is no, you don’t—because the liberal world has been too lazy and inept to form a response to that (misleading) point. Your “career liberal intellectual leaders” are worthless, lazy, indolent bastards—them and their pool boys too.

Tomorrow, we’ll start with that statement by Mr. O. On Monday night, Mr. O offered this: “I wouldn't have called it a Ponzi scheme. I would have said three-card Monte.”

Non-New Yorkers, just click here.


  1. I have been Googling around, looking for one go-to source for liberal talking points in defense of Social Security, but I haven't gotten very far. So I'm eagerly following this newest series of yours on the subject. Can you recommend a book or website that might supplement your argument, or does one not exist?

  2. One distressing aspect of the Room for Debate synopsis you pulled is the initial mischaracterization of Social Security as an investment. Were Social Security an investment, then those who didn't receive what they paid in would be right to complain. However, when properly understood as insurance (against living too long, making too little or becoming diabled), it's not unjust that not everyone receives every last penny they paid in. (Though most actually do.)


    Angry Bear has a good series on Social Security by Bruce Webb.

    Dean Baker at the CEPR is also reliable in discussing Social Security.

    Here's hoping those links work.

  3. Dean Baker, Paul Krugman and Jim Hightower have certainly been combating the lies and disinformation about Social Security. Baker and Hightower have been especially good about pushing back against the lies on a fairly regular basis. In 2005, when Bush tried to privatize SS, Krugman knocked down all of Bush's lies with truth and facts.
    Alan Greenspan, of all people, has said (in 2007 on Meet The Press) that SS is not in crisis and that any number of minor fixes or tweaks could keep it going for generations. SS never really goes broke because there will always be FICA taxes coming in so that it could pay 75% to 80% of benefits. Even if nothing is done, SS can pay full benefits through 2037. The SS trust fund has $2.5 trillion in assets that are earning interest every day. Just raise or eliminate the cap on the wage taxes and there will be no problem for generations to come. There is no SS crisis, it's not broke and even after 2037 it can still pay about 78% of benefits. In 1978, George Bush told the Texas Observer that SS would go broke, go bust in 10 years. Bush lied then, he lied in 2005 and Perry is a lying piece of canine fecal matter. I don't know what to make of Obama, he's not a real strong defender of SS.

  4. For great information and actual facts about SS go to this web site, The National Committee To Preserve Social Security and Medicare:

  5. AAAARRRGGGHHH! The world is full of idiots!
    None of the so-called fact checkers or even the liberal blogosphere has effectively made the point that the real difference between Social Security and a Ponzi scheme is that the Ponzi schemer is perpetrating a fraud in order to steal most of the investors' money (see Bernie Madoff) while Social Security pays out almost all of the money it takes in. (I believe the current administrative overhead is 0.9%.)
    To understand how deceitful this argument is, consider that virtually all health insurance programs are pay-as-you-go programs using payments from members with low health care needs to pay big dividends to members with serious illnesses, but no one calls them Ponzi schemes.
    The current demographic issues with Social Security can easily be fixed by removing the cap on Social Security taxes and assessing the Social Security tax on all income - including capital gains.
    Oh, wait! The people most affected by these changes are the people paying the think tanks and politicians who are calling Social Security a Ponzi scheme. So, I guess that's not going to happen.

  6. Social Security will continue to pay benefits through the end of the century IF the reduction in the payroll tax rate expires as planned.

    And IF voters do not elect some moron who does away with it.

  7. The "money has already been spent" groaner is one of the most necessary to refute. The Wall Street smarties (some of them at least) have made a killing on t-bills in the last couple of years, but somehow when SS buys a government debt instrument it is the equivalent of flushing the money down the shi**er.

    Even if we had private accounts, where would people want to put a good portion of their savings? Duh, deep, liquid, safe government debt markets, especially in uncertain times.

  8. Thank you, Anonymous, for directing me to the site of the National Committee to Preserve Social Security and Medicare. There, I found a little 10-page booklet, "The Truth about Social Security," that lists seven common false claims against SS and seven simple rebuttals. I do wish it included a little more detail (sources, for instance), but basically, this is just the sort of thing I was looking for.

    Thank you too to Some Guy; I'll explore the sites you suggested as well. I knew the Howler readers would come through for me!

  9. Prostitution is a crime in most places. In Nevada, having sex for money in a brothel is not a crime. Does that mean that having sex for money in a brothel in Nevada is not prostitution?

    Would it be outrageous to call the death penalty "murder", since "murder" is a CRIME and the death penalty is administered by the government?