Friday, September 16, 2011

Krauthammer: "Of course it's a Ponzi schem. Now let's fix it."

I've compared Social Security to a Ponzi scheme in the past, but it wasn't set up as one. That only developed because the population growth fell off. It was sold as a Ponzi scheme would be sold, and the government could keep it afloat as long as it were willing to keep increasing payroll taxes. The problem is that people have been promised retirement benefits that are often beyond the amount of their "investment" plus reasonable earnings. What we should all acknowledge is that SS is and always has been a welfare program for old people, but as life spans go up, it gets to be more and more expensive. There are ways to fix this. Like cutting benefits based on actuarial data. But the best way is for Government to cut spending, and get the economy booming by providing more certainty to investors and businesses.

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