Last week, House Budget Committee Chairman Paul Ryan (R-WI) told conservative radio host Laura Ingraham that he largely agreed with Texas Gov. Rick Perry’s (R) characterization of Social Security as a “Ponzi scheme,” saying that Ponzi schemes and Social Security “work” the same way:
“It’s not a criminal enterprise, but it’s 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,” he said. “That is how those schemes work.”
But in an interview with Bloomberg’s Al Hunt that aired over the weekend, Ryan was asked the same question, and this time, he refused to agree with Perry’s assertion that Social Security is a Ponzi scheme, instead calling Social Security a “critical program” that is merely “going bankrupt”:
HUNT: Final question. Rick Perry says Social Security is a Ponzi scheme. Mitt Romney says that’s inflammatory language that makes him unelectable to be president. Who’s right?
RYAN: Well, I don’t know if – who’s unelectable or not. It’s not the word I would choose to describe it. Ponzi was a criminal enterprise. Obviously, that’s not the case with Social Security. But there are problems with it, with Social Security, that we all acknowledge. It’s going broke. If we do nothing, an across-the-board benefit cut hits current seniors, a critical program that millions of people rely on, and the next generation will get a bankrupt program, and so let’s save it.
As the Center on Budget and Policy Priorities’ Jared Bernstein explained, Social Security is absolutely not a Ponzi scheme. “Social Security is pay-as-you-go. Ponzi’s scheme was not as it depended on continuous doubling the ratio of contributors to investors,” he wrote.
Ryan’s refusal to double-down on his comments may be due to the fact that the GOP is starting to get a little nervous about its leading figures constantly deriding Social Security. As Politico noted today, “Florida Republicans want the GOP presidential field to tread lightly on the subjects of Social Security and Medicare. Very, very lightly.” Fifty-eight percent of Floridians say it is “unfair” to call Social Security a Ponzi scheme.