Texas Gov. Rick Perry, a Republican presidential candidate, stuck to his claim that Social Security in its current form is a so-called Ponzi scheme during last night’s presidential debate. The media are getting a lot of mileage out of sound bite. But it has spurred the debate as to whether or not it is a Ponzi scheme.
On Thursday’s “Squawk Box” on CNBC, CME group floor reporter Rick Santelli, known to some as the father of the tea party movement, challenged one critic of Rick Perry, New York Times columnist Thomas Friedman on the Ponzi scheme claim.
“I’d just like to know – you know, I was watching that debate last night, although it really wasn’t a debate,” Santelli said. “It was like a weird press conference. But I would like to know – does Mr. Friedman think Social Security is a Ponzi scheme?”
That led to a heated back-and-forth between Friedman and Santelli over the definition of a Ponzi scheme and as to whether or not it was a valid question.
Transcript as follows:
FRIEDMAN: No, I don’t think it’s a Ponzi scheme.
SANTELLI: Earlier in the show you said that we’re putting the burden on our kids that’s unsustainable. What’s the definition of a Ponzi scheme?
FRIEDMAN: It’s a program that made promises that it cannot keep in full and it needs to be fixed and reformed.
SANTELLI: Isn’t that exactly what a Ponzi pyramid is?
FRIEDMAN: I don’t think it is a Ponzi scheme as a criminal endeavor.
SANTELLI: No, no – forget the criminal side. You need more people to perpetuate a myth because if the people stop the myth is known to all. That’s my definition of a Ponzi scheme. Let’s call at it chain letter, a pyramid scheme. Isn’t that by definition what Social Security is? Take the legalities and fraud out.
STEVE LIESMAN: Why is it a Ponzi scheme, Rick?
FRIEDMAN: It is pay as we go. Ronald Reagan fixed it. Why can’t we fix it?
SANTELLI: What does Ronald Reagan have to do with my question?
FRIEDMAN: What does your question have to do with reality?
MICHELLE CARUSO CABRERA: We brought it up.
SANTELLI: You can’t decide that more people is the only thing made Social Security work. We have a real issue because many people in government seem to like to read your work.
FRIEDMAN: What makes Social Security work is fixing Social Security in terms of the population demands.
SANTELLI: I didn’t ask if we should fix it or not. I asked if it’s a pyramid scheme.
FRIEDMAN: Your question is idiotic. That’s what you asked.
SANTELLI: You’re idiotic. I’m done. I feel good.
FRIEDMAN: So do I.
Read more: http://dailycaller.com/2011/09/08/rick-santelli-to-tom-friedman-youre-idiotic/#ixzz1XN8qsdKi
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