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Flashback: Krugman Says Social Security Has a “Ponzi Game Aspect”

John on September 14, 2011 at 9:22 am

It’s not just Chris Matthews that sees the Ponzi scheme for what it is, it’s also uber-progressive economist Paul Krugman. This was dredged up from the distant shores of 1997 by ZeroHedge (ht: Monty):

Social Security is structured from the point of view of the recipients as if it were an ordinary retirement plan: what you get out depends on what you put in. So it does not look like a redistributionist scheme. In practice it has turned out to be strongly redistributionist, but only because of its Ponzi game aspect, in which each generation takes more out than it put in. Well, the Ponzi game will soon be over, thanks to changing demographics, so that the typical recipient henceforth will get only about as much as he or she put in (and today’s young may well get less than they put in).

That’s about right. It’s Ponzi-esque and unsustainable. Granted that’s not exactly the same as calling it a Ponzi scheme but it’s close enough for government work.

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Category: Energy & Economy |

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