Wisconsin Rep. Paul Ryan said Tuesday that Texas governor and Republican presidential candidate Rick Perry is right to refer to Social Security as a Ponzi scheme.
Social Security fits the technical definition of a Ponzi scheme, Mr. Ryan, a Wisconsin Republican, told conservative Laura Ingraham on her radio show.
“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,” Mr. Ryan said.
Mr. Ryan, who chairs the House Budget Committee, is the latest Republican to back Mr. Perry’s claim that Social Security is a Ponzi scheme. Speaking earlier this month, Wisconsin U.S. Senator Ron Johnson came to Mr. Perry’s defense, backing the Texas governor’s characterization of Social Security as a Ponzi scheme.
“Certainly, my approach was not to go out of my way to say things that scare people,” Mr. Johnson said in an interview with the National Review Online. “When you just calmly and coolly lay out the facts and the figures, people kind of come to the conclusion that, yeah, I understand why he’s calling it a Ponzi scheme.”
Mr. Ryan, who has yet to endorse a candidate in the Republican presidential primary race, downplayed criticism put forth by former Massachusetts governor Mitt Romney, who challenged Mr. Perry’s assertions, saying both candidates were correct in their questioning of the popular government program.
“They’re both right,” Mr. Ryan said of Mr. Perry and Mr. Romney. “[Social Security] is not working, it is going bankrupt, and current seniors will be jeopardized the most by the status quo.”
