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Ponzi scheme? Tax the rich? A Social Security firestorm

Sep 14, 2011 8:14:00 PM - thestate.com
Social Security suddenly has become a white-hot political issue, as the Republican presidential frontrunner blasts the system as a “Ponzi scheme” and liberal Democrats in Congress scramble to find ways to keep the program financed for generations to come.

Warnings about the 76-year-old system’s financial future are hardly new. Its trustees, in their annual report earlier this year, warned that it would be insolvent by 2036. In 2010, for the first time since 1983, the program ran a deficit, excluding interest income, and is expected to do so again this year.

And, the trustees warned, “After 2014, cash deficits are expected to grow rapidly as the number of beneficiaries continues to grow at a substantially faster rate than the number of covered workers.”

Social Security is emerging as a major political topic now for three reasons.

In the past year, two major bipartisan commissions, as well as the nonpartisan Congressional Budget Office, have issued detailed warnings about Social Security’s uncertain long-term future in the context of having to tame America’s growing debt.

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