To the editor:
Myths about social security are like monsters in B movies that keep returning no matter how many times they’re killed — like the myth that Social Security is a Ponzi scheme.
While there was a Charles Ponzi, and there is a scheme named after him, that’s where any accuracy ends. That took about two minutes online to discover.
Social Security was created to help everyone; Ponzi’s scheme was devised to enrich himself. Social Security was created by a man so respected, he was elected president four times. Ponzi was an ex-con who had previously served time for forgery and smuggling.
Ponzi claimed to be buying and selling international reply coupons, which never existed in sufficient quantity to generate the profits he promised investors. In other words his scheme was a fraud from beginning to end. Which is why it took barely a year from start to finish for his scheme to unravel and Ponzi was sitting in prison.
Social Security, on the other hand, has been around for 77 years, and has never missed a payment. In fact, the program currently has sufficient funds to pay full benefits through 2036.
Another myth is that the Social Security Trust Fund contains nothing but IOU’s. This is misleading, since those IOU’s are in reality interest-bearing government securities, similar to what we once called savings bonds. There has never been a huge vault of cash labeled Social Security funds. The money each of us contributes to the program is used to buy more interest-bearing government securities — as it always has. The same securities purchased by governments, banks and individuals all over the world as quickly and as often as they’re offered. Because the U.S. government has never once failed to honor its financial commitments. Never.
Does this mean there are no problems facing Social Security today? Hardly. The program will always require occasional adjustments to ensure long-term stability, just as President Reagan did in 1983. But if we really want serious discussions about keeping this most successful program going strong, we’ll need to deal with facts, not myths.