Peter Schiff is a businessman, economist, and the host of the Peter Schiff Show, a podcast focused on politics, economics, and finances.
In this segment from his podcast, Schiff asks two Social Security officials (Charles Blohaus, public trustee for Social Security and Medicare, and Andrew Biggs, former Social Security Administration principal deputy commissioner) a very simple question:
“Do you know what a Ponzi scheme is?”
“I do indeed.”
“Okay, so could you describe to me the difference between Social Security and a Ponzi scheme?”
What follows, after short discussions of intent and some of the more obvious differences between the criminal enterprise and the legal federal program, in both interviews, is even these Social Security experts and advocates…can’t really answer the question.
Interestingly, Biggs readily admits the way Social Security operates currently is functionally not very different from a Ponzi scheme at all–from the initial huge payouts to the shortfalls and funding problems we’re seeing today.
“Lacking Social Security, a good number of people would not save for retirement…”
“But the problem is the government didn’t save any of the money. So, the government said, ‘we need Social Security because Americans won’t save.’ And then the government took the money and spent every nickel of it.”
“You’re totally right. Especially over the past 25 years or so, the Social Security surplus is a subsidized consumption of the rest of the budget, and so we’re no better off today for having done that.”
It seems the public aren’t the only ones around here with a retirement saving problem.