In a post Tuesday, the Colorado Times Recorder reported, among other things, that KHOW 630-AM’s morning host Ross Kaminsky said Social Security is “clearly” a “Ponzi scheme,” like U.S. Rep. Mike Coffman (R-CO) said a few years back.
In response, Kaminsky submitted the following opinion piece, posted in its entirety below.
Regarding your article on my conversation about Social Security as a Ponzi scheme…
I’m sure you know this because I made it clear on the air, but just in case:
THEY CALLED ME and asked to be on the show to “explain to (my) listeners why Social Security is not a Ponzi scheme.” I told them that I think it is in almost all important aspects similar to a Ponzi scheme, and I’d be happy to have the debate but they need to be prepared for a host who will challenge almost every assertion they make. I think I won the debate easily, because the facts are so clearly on my side. But that’s not my main point with this note.
One thing that I thought was slightly off, at least in tone, was when you say I “dredged up an old conversation.” I was accommodating the wishes of a group that I disagree with to address my audience. I enjoy real debates on real issues, as you know. It’s not very important but to the extent that you make it sound like I went back to some old conservative talking point(s), you make it sound like I do predictable conservative radio. I think I do neither, and it was the liberal guest who “dredged up” the topic, not I.
Secondly, PLEASE STOP calling me conservative. I am NOT conservative. My listeners know I’m not conservative. And you’ve known it for years. I’m libertarian or, if you prefer a little more specificity, Objectivist (though most people wouldn’t know what that means, so I’m fine with libertarian with a lower-case ‘l’), in my thinking. If you’re going to put adjectives in front of my name, I expect you to be accurate. How would you like it if I started talking about you on the air as Communist Jason Salzman? Or even Socialist Jason Salzman? (Maybe you are socialist…I don’t actually know…but I’m pretty sure you’re not communist.) Or, how about this one: Conservative Jason Salzman? Yeah, that’s what I thought.
I’ve always been responsive to your requests for comment from me, and the least I expect from you in return is to characterize me and my show accurately.
Finally, on the merits of the issue, yes I’m against Social Security as it’s currently structured and in a libertarian ideal world this would not be a government function. But we live in the real world and what I was pointing out primarily yesterday is that people think that Social Security represents 1) actual savings by the government on workers’ behalf, 2) something very much like either insurance or a pension in terms of how those things function and are structured in the private sector, and 3) a contract with the government. None of those things is true.
So you and I will disagree about whether Social Security is a legitimate function of government, but to the extent that the system pays former contributors out of current workers’ wages because there are not any actual assets underlying the “trust fund”, and secondarily that there is no enforceable contract between a worker and the government, it is mendacious to claim it does not have significant characteristics of a Ponzi scheme. It’s just one that has been blessed by Democrats when they had the power to do it and which subsequent Republicans didn’t have the courage to undo or fix because, really, they got in on the fun of raiding nearly $3 trillion of taxpayer money.
As a listener quipped, if Charles Ponzi began operating now, he’d be charged with running a “Social Security scheme.”
You should be honest enough to just say that you’re fine with the government running such a scheme, as I am honest enough to say that in my ideal world the program wouldn’t exist…and Americans would not have been trained out of being responsible for their own retirements.
Finally, you didn’t address an issue I raised which should trouble conservatives liberals like you: because it’s the biggest tax that many/most low-wage workers pay, because it’s not inheritable by one’s children, and because lower incomes correlate substantially with lower life expectancies, Social Security goes a long way to keeping poor people (and poor families) poor. Of course also having a horrendous “rate of return” also keeps them poor because richer people can put some money into real investments with better returns. Liberals should be ashamed of their refusal to consider personal accounts as part of
the Social Security mix. But clearly the fear is that when those are available for a person’s first investable dollars (which are now taken as payroll tax), nobody will want the government program. Which should tell you all you need to know about it. It is a scheme that only still exists because government compels participation.
Coffman is right. I’m right. It’s not a close call.