Economist Echoes Perry's Ponzi Scheme Claim

University of Maryland Business Professor Peter Morici says Texas Governor Rick Perry was right when he referred to Social Security as a “ponzi scheme” in his book, “Fed Up!”

In his book, Perry, a leading candidate for the 2012 Republican presidential nomination, described the national benefit program for seniors as being a “Ponzi scheme,” adding that it was created “at the expense of respect for the Constitution and limited government.”

Since he entered the GOP race last month, Perry has received a large amount of blowback from both Democrats and fellow Republicans who have argued that his remarks should make him a dangerous choice for voters who support the popular entitlement.

In a column today, Morici wrote that “Social Security, by the findings of Mr. Obama’s own Social Security Administration, is insolvent and hence a Ponzi Scheme.”

“Governor Perry is right to call Social Security for what it is,” he added.

However, Morici disagreed with the belief of Perry and many Republicans in Congress that the program should be phased out for future generations and replaced with a private system.

“The U.S. stock market,” he notes, “has not returned a dime to investors for more than a decade, and interest on bonds and savings accounts are too low to make the system work.”

The real solution, according to Morici is to gradually raise the retirement age to 70, with exceptions for those who are disabled.

“Americans won’t like that but it beats what President Obama is offering.”