KHOW Morning Host: Coffman Is "Right" To Call Social Security A "Ponzi Scheme"

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by: Jason Salzman

(Promoted by Colorado Pols)

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.

Kaminsky wrote:

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.

12 thoughts on “KHOW Morning Host: Coffman Is “Right” To Call Social Security A “Ponzi Scheme””

Craven says:

August 9, 2018 at 10:37 am

Well, at least he acknowledges that libertarian solutions don't work in the real world.

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Pseudonymous says:

August 9, 2018 at 10:55 am

Idiots gonna idiot. Liars gonna lie.

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Zappatero says:

August 9, 2018 at 11:47 am

Are Democrats defending it, cuz I'm not so sure:

[W]e now live in a very liberal country. Most Americans may not label themselves as liberal, but if you look at almost every major issue, the majority of Americans support the liberal position.

They want Medicare for All.

They believe in women’s equality and equal pay.

They believe immigration is good for America.

They believe in LGBQT rights and marriage equality.

They want gun control. They want to break up the big banks. They want universal pre-K and free public college for all.

They want to tax the rich and corporations.

And on and on and on. It’s amazing how liberal the American people are when you look at it issue by issue.

Too bad Democrats in CO are afraid to be progressive, afraid to be called "liberal", afraid to push for a true blue Colorado.

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1. JohnInDenver says:
  
  August 9, 2018 at 7:21 pm
  
  Zappatero …
  
  1. don't I recall you being one among many saying that polls aren't a sure thing?
  
  2. A majority in an issues poll is probably true. The challenge is, when it comes time to vote, either directly on such an issue OR on politicians who pledge allegiance to those issues, there haven't been many successes here in Colorado or broadly across the nation. So what's your explanation? A dearth of capable candidates able to appeal to the popular positions? Politicians so ignorant or fearful of what the people say they want that they abandon their pursuit of the issue? Voters who get confused by nice smiles and ambiguous promises? The rich having power enough to brainwash or confuse the electorate? The rich being able to buy the politicians after they get in office? All of the above?
  
  3. Assuming the politicians would do all those things "the people" want, what would the spending level be? What levels of taxation and deficits are going to be needed? And did any of the questions polled add in likely levels of taxes or deficit as part of the question?
  
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MichaelBowman says:

August 9, 2018 at 1:06 pm

To be fair, there are real, live Ponzi schemes; SSI isn't one of them.

The Congressman should recognize one when he sees it. After all, he did vote for the 'mothers of all' Ponzis not that long ago.

Any (rich) MAGAt knows the gig all too well.

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ElliotFladen says:

August 10, 2018 at 5:39 am

Ross nails it

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1. Pseudonymous says:
  
  August 10, 2018 at 8:55 am
  
  Explain one way in which Social Security is a Ponzi scheme. You’re opposed to it philosophically, that I’m sure of, but how is it a Ponzi scheme?
  
  I’m happy to start. This is a lie:
  
  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”
  
  The system is designed to use taxes on current workers’ income to pay past workers’ income, certainly. Last year, the Old-Age and Survivors Insurance Trust Fund and the Disability Insurance Trust Fund combined took in $996.6 billion and paid out $952.5 billion, with about $2.9 trillion left in the funds. Those funds are primarily invested in US treasuries, backed by the full faith and credit of the government, and viewed as the safest investment by corporations and governments worldwide.
  
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2. Voyageur says:
  
  August 10, 2018 at 8:56 am
  
  Ross did indeed nail it, if by that you mean he nailed his dick to the floor. God created Social Security as a convenient screen to assure that the stupidest and most vicious among us were forever kept away from influential public office. It works wonderfully.
  
  And in case you don 't know, an "objectivist" is a fascist who really, really, likes to smoke cigarettes.
  
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mamajama55 says:

August 10, 2018 at 6:58 am

Kaminsky, whatever fine-sounding label he chooses to wear, is apparently nostalgic for the "good old days" when we let poor old people and disabled seniors die sick and alone, or in the poorhouse.

In 1934, fully half of the elderly poor lacked income to be self-supporting, according to SSA's "Historical Background and Development of Social Security."

FDR nailed it. Kaminsky will retire wealthy, so let all the sick, old and poor die and get out of the way.

Mike Coffman apparently believes the same. ….and needs to be held accountable for it.

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MichaelBowman says:

August 10, 2018 at 10:22 am

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.

There are ways to improve that rate of return and maintain safety nets: lower the effective rate by raising (or eliminating) the SSI caps. Currently capped at $127,200, a lower-middle income American pays the same amount into the system annually as Bill Gates. By lowering the rate, every working class American gets a boost in income (a far better method than Nutter counting his gold coins from the tax break) and the economy gets an immediate boost, as those dollars are generally spent in short order.

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1. Voyageur says:
  
  August 10, 2018 at 11:25 am
  
  Social Security is progressive in that it replac es much more of a poor person's income than a rich persons'. While I don't question your math, Mike, FDR was opposed t o making OASDI a true welfare program because he kne w that would weaken political support for the system
  
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  1. MichaelBowman says:
    
    August 10, 2018 at 12:11 pm
    
    Agreed. That post was more argument for argument’s sake. If Kiminsky’s hill is ‘lousy rates of return’ that problem is fixable. Of course we know he has no interest in SSI being solvent, or in existence in his ideal world, akin to the mythical town founded by John Andrews, Backbone, CO.
    
    In a sane society the 1% would embrace the fact that safety nets are in everyone’s best interest. But I repeat myself. These discussions (on eliminating SSI) are personal to me, with far too many friends that rely on that check. Maybe Space Farce is a good idea and we’ll discover another planet for these idealists to inhabit and leave the adults behind to rebuild a just society here, if there’s anything left after four years of trickle down on steroids.
    
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