Does Representative Noem Stand with Paul Ryan, Consider Social Security a “Ponzi Scheme”?

Does Representative Noem Stand with Paul Ryan, Consider Social Security a “Ponzi Scheme”?

Does Representative Kristi Noem (SD-AL) stand with her Republican Budget Committee Chairman Paul Ryan who yesterday backed Rick Perry’s controversial belief that Social Security is a Ponzi scheme? Chairman Paul Ryan was asked about Republican Presidential candidate Rick Perry’s claim that Social Security is a Ponzi Scheme and told a conservative radio show “that is how those schemes work.”

Representative Kristi Noem voted for Chairman Paul Ryan’s plan to end Medicare and House Republican leaders continue to push a new plan to end Social Security as we know it.

“Will Representative Kristi Noem take a stand against Paul Ryan and Rick Perry’s radical belief that Social Security works like a Ponzi scheme and end the war Ryan and House Republicans have declared on seniors?” said Jennifer Crider of the Democratic Congressional Campaign Committee. “A Ponzi scheme is Bernie Madoff ripping off Americans – not Social Security benefits that seniors in Noem’s district worked hard to earn and now depend on during retirement. Will Representative Noem stand with South Dakota’s seniors or line up with Paul Ryan and the extreme idea that Social Security is a Ponzi scheme?”

Background

Paul Ryan Called Social Security a Ponzi Scheme. On September 20, 2011, Paul Ryan equated Social Security to a Ponzi scheme. When asked by conservative radio host Laura Ingraham if he agreed with Governor Rick Perry, who earlier compared Social Security to the type of investment fraud, Ryan claimed that he did. “So if you take a look at the technicality of Ponzi—I would—it’s not a criminal enterprise, but it is a pay-as-you-go system where—you know—earlier investors, or say taxpayers, get a positive rate of return and the most recent investors, or taxpayers, get a negative rate of return,” said Ryan. “Your kids and my kids, Laura, they’re the same age are going to get about a negative one percent on their payroll taxes if Social Security and even pay them their benefit, which it can’t. And so, it is obviously, that is how those schemes work.” [Laura Ingraham, 9/20/11]

Securities and Exchange Commission Defined a Ponzi Scheme as a Type of Investment Fraud. According to the Securities and Exchange Commission, “A Ponzi scheme is an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors. Ponzi scheme organizers often solicit new investors by promising to invest funds in opportunities claimed to generate high returns with little or no risk. In many Ponzi schemes, the fraudsters focus on attracting new money to make promised payments to earlier-stage investors and to use for personal expenses, instead of engaging in any legitimate investment activity.” [Securities and Exchange Commission, accessed 9/20/11]

House Republicans Propose Social Security Opt-Out. “House Republicans [in June] introduced legislation that would allow workers to partially opt out of Social Security immediately, and fully opt out after 15 years.” The measure was introduced by NRCC Chairman Pete Sessions (TX-32) and Republican Conference Chairman Jeb Hensarling (TX-05) among others. [The Hill, 6/6/11]

Noem Voted for the 2012 Republican Budget Proposal that would “essentially end Medicare.” Representative Kristi Noem voted to end Medicare by supporting the Republican budget. The Wall Street Journal reports “The plan would essentially end Medicare, which now pays most of the health-care bills for 48 million elderly and disabled Americans, as a program that directly pays those bills.” [H Con. Res. 34, Vote #277, 4/15/11; Wall Street Journal, 4/4/11]

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