All the attacks must mean that Rick Perry is right
Rick Perry has become a lightening rod. Isn't it interesting that the media seems intent on vilifying whoever is the current conservative frontrunner on the republican side. When Michele Bachmann won the Iowa caucuses, they went after several comments she had made. Now it is Rick Perry they are after for saying that a further easing of money would be akin to treason and calling social security a ponzi scheme. First off Perry may have done us all a favor by calling attention to the Fed. Studies have shown that monetary policy almost always gets easier during the reelection year of an incumbent president regardless of party. Since this Fed has eased like no other lending out over $1 trillion, Bernanke has been put on notice that we all are now watching. It is possible that he would back off anyway. The Open Market Committee is clearly split with the reserve bank presidents taking a less easing policy stance than the governors. There is also the little problem for Bernanke that he will certainly not be reappointed if Obama loses. Given that those prospects are dim, maybe just maybe he will start being less accommodative anyway. By the way, why is it that all the pundits are saying that a conservative like Perry or Bachmann or even Ron Paul could not beat Obama? It seems to me that we are in a state similar to the previous election. George Bush was so unpopular that any democrat would have won. If Obama's numbers do not get out of the 40's he will lose no matter who runs for the republicans. Now back to Rick Perry calling social security a ponzi scheme. Actually social security has giver Charles Ponzi a bad name. A ponzi scheme only works if new "investors" are lured in so that their money goes to pay the old "investors". Eventually Ponzi schemes fail when there is a shortage of new "investors". With social security which is a pay-as-you-go scheme in which current benefits are pay from current "contributions", if there is a shortfall the government can expropriate more funds. As a result the social security tax keeps getting raised as does the income limit. What has been disappointing is that surely all the republican candidates know this and instead of all of them backing Perry and saying the same thing, some are actually attacking him on it. I don't know about you, but I have no enthusiasm for someone who isn't truthful on this issue. All of them should be saying that it is a ponzi scheme and the practical solution is to raise the "retirement" (full benefit) age to make the program financially sound. Then other solutions such as privatization can be phased in.
Harold A. Black is professor emeritus in the Department of Finance, University of Tennessee, Knoxville having retired after 24 years of service. He has served on the faculties of American University, Howard University, the University of North Carolina - Chapel Hill and the University of Florida. His government service includes the Office of the Comptroller of the Currency and as a Board Member of the National Credit Union Administration. He also has served on the boards of directors Home Savings of America and its parent company, H. F. Ahmanson & Co., Irwindale, California prior to its merger with Washington Mutual Savings Bank, on the board of New Century Financial Corporation, Irvine, California, then the nation’s largest real estate investment trust and as director and later chairman of the Nashville Branch of the Federal Reserve Bank of Atlanta. He writes an occasional article for the Knoxville News-Sentinel at http://www.knoxnews.com/staff/dr-harold-black/. His web page is haroldablackphd.com