Krugman in 1997 called Social Security a Ponzi scheme

Someone—it’s not clear who—has uncovered an article by Paul Krugman in 1997 in which he called Social Security a Ponzi scheme that could not last much longer. The very thing Rick Perry has said for which Paul Krugman has treated him like a disgusting lunatic. Krugman wrote in 1997:

Social Security is structured from the point of view of the recipients as if it were an ordinary retirement plan: what you get out depends on what you put in. So it does not look like a redistributionist scheme. In practice it has turned out to be strongly redistributionist, but only because of its Ponzi game aspect, in which each generation takes more out than it put in. Well, the Ponzi game will soon be over, thanks to changing demographics, so that the typical recipient henceforth will get only about as much as he or she put in (and today’s young may well get less than they put in).

There’s more at the linked page.

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September 16

Bob S. writes:

Worlds collide. The two best blog on the internet — or at least the two that are by far my own greatest personal must-reads — are halfway to discovering each other. The mind reels.

LA replies:

Thank you, but do you want to tell us more about this other site?

Bob S. writes:

If VFR is the blog for serious readers who are skeptical of the prevailing political wisdom, ZeroHedge is the blog for serious readers who are skeptical of the prevailing economic wisdom.

ZH is a group blog with guest posts of varying quality, but overall it shines light into the dark corners of the financial world, and provides pointers to essential non-mainstream economic thought. In more normal times only specialists need be concerned with such details, but when the government and financial industry have screwed up as mightily as they have, anyone with savings to protect is forced to become as much of an expert as they can.

My comment was a little misleading, though. I don’t think there are too many direct links between VFR and ZH’s points of view. There’s not too much potential for cross-pollination of thought. But I’d recommend it to anyone with an interest in financial and economic matters.

Others I’d recommend are globaleconomicanalysis.blogspot.com and market-ticker.org. None are gospel, but any are more worthwhile than conventional outlets like WSJ or Barrons.

Posted by Lawrence Auster at September 15, 2011 05:20 PM | Send