A Ponzi scheme is a pretty simple animal: You pay old investors using money put in by new investors. When you run out of new investors, nobody gets paid.
Social security is also a simple animal: We pay old taxpayers money put in by new taxpayers. Because there are more old taxpayers than there are new taxpayers, and because these old taxpayers no longer contribute much, if anything, to the pot, pretty soon nobody gets paid.
Ponzi schemes cannot be reformed. They are inherently flawed. Their painful death is inevitable, since it is programmed into their composition. We know with certainty that the sun rises in the east and sets in the west. It always has and it always will. We also know with certainty that Ponzi schemes inevitably run out of money.
Perry used his prominence to state something that all honest people know to be true: Social Security is inherently unsustainable. It’s not a fraud, but it’s destined to failure. As demographics change, and as we suffer through the repercussions of the Stimulus, that failure will occur sooner, rather than later. No amount of tweaking will prevent that from happening. The only way to “fix” Social Security is to do away with it: give some lump sum payment to those who already depend on it, give phased out payments to this who are uncomfortably close to depending on it, and tell everyone else “We’re sorry we screwed you.”
As far as I’m concerned, Perry gets big kudos for having the honesty to take his high-profile and use it to announce that the Emperor has no clothes.