Why Social Security is Not a Ponzi Scheme

This Socratic dialogue provided by Brad DeLong, explains why Social Security is a pay as you go system and how that is different from a fraudulent Ponzi scheme. It was necessary for DeLong to provide this distinction because Rick Perry, who is running for president said that it is a Ponzi scheme, and because conservative economists like Greg Mankiw from Harvard and Tyler Cowen lend credibility to Perry's statement without really calling it a Ponzi scheme. They do this of course, because economists have to choose sides on real economic policy issues, but they do not want to lose all of their credibility. Mankiw and Cowen know better, but they are on the GOP team and they are good team players that must defend the alternative universe in which their party resides.