Flashback 2007: Tim Russert and Chris Matthews Agree Social Security Is 'A Bad Ponzi Scheme'

Whether or not Social Security is a Ponzi scheme was again a source of great discussion during Monday's Republican presidential debate, and it appears this is likely going to be a hot issue throughout this election cycle.

What should be interesting to participants and pundits alike is that during the last presidential campaign, on November 5, 2007, the late Tim Russert, and Chris Matthews, while talking about the Democrat candidates on an episode of MSNBC's "Hardball" broadcast exactly one year before America elected its first black president, agreed that Social Security was "a bad Ponzi scheme" (video follows with transcript and commentary):


CHRIS MATTHEWS, HOST: Welcome back to HARDBALL. We’ve been talking about how this race for the White House is going to play out. We’re giving the "Power Rankings," as we’ve just done tonight. We’re going to be giving them later tonight. We’re also one year from this election. So where do things stand right now?

Tim Russert’s NBC News Washington bureau chief, and of course, moderator of "Meet the Press," and very much, of course, moderator of all these debates. Tim, thank you for joining us.

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MATTHEWS: Let’s talk about -- we’ve been talking about -- and we’re going to talk about later tonight -- about this -- about the rankings down the road. But right now, Hillary Clinton coming out of these debates, this debate last week -- are you looking for something in the NBC poll that comes out mid-week? Do you expect something to -- I saw that Obama picked up 6 points in one of the polls, in a poll taken during the course of those days last week when we had the debate.

RUSSERT: Yes, and there’s other polls which indicate it’s still very much a status quo race. Iowa is what it’s all about, and those are the -- that’s the place we want the see the polls.
I think if anything emerged from the debate, it was that John Edwards and Barack Obama and Chris Dodd demonstrated that they’re willing to fight for the nomination by separating themselves on issues from Senator Clinton, who’s the frontrunner then and the frontrunner now. But there are differences of opinion on Iran, on Social Security, on a whole variety of issues. And I think we’re going to see those played out in Iowa, and as goes Iowa, I think may go the Democratic nomination.

MATTHEWS: Are you getting a sense from the Clinton campaign where they’re willing to hold tight and basically tough it out without taking these tough positions? In other words, rather than take the heat for not taking a strong stand on Social Security reform, on what to do in Iran, what to do in Iraq, are they willing to just take the heat and say, Look, we’re not going to give those answers. Our opponents want those answers. We’re going to stay where we are.

RUSSERT: Senator Clinton said she’s comfortable with the answers that she’s given. She did say she could have done better on the immigration questions, for illegal immigrants’ driver’s licenses. But my sense is the next debate they have is only going to be heightened in terms of people scrutinizing, saying, Where do you stand? What do you believe? Not only for Senator Clinton but for all of them.

MATTHEWS: You know what it reminds me of? Remember in biology class in high school, where you had the starfish trying to open up the clam? These guys are trying to keep open up the clam, and she’s going to stay clammed up. She doesn’t have anything (INAUDIBLE) If you think about it, what does she gain if she says, Let’s raise taxes for Social Security, let’s raise the retirement age, let’s raise whatever, let’s reduce the benefits? What they want her to do is show some pain (ph) to the public, and she doesn’t want to do it.

RUSSERT: Well, Senator Obama had said that he had -- would have everything on the table for Social Security, and now he’s limited that, as well. So all of them can be scrutinized. But I think, Chris, the important thing for voters who are watching this, it’s more than just a game of primary versus the general election. They’re waiting for leadership.


RUSSERT: And if you’re going to make tough decisions as a president, you have to answer tough questions. What are you going to do? Show us how you’re going the lead us. Everyone knows Social Security, as it’s constructed, is not going to be in the same place it’s going to be for the next generation, Democrats, Republicans, liberals, conservatives.

MATTHEWS: It’s a bad Ponzi scheme, at this point. Yeah.

So almost four years ago, NBC News's former Washington bureau chief and host of "Meet the Press," along with the current host of "Hardball," ironically in a discussion about Democrat presidential candidates, agreed that Social Security is "a bad Ponzi scheme."

But when a Republican presidential candidate - Texas Governor Rick Perry - said this during a debate roughly four years later, the "Hardball" host and many of his colleagues in the press labeled it as unacceptable anti-American psycho talk.

It sure seems Matthews can't make up his mind about whether making such a comparison is valid or verboten given his numerous flipflops on this issue.

Far more importantly, he and Russert were by no means the first liberal media members to discuss this.

The Weekly Standard's Jonathan Last wrote recently that such remarks were made as far back as November 13, 1967, when the late liberal Nobel Prize-winning economist and Newsweek columnist Paul Samuelson observed (h/t Ed Driscoll):

Social Security is squarely based on what has been called the eighth wonder of the world: compound interest. A growing nation is the greatest Ponzi scheme ever contrived. And that is a fact, not a paradox. 

That was just the beginning of liberal media members making such a claim. The Ethics and Public Policy Center's Stanley Kurtz identified a goodly number since Samuelson in a piece published by the National Review Monday.

One that Kurtz missed was an op-ed printed by the New York Times in 1988 - yes, the New York Times - from the American Enterprise Institute's John H. Mankin entitled "Social Security: Nothing But A Ponzi Scheme." Granted, AEI is indeed a conservative think tank, but this was published by the perilously liberal Times.

So it seems that for at least 43 years, it's been perfectly acceptable for liberal media outlets and members to openly discuss the Ponzi-like nature of Social Security without being ridiculed as unhinged anti-Americans.

Why is that not the case when Republican presidential candidates enter into the same conversation?

Video courtesy NewsBusters managing editor Ken Shepherd.

Social Security 2012 Presidential 2008 Presidential New York Times Newsweek Hardball MSNBC Meet the Press NBC Video Rick Perry Paul Samuelson
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