Governor and presidential hopeful Rick “Ponzi” Perry begins his column about Social Security this morning in USA Today by saying it is important to be honest. Uh oh.

You know what it generally means when a politician clears his throat and says, “Let’s be honest.” It’s often a prelude to doing just the opposite. But—oh, dear–this time it’s worse. Perry really IS honest and many Republicans are stunned. Some disagree with his theses about Social Security, while others belong to the you-just-can’t- say-that school of thought.

The Wall Street Journal has an oped that is critical of Perry and puts forward ideas of how to save Social Security (we’ll get to that). But first, what is Perry saying? You should read the whole piece, but here is the gist:

As I said at the Reagan Library recently, Social Security benefits for current recipients and those nearing retirement must be protected. For younger workers, we must consider reforms to make Social Security financially viable….

These are the hard facts: Social Security’s unfunded liability is calculated in the trillions of dollars. Last year, annual Social Security outlays exceeded annual revenues for the first time since 1983. The Congressional Budget Office projects that outlays will be roughly 5% greater than revenues over the next five years, worsening as more and more Baby Boomers retire.

By 2037, retirees will only get roughly 76 cents back for every dollar that is put into Social Security unless reforms are implemented. Imagine how long a traditional retirement or investment plan could survive if it projected investors would lose 24% of their money?

I note that even Honest Rick is going out of his way to avoid the words “Ponzi scheme” that he used at the Reagan debate and also to reassure older citizens who are already dependent on Social Security. But he hasn’t backed off from his position. And here’s the key question: Is Social Security, as Perry charged, a Ponzi scheme?

The Wall Street Journal is critical of both Perry and Mitt Romney (who has put out an ad claiming Perry wants to kill Social Security):

Republicans have been more frustrated than usual with their Presidential candidates, and last Tuesday’s debate exchange on Social Security between Rick Perry and Mitt Romney shows why. One candidate seemed to taunt his critics by showing disdain for anyone who supports the entitlement for seniors, while the other candidate sounded like a Democrat defending it. …

Give Mr. Perry credit for addressing one of the third rails of American politics, but that doesn’t mean he has to invite electrocution. The problem with his hot rhetoric is that it can turn off many voters before they even get a chance to listen to his reform proposals, assuming he eventually offers some.  

The piece admits that Perry is “technically right that Social Security is a species of Ponzi scheme (if not a criminal enterprise) in the sense that young people today are putting more into the system than they can possibly get out in retirement.”

The intriguing news appears to be that can be reformed:

Even a pyramid system such as this could be solvent if it took advantage of compound interest. But the overriding problem is that not a dime of the payroll contributions the government collects over a lifetime is saved and invested for a worker’s retirement. Social Security’s pay-as-you-go financing model means that 12.4% of all wages are transferred to current beneficiaries, the surplus dollars are spent by Congress on other things, and Social Security gets an IOU from the Treasury….

The key point is that, unlike a Ponzi scheme, Social Security can be reformed and it will have to be if current workers are to receive any return on their current taxes. Everyone serious knows what the reform options are-from changing the benefits schedule, to “progressive indexing,” to raising the retirement age. We’d prefer private accounts so that young people could build wealth as a property right and not depend on the promises of politicians, while the money would be put to productive economic use in the meantime. Herman Cain mentioned it in last week’s debate. But if that’s too politically adventurous for the two Governors, maybe they can meet somewhere in between their rhetorical positions.

Yeah, Perry was intemperate, and that ultimately can hurt his chances of becoming president. He may need to meet with the editorial board at the Journal for some good ideas that won’t scare Granny. But he said what he believes about Social Security, and this has generated a very valuable discussion.

Maybe I am not calling Diogenes yet, but it was refreshing.