The first person I’ve found drawing the parallel is economist Paul A. Samuelson. In the November 13, 1967 Newsweek Samuelson defended Social Security by pointing out that it was linked to population growth and that “A growing nation is the greatest Ponzi scheme ever devised. And that is a fact, not a paradox.” (I found this quote in Phillip Longman’s excellent essay “Missing Children,” in the latest issue of the journal The Family in America. I can’t find the original Newsweek cite to provide full context, but Longman says that Samuelson was defending Social Security and I’m happy to trust him because Phillip Longman is stone-cold awesome.)This view is really not that surprising. Laurence Kotlikoff writes in Jimmy Stewart Is Dead: Ending the World's Ongoing Financial Plague with Limited Purpose Banking:
For its part, economics places no moral stigma on the words: "Ponzi scheme." Indeed, there is a significant economics literature concerned with the question of whether Ponzi schemes--chain letters--are preferred investments for everyone. (p. 61)Kotlikoff goes on to say that if population or productivity is growing faster than the rate of interest, social Ponzi schemes work well. However, when population growth and productivity slow or come to halt, the programs will run into trouble.
(Kotlifkoff's proposal for reforming the financial sector is to abolish limited liability for any financial institution that uses leverage.)
update: A fuller version of the Samuelson quote is here.
Update 2: More on people recognizing that Social Security is structured in the same way a Ponzi scheme is.