UPDATED: Ted Cruz says he's not called Social Security a Ponzi scheme. Really?

U.S. Sen. Ted Cruz, R-Texas, insisted in a nationally cablecast debate that he’s not called Social Security a Ponzi scheme.

At the least, in contrast, he previously passed up a chance to repudiate the characterization.

Such a scheme refers to an enterprise that generates returns for older investors by acquiring new investors. Eventually there isn't enough money to go around, and the scheme unravels.

We’ve concluded a few times that the Social Security program, which transfers current tax payments to beneficiaries, is not a criminal Ponzi scheme, contrary to what some Republicans say.

Despite a superficial similarity, Social Security is obligated to pay benefits, a commitment the shysters who run Ponzi schemes do not share. What’s more, participants are aware of how the system is operating. It’s all public. In a Ponzi, investors have no clue where their money is going and are told lies by the promoters.

Here’s how Cruz made his declaration about not having called Social Security a Ponzi scheme:

Vermont Sen. Bernie Sanders, in a CNN debate on tax policy with Cruz on Wednesday evening, said: "Sen. Cruz, I think you were quoted as saying Social Security is a Ponzi scheme."

"I’ve never said that," Cruz replied. "That’s false."

Sanders initially replied that if Cruz says he didn’t make the Ponzi scheme reference, he accepts that. Later at the event, though, Sanders said: "Go to my Twitter page, and you will hear Ted Cruz say Social Security is a Ponzi scheme."

So, what gives?

It looks to us like Cruz was comfortable with describing Social Security as a Ponzi scheme in a September 2011 public interview with Evan Smith, ceo of the Texas Tribune.

Cruz, then bidding for the U.S. Senate seat that would be vacated by Kay Bailey Hutchison, was asked if he considers Social Security a Ponzi scheme.

Cruz replied: "There is a level at which words have meaning. What does the word ‘Ponzi scheme’ mean? A Ponzi scheme is a system--if you and I cooked up a Ponzi scheme, we would have current people pay into it, we would take the money and we would pay it out to other recipients. That’s the definition of a Ponzi scheme. In the English language, that is exactly how Social Security operates."

SMITH: "So I am going to take that as a yes, that you believe that Social Security is a Ponzi scheme."

CRUZ: "I think there is an effort to treat that as rhetoric. But there’s no doubt that’s what it is."

Cruz also called Social Security a "vital bulwark for our society" and "a commitment we’ve made." He also said he favors saving the program. 

See the full Smith-Cruz exchange in the video here.

In Cruz's office, spokesman Phil Novack responded to a request for comment today by sharing a transcript of the 2011 Smith-Cruz exchange about Social Security. Novack said by email: "You will note looking at the full transcript," Cruz "never explicitly called Social Security a 'Ponzi Scheme’ and he also vigorously defended the importance of the program and of keeping the promises we’ve made to our seniors."

While running for president, Cruz  indicated that he favored shoring up Social Security by raising the retirement age and capping increases in the cost-of-living adjustment. He also advocated allowing workers to save up to $25,000 per year in Universal Savings Accounts (USA).