Governor Perry is absolutely right on this. I have heard the "Social Security is a Ponzi scheme" comment a few times, and for some reason that made sense to me, but I wasn't exactly sure, so I looked it up. Here is the basic definition from Wikipedia:
A Ponzi scheme is a fraudulent investment operation that pays returns to separate investors, not from any actual profit earned by the organization, but from their own money or money paid by subsequent investors. The Ponzi scheme usually entices new investors by offering returns other investments cannot guarantee, in the form of short-term returns that are either abnormally high or unusually consistent. The perpetuation of the returns that a Ponzi scheme advertises and pays requires an ever-increasing flow of money from investors to keep the scheme going.
The system is destined to collapse because the earnings, if any, are less than the payments to investors.
It's not hard to draw parallels between this definition, and a government sanctioned scheme that relies on today's contributions (from future beneficiaries) to pay today's beneficiaries, who invested years ago, into a program that is destined for collapse.
For Mitt Romney, or any other GOP candidate to try to cast Rick Perry as a guy who wants to "abolish social security" is nothing but a tactic to scare today's seniors, and is despicable.
UPDATE: another video added below....