
“Social Security is the biggest Ponzi scheme of all time.”
Elon Musk, February 28, 2025
For elected officials here in the U.S., Social Security is much like a live power line: touch it and they’re done. Social security, along with Medicare and Medicaid, is one of those sacred vessels of American life. It’s not just beloved; it is sacrosanct.
Thus, for a foreign-born oligarch like Elon Musk to disparage it as a “scheme” has become anathemic. As something of a pseudo-president, Musk is head of the newly created Department of Government Efficiency (DOGE), which has taken a hacksaw to a number of departments within the federal government. The declared goal is to reduce bureaucratic weight by slashing jobs and merging together certain divisions within the system. Nowhere in this morass of right-wing blather is a dedication to make people like Musk and their corporations to pay their share of taxes. But that’s a different issue.
To place things in proper perspective – and put elected officials like Trump in their place – social security has too many safeguards to be considered a Ponzi scheme. Before the Social Security Act of 1935, a large number of older Americans lived in abject poverty. At the time it was common for families to take in older relatives. But some people simply didn’t have that support and they were left to fend for themselves. The concept of providing for those who simply couldn’t work or take care of themselves is nothing new. Various societies throughout history have considered the fragilities of the human condition and sought to alleviate those difficulties. It is simply immoral to abandon those who can’t care for themselves. It’s also rather easy to look at those who won’t take care of their own lives and group them with the others.
The Social Security Act has been amended several times since 1935, but it differs from a Ponzi scheme in many ways.
1. Social Security is not fraudulent
A Ponzi scheme is a deliberate a fraud intent to mislead investors.
2. Social Security’s operators do not take a cut
Unlike with Ponzi schemes, Social Security is not a profit-generating gamble, and the officials who run it do not take a portion of it for themselves.
3. Social Security is operated in the open
Social Security is a transparent, government-run program with clear funding mechanisms.
4. Social Security has built-in oversight
Unlike a Ponzi scheme, Social Security has many layers of oversight, auditing, regulation and legal and financial systems in place to ensure accuracy and transparency.
5. Social Security offers realistic returns
The goal of Social Security is to provide basic income replacement, not to generate get-rich-quick returns. Ponzi schemes often promise unrealistically high gains.
6. If financially stressed, Social Security can adjust funding and/or benefits
A fiscal imbalance in Social Security can be corrected, but a Ponzi scheme can’t. Social Security beneficiaries can’t demand to be paid a balance in their account if they suspect something is wrong. There can’t be a “bank run” on Social Security, and problems ultimately can be resolved.
It doesn’t surprise me that Trump and the Republican Party are targeting Social Security, or rather that conservative Republicans in general haven’t struck back at the president. Social and political conservatives have always been leery about government programs designed to help people. Before Franklin R. Roosevelt’s “New Deal” policies (designed and implemented to address the brutal impact of the Great Depression), government’s primary purpose was to enact laws and collect taxes. The collapse of the U.S. stock market in 1929 and the subsequent financial calamities that ensued changed that mindset – at least among the more open-minded. Social Security was just one project resulting from such forward thinking.
In 1944, Congress passed the Servicemen’s Readjustment Act (later known as the GI Bill) to assist those returning from military service during World War II. It provided a myriad of aid and services to these individuals, such as education and housing. Again, many conservatives denounced it as welfare.
Similar criticisms befell Lyndon Johnson’s “Great Society” some two decades later. From this massive undertaking, we got Medicare and Medicaid. But, as Johnson declared, the government should ensure both “liberty and abundance” for all citizens – not just those who can afford it. And as before, critics deemed it socialized medicine.
While it’s surprising that the U.S. federal government can operate with such alleged overspending – a bloated bureaucracy – it does provide substantial safety and security to most everyone here. The attack on Social Security is monstrous. Trump has sworn to leave it alone, but I personally don’t trust him.
I’m fast approaching the official retirement age of 62, yet I know I won’t be able to sit back in my quiet suburban home and embark on my dream life of being a full-fledged writer. The Social Security system is supposedly insolvent. Raising the official retirement age (as many, including Musk, have suggested) or reducing benefits won’t repair that problem. Funding for the Iraq War alone could have made Social Security fiscally viable for generations. Still, the program must be handled with care. Touching it irresponsibly is, indeed, akin to touching that live power line.









