Social security is a highly efficient safety net. But the president\u2019s crypto plans and job cuts leave Americans holding the bag<\/p>\n\n\n\n
Elon Musk<\/a> said on Joe Rogan<\/a>\u2019s show last week that social security is \u201cthe biggest Ponzi scheme of all time\u201d.<\/p>\n\n\n\n Rubbish. In a Ponzi scheme, a con artist lures investors into a fake investment project, pockets the cash, and then gets new \u201cinvestors\u201d to funnel cash to the older ones \u2013 until new recruits slow down and the whole thing collapses. Suckers are left holding worthless bags.<\/p>\n\n\n\n Social security is not<\/em> a Ponzi scheme. It\u2019s an exceptionally efficient part of the American social safety net \u2013 the opposite<\/em> of a Ponzi scheme. Which is why the overwhelming majority of Americans oppose cutting it<\/a>.<\/p>\n\n\n\n Social security is a \u201cpay as you go\u201d program. Current workers, via the payroll tax, fund payouts for retirees and disabled people. In 2024, about one in five US residents<\/a> received social security.<\/p>\n\n\n\n I used to be a trustee of the social security trust fund. I know social security.<\/p>\n\n\n\n As the social security administration explains<\/a>: \u201cIn 2025, when you work, about 85 cents of every social security tax dollar you pay goes to a trust fund. This fund pays monthly benefits to current retirees and their families and to surviving spouses and children of workers who have died. About 15 cents goes to a trust fund that pays benefits to people with disabilities and their families.\u201d<\/p>\n\n\n\n The only reason social security is running out of money is that its trustees never anticipated America\u2019s current degree of income inequality \u2013 with so much of the nation\u2019s income in the hands of relatively few people (such as Musk).<\/p>\n\n\n\n The way to fix this is to lift the cap on income subject to social security payroll taxes, which is now $176,100.<\/p>\n\n\n\n Elon Musk, Jeff Bezos and Mark Zuckerberg fulfilled their 2025 social security payroll tax obligations a few minutes past midnight on 1 January. Most Americans keep paying payroll taxes all year.<\/p>\n\n\n\n You want a real Ponzi scheme? Look at the crypto investments Musk and Trump have hyped.<\/p>\n\n\n\n Trump\u2019s new cryptocurrency, $Trump, soared<\/a> and then crashed \u2013 exactly like a Ponzi scheme. It generated enormous profits for insiders and a cumulative $2bn in losses<\/a> for more than 800,000 other investors.<\/p>\n\n\n\n Trump claims ignorance. \u201cI don\u2019t know if it benefited\u201d me, he said<\/a>. \u201cI don\u2019t know much about it.\u201d (The Trump family and its business partners earned nearly $100m in trading fees alone on the coin.)<\/p>\n\n\n\n Musk has been promoting Dogecoin since 2019. Its value surged over 70% in the days following Trump\u2019s announcement of the launch of Musk\u2019s so-called With Trump now in office, crypto is emerging from a four-year federal crackdown on crypto fraud, market manipulation and other scams following the collapse of Sam Bankman-Fried\u2019s crypto exchange FTX in 2022, one of the biggest Ponzi schemes in recent memory.<\/p>\n\n\n\n On Friday, Trump is holding a \u201ccrypto summit\u201d at which he\u2019ll promote the idea of a federal crypto reserve<\/a> that will give crypto schemes a temporary boost by increasing demand for them.<\/p>\n\n\n\n But why should American taxpayers foot the bill for a crypto reserve? The most obvious winner will be Trump, whose own crypto venture carries millions of dollars in tokens that are to be included in the reserve. Other winners will be crypto executives, many of whom donated extensively to Trump\u2019s re-election effort.<\/p>\n\n\n\n One example: Ripple \u2013 whose XRP token is one of the five that Trump said would be included \u2013 donated $45m<\/a> to an industry-wide Pac that sought to help elect Trump and other Republicans.<\/p>\n\n\n\n In fact, most of Trump\u2019s crypto schemes are just ways to curry his favor by paying him off.<\/p>\n\n\n\n Consider Justin Sun, a Chinese cryptocurrency entrepreneur whom the Securities and Exchange Commission charged with securities fraud in March 2023.<\/p>\n\n\n\n After Trump was elected in 2024, Sun bought $30m worth<\/a> of Trump\u2019s World Liberty Financial (WLF) crypto tokens, putting $18m directly into the president\u2019s pockets. Since then, he has invested another $45m in WLF<\/a>. Altogether, Sun\u2019s investments have netted Trump more than $50m.<\/p>\n\n\n\n Trump\u2019s Securities and Exchange Commission just dropped its prosecution of Sun.<\/p>\n\n\n\n The SEC also dropped its case<\/a> against the crypto trading platform Coinbase after the platform donated $75m to a political action committee<\/a> associated with Trump and $1m to his inauguration.<\/p>\n\n\n\n To top it off, the SEC just ruled that \u201cmemecoins\u201d aren\u2019t securities, meaning that Trump\u2019s novelty crypto tokens won\u2019t be subject to any regulatory oversight. An open invitation to other Trump Ponzi schemes.<\/p>\n\n\n\n Trump and Musk are peddling a much bigger Ponzi scheme.<\/p>\n\n\n\n They\u2019re promising huge \u201csavings\u201d from destroying the federal government (including wrecking programs like social security and Medicaid) \u2013 savings that will go to the US\u2019s wealthy and big corporations in the form of tax cuts.<\/p>\n\n\n\n The social security administration recently announced it will consolidate<\/a> the current 10 regional offices it maintains into four, and cut at least 7,000 jobs from an agency already at a 50-year staffing low.<\/p>\n\n\n\n
\u201cdepartment of government efficiency\u201d (Doge). Since then, it\u2019s dropped like a rock. A classic Ponzi scheme.<\/p>\n\n\n\n