The following is part of a post by former Labor Secretary Robert Reich:I remain optimistic about the longer term, but I still awaken each morning with a sense of dread. I’m sure some of you do, too.
Start with Elon Musk’s bonkers comment that Social Security is “the biggest Ponzi scheme of all time.”
In a Ponzi scheme, a con artist lures investors into a fake investment project, pockets the cash, and then gets new “investors” to funnel their cash to the earlier investors — until there are no new recruits and the whole thing collapses. The last ones in are suckers left holding worthless bags.
Social Security is not a Ponzi scheme. It’s a high-functioning, universal, and exceptionally efficient part of the American social safety net — the opposite of a Ponzi scheme. Which is why the overwhelming majority of Americans oppose cutting it
Social Security is a simple “pay as you go” program. Current workers, via the payroll tax, fund payouts for retirees and disabled people. In 2024, about 1 in 5 U.S. residentsreceived Social Security.
I used to be a trustee of the Social Security trust fund. I know what I’m talking about.
As the Social Security Administration explains, “In 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.”
The only reason that the Social Security trust fund is slowly running out of money is the trustees never anticipated that so much of the nation’s total income would be in the hands of so few people (such as Elon Musk).
The simple way to fix this is to lift the cap on income subject to Social Security payroll taxes, which is now $176,100.
Elon Musk, Jeff Bezos, and Mark Zuckerberg fulfilled their 2025 Social Security payroll tax obligations a few minutes past midnight on January 1. Most Americans continue paying payroll taxes all year. . . .
My real dread has to do with the much bigger Ponzi scheme that Trump and Musk are peddling.
They’re promising huge “savings” from destroying the federal government — including programs like Social Security and Medicaid — savings that will go to America’s wealthy and big corporations in the form of tax cuts.
At Musk’s urging, the Social Security Administration recently announced it will consolidate 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.
The Republican budget recently pushed through the House cuts over $880 billion out of Medicaid.
Who will get left holding the bag? Most Americans.
Zoom out and you’ll see the biggest Ponzi scheme of them all — the entire Trump 2 regime.
Trump is promising to “make America great again” by raising tariffs, deporting more than 11 million people, taking a wrecking ball to the federal government, pulverizing democracy, and joining Putin and other global dictators.
Trump is the con artist behind this giant Ponzi scheme. He lured voters into this fake MAGA project, pocketed some of the cash and rewarded his billionaire backers and friends (including Musk) with more, and will leave most Americans with a corrupt and decimated society.
