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Elon Musk said on Joe Rogan’s show last week that social security is “the biggest Ponzi scheme of all time”.
Rubbish. In a Ponzi scheme, a con artist lures investors into a fake investment project, pockets the cash, and then gets new “investors” to funnel cash to the older ones – until new recruits slow down and the whole thing collapses. Suckers are left holding worthless bags.
Social security is not a Ponzi scheme. It’s an 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 “pay as you go” program. Current workers, via the payroll tax, fund payouts for retirees and disabled people. In 2024, about one in five US residents received social security.
I used to be a trustee of the social security trust fund. I know social security.
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 social security is running out of money is that its trustees never anticipated America’s current degree of income inequality – with so much of the nation’s income in the hands of relatively few people (such as Elon Musk).
The 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 1 January. Most Americans keep paying payroll taxes all year.
You want a real Ponzi scheme? Look at the crypto investments Musk and Trump have hyped.
Trump’s new cryptocurrency, $Trump, soared and then crashed – exactly like a Ponzi scheme. It generated enormous profits for insiders and a cumulative $2bn in losses for more than 800,000 other investors.
Trump claims ignorance. “I don’t know if it benefited” me, he said. “I don’t know much about it.” (The Trump family and its business partners earned nearly $100m in trading fees alone on the coin.)
Musk has been promoting Dogecoin since 2019. Its value surged over 70% in the days following Trump’s announcement of the launch of Musk’s so-called
“department of government efficiency” (Doge). Since then, it’s dropped like a rock. A classic Ponzi scheme.
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’s crypto exchange FTX in 2022, one of the biggest Ponzi schemes in recent memory.
On Friday, Trump is holding a “crypto summit” at which he’ll promote the idea of a federal crypto reserve that will give crypto schemes a temporary boost by increasing demand for them.
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’s re-election effort.
One example: Ripple – whose XRP token is one of the five that Trump said would be included – donated $45m to an industry-wide Pac that sought to help elect Trump and other Republicans.
In fact, most of Trump’s crypto schemes are just ways to curry his favor by paying him off.
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Consider Justin Sun, a Chinese cryptocurrency entrepreneur whom the Securities and Exchange Commission charged with securities fraud in March 2023.
After Trump was elected in 2024, Sun bought $30m worth of Trump’s World Liberty Financial (WLF) crypto tokens, putting $18m directly into Trump’s pockets. Since then, he has invested another $45m in WLF. Altogether, Sun’s investments have netted Trump more than $50m.
Trump’s Securities and Exchange Commission just dropped its prosecution of Sun.
The SEC also dropped its case against the crypto trading platform Coinbase after the platform donated $75m to a political action committee associated with Trump and $1m to Trump’s inauguration.
To top it off, the SEC just ruled that “memecoins” aren’t securities, meaning that Trump’s novelty crypto tokens won’t be subject to any regulatory oversight. An open invitation to other Trump Ponzi schemes.
Trump and Musk are peddling a much bigger Ponzi scheme.
They’re promising huge “savings” from destroying the federal government (including wrecking programs like social security and Medicaid) – savings that will go to America’s wealthy and big corporations in the form of tax cuts.
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 $880bn most likely out of Medicaid.
Who will be left holding the bag? Most Americans.
Zoom out and you’ll see the entire Trump 2 regime is a giant Ponzi scheme – promising to “make America great again” by raising tariffs, deporting over 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 his fake Maga project, pocketed some of the cash and rewarded his billionaires backers with more and will leave most Americans with a corrupt and decimated society.
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Robert Reich, a former US secretary of labor, is a professor of public policy emeritus at the University of California, Berkeley. He is a Guardian US columnist. His newsletter is at robertreich.substack.com
