Social Security in the U.S. is a Ponzi Scheme

[Dutch Uncle]

Very true. Some lost their homes too.

I wouldn't be surprised if the markets fall again drastically. Anyone on the verge of retirement might want to start shuffling their accounts and putting their funds into safer vehicles.

Privatizing government is simply a trend that has been happening since the 70s: to move taxpayer funds into the pockets of private companies who will take their cut of the profits. The rich will get richer and the American Taxpayer will pay for it.

 

[Libhater]

Correct. Tragically, some never collect anything if they die young.

You just made one of my points as to why people are getting a raw deal by relying on social security to plan for retirement. If
a person who contributes to the SS farce does indeed die before reaching that retirement age, then zero $$ of their SS plan
will be shelled out to family members.......ZERO.

 

[ThatOwlWoman]

Privatizing government is simply a trend that has been happening since the 70s: to move taxpayer funds into the pockets of private companies who will take their cut of the profits. The rich will get richer and the American Taxpayer will pay for it.

Yep. Eventually they will discover that the more impoverished consumers are, they less they will spend on whatever products and/or services the corporate owners are offering. It's a classic example of cutting off your nose to spite your face.

 

[Dutch Uncle]

You just made one of my points as to why people are getting a raw deal by relying on social security to plan for retirement. If
a person who contributes to the SS farce does indeed die before reaching that retirement age, then zero $$ of their SS plan
will be shelled out to family members.......ZERO.

 

[Uncensored2008]

1. Your return on your "contribution" is -4%. That's NEGATIVE 4%.

2. If you die unexpectedly, your "contribution" is absorbed into the system, your family sees $0.00.

3. If you were to actually invest that same money into an IRA, most people would retire millionaires, and if they died unexpectedly,
their family would have access to that wealth.

4. The Social Security tax is just another failed attempt at Collectivism.

5. Your "contribution" is not properly invested by the Government. It is literally used to pay the SS checque to retired people now.

6. Social Security should be phased out, allowing people to invest those earnings tax-free into a retirement portfolio, so they can
actually retire in comfort. A new system should be implemented to help people that are actually destitute.

7. Look at your pay stub. Actually look at it. Understand that you are being robbed. That "contribution" isn't really a contribution.
It's not voluntary. It is forced upon you. It is a tax. Stop believing the lie.

While all of this is true, how would you address it?

Taking away everything most retirees have is a non-starter. Continue as has been for all over 50 using current SS rules laws. Buy out those between 20 and 50, eliminate it going forward?

 

[Uncensored2008]

The question of whether Social Security is a Ponzi scheme comes up a lot because of how it’s structured. A Ponzi scheme is a fraud where returns for older investors are paid using funds from newer investors, not from actual profits, and it collapses when there aren’t enough new participants. Social Security, on the other hand, is a government-run program where current workers’ payroll taxes fund benefits for current retirees, with the promise that future workers will do the same for them.

There are similarities: both rely on a steady flow of new contributors to keep going. Social Security isn’t generating wealth or investing most of its funds for profit—it’s a pay-as-you-go system. If the number of workers shrinks or taxes don’t cover payouts, it runs into trouble, much like a Ponzi scheme when recruitment dries up. Critics point to this and say it’s unsustainable, especially with an aging population—fewer workers supporting more retirees. The Social Security Administration’s own projections show the trust fund reserves could be depleted by 2035 if nothing changes, forcing benefit cuts or tax hikes.

But there are key differences. A Ponzi scheme is illegal, secretive, and designed to enrich a few at the top before it inevitably fails. Social Security is transparent, mandatory, and backed by the government’s taxing power, which can adjust rates or borrow to keep it solvent. It’s not a scam meant to collapse—it’s a social contract, flawed or not, that’s been running since 1935. Ponzi schemes don’t have that kind of longevity or legal authority.

So, is it a Ponzi scheme? Structurally, it shares some traits—relying on new money to pay old obligations—but it’s not a fraud in intent or execution. It’s more like a system with Ponzi-like risks that depend on demographics and political will to stay afloat. Whether that makes it “sustainable” or just a slower crash is up for debate. What do you think—does the government’s role change the equation for you?

@Grok

So Social Security is a LEGAL Ponzi scheme.

Are you woking to Kim Jong Un?

 

[Uncensored2008]

Grok just described a Ponzi scheme, admitted Social Security is one, and then tried to justify it. Basically, Grok says social security works like a Ponzi scheme but because the government runs it, it isn't a Ponzi scheme.

Exactly - Grok said SS is a Ponzi scheme, but a legal one. I'm not sure the Lizard Cat read the answer before posting it.

 

[AProudLefty]

Reading comprehension is fleeing.

 

[AProudLefty]

Perhaps this will help.

Is Social Security a Ponzi scheme? The facts behind Elon Musk's claim - Poynter

Social Security’s structure, oversight and safeguards make it fundamentally different from a Ponzi scheme

www.poynter.org

 

[T. A. Gardner]

Most people receive far more social security than they pay in.

So? People who have IRA's, 401K, savings accounts, or investments receive more, usually far, far, more than they paid into those. Social Security's ROI is for shit. That's one reason to flag it as a Ponzi scheme.

 

[T. A. Gardner]

Perhaps this will help.

Is Social Security a Ponzi scheme? The facts behind Elon Musk's claim - Poynter

Social Security’s structure, oversight and safeguards make it fundamentally different from a Ponzi scheme

www.poynter.org

The Social Security system, which started in 1935, works on a “pay-as-you-go” basis that transfers current workers’ payroll tax payments to people who are already retired.
From the cited article.

THAT is the whole basis of a Ponzi scheme. Early investors get paid by later investors. The money going into the scheme is never invested in anything. The article even admits it.

This structure has some similarities to how new Ponzi scheme investors provide payouts to earlier investors.
Then the opinion writer(s) from the Poynter Institute, wedding and banquet hall (yes, they provide these services at their "headquarters" in Florida, make the following assertions:

No. 1: Social Security is not fraudulent.
So? Charles Ponzi didn't set out to commit fraud either, but he ended up doing so. Since social security is run just like a Ponzi scheme, it could end up fraudulent too.

No. 2: Social Security’s operators do not take a cut.

Irrelevant. If the scheme falls apart because there aren't enough new investors to pay current ones, the scheme falls apart.

No. 3: Social Security is operated in the open.

No more so than say Bernie Madoff's Ponzi scheme. Just because the government is operating it doesn't change that it's a Ponzi scheme.

No. 4: Social Security has built-in oversight.

The government is overseeing the operation of their Ponzi scheme. Yea, that gives me confidence...

No. 5: Social Security offers realistic returns.

The writer(s) admit it's pay-as-you-go. How do you get an ROI on something with nothing invested? Aside from that, any investments that would be made have a pathetic ROI because they're only invested in government owned securities, the entity that runs the Ponzi scheme!

No. 6: If financially stressed, Social Security is able to adjust its funding or benefit streams.

This is the icing on the cake. If social security fails the author(s) argue, the government can always step in with taxpayer money to cover the shortfall.

What a scheme! Only the government could get away with a fraud like that! The government runs a Ponzi scheme in plain sight, tells the public it isn't a Ponzi scheme and smacks down anyone that won't participate with legal action. Then they cover this shit with a fig leaf, "But it has oversight and is audited!" followed by saying if and when the scheme falls apart it'll be "Too big to fail" and the shortages will be made up by taxing the shit out of everyone to cover it.

I rate the Poyner article as

 

[AProudLefty]

I'll put you in agreeing to eliminate the Social Security that the US citizens paid into.

 

[Libhater]

While all of this is true, how would you address it?

I would suggest that today's generation of people who have reached the age of being employed should immediately open up
some kind of long term weekly or monthly paycheck investment plan such as an IRA. Those currently paying into SS will not
be touched. I'm talking about dishing SS altogether for our new generation. I would also like to see Medicare and Medicaid
be entirely dished as well. Let these new workers rely on making their individual rights to open up some sort of medical account
in their own name, where it won't get taxed, and where they'll be able to use that money for any medical or other emergency
need. There are plenty of investment options that would not only suffice for their medical needs, but those options will be
gaining interest along the way, not losing money like any government run healthcare or social security plan does.

 

[ULTRA MAGA]

The problem with your lie is that you cannot possibly know how long a recipient will live. Some people get zero...tragically. Sure...you can leave a retirement account in a will, although it will be taxed.

Using inflated numbers to illustrate a point, take someone who earns $50k/year. Round off to $3k per year paid into FICA, with a matching $3k immediately from employer. After 25 years said employee paid $75k, with employer paying another $75k.

According to SS website, monthly payout is $1600/month, which equates to $19,200/year. How long does one have to live to reap rather large rewards?

Your lie also assumes that the market never corrects. In '08, millions of retirees would have been devastated when their retirement savings suddenly disappeared. Thankfully, they had SS


Put another way, right now the most anyone pays/year into SS is +/- $11k/year. That has increased drastically in the last 7 years, but lets say you paid the maximum amount for $25 years. Employer matched your contribution. Round numbers you have $275k invested, and you reap more than $60k/year in SS payouts. That is all based upon waiting until 70 to collect. At 62 you reap $36k/year

How many years do you have to live in order to be way ahead of the game?

You people quickly reveal yourselves as broke with your bullshit. People who have never saved don't understand compound interest.

Do you know what the rule of 72 is? Of course you don't because you have never saved a nickel.

But of course you will google it now and pretend you knew. Which is fine because at least you learned something today. Happy to help.

 

[Poor Richard Saunders]

AI is a lot of things but it's not math clueless like you are. Shut the fuck up while you are less far behind.

AI is very math clueless. It is a large language model. It searches for what was posted on the internet and the internet is full of math that was done wrong.

 

[Nordberg]

Somebody is making money, lots of it in a Ponzi scheme. Remember Madoff or Ponzi? Who is making money off SS? The idea of a Ponzi scheme is not applicable to SS. Musk is lying as usual.

 

[ULTRA MAGA]

AI is very math clueless. It is a large language model. It searches for what was posted on the internet and the internet is full of math that was done wrong.

By golly you are absolutely correct. I used an actual compound interest calculator and AI was way off!

You will have much more money than AI thought. Of course you are still clueless about how any of it works.

The average SS payment is $1900 a month. You would have to live to be 520 years old to benefit the same sum as you would have saving $310 a month for 50 years in the average mutual fund. Think about that for a minute. It's actually mind boggling the ripoff of SS to we the people.

Even though you can't understand them, numbers don't lie.

 

[Althea]

You just made one of my points as to why people are getting a raw deal by relying on social security to plan for retirement. If
a person who contributes to the SS farce does indeed die before reaching that retirement age, then zero $$ of their SS plan
will be shelled out to family members.......ZERO.

That's the only point you might have, but the rest of your lies are a waste of keystrokes. If you have a retirement account and you die when the market is down, your heirs get very little. Any money goes to pay any outstanding bills and then the remainder is taxed. The best argument you might make is that the comparison is a wash, with SS being a guarantee vs a risk.

And most people have both, so your point is truly moot.

 

[Dutch Uncle]

I'll put you in agreeing to eliminate the Social Security that the US citizens paid into.

JPP MAGAts are almost all elderly and suffering from cognitive decline just like their Orange Jesus. They are already collecting social security and have no problem denying their own kids and grandkids the benefits.

 

[Nordberg]

Realism does not enter into the Trumpian world. The reason we started SS was that many older Americans were starving. The stories of old people living off cat food, which was cheap then abounded. The reality is a lot of people live day to day and they cannot accumulate wealth. Lots get sick or injured and cannot work. Many are born with mental or physical problems and cannot work. In some cases, the father or mother dies and the kids are adrift. SS helps all those people.
Ther rightys pass judgment on people they know nothing about. Paul Ryans father died and SS made it possible for him to survive and go to college. Once in office, he attacked SS the institution that saved him. That is what the right does.