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 Musk).

The way to fix this is to lift the cap on income subject to social security payroll taxes, which is now........

© The Guardian