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

[Libhater]

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.

 

[AProudLefty]

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.

We pay into it. Nice propaganda. Working for Elon?

 

[Libhater]

We pay into it. Nice propaganda. Working for Elon?

Of course you pay into it, and when you retire you'll be happy to know that your return from this Ponzi scheme netted you
an overall -4% $$.

 

[AProudLefty]

Of course you pay into it, and when you retire you'll be happy to know that your return from this Ponzi scheme netted you
an overall -4% $$.

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

 

[Hume]

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.

You get an F-. Everything you say is stupid.

 

[Libhater]

You get an F-. Everything you say is stupid.

Okay, so getting a -4% return on your many years of investing in SS is something you will accept as being stupid? Got it!

 

[T. A. Gardner]

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

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.

 

[anonymoose]

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.

Okay, so getting a -4% return on your many years of investing in SS is something you will accept as being stupid? Got it!

This is what Bush Jr. was trying to do with privatization of SS before he got upended by 9/11, then Iraq.
Forced contributions into stocks or for the truly dumb, fixed return money markets.
Even investing in savings accounts would be better.

If any administration can get it done it would be this one.

 

[Poor Richard Saunders]

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

Not true. It can vary widely since SS is based on a few of your highest earning years.

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

Again, not true since SS is more than just a retirement. It pays your family if you die when you have minor children.

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.

Again, not necessarily true. Someone who earned minimum wage for the last 40 years wouldn't even reach $500,000.
Someone that earned $15 an hour for 40 years would only have $940,000 at retirement.

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

Actually, the SS met it's original intent. It was to keep orphans and widows and old people out of poverty.

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

SS has always been pay as you go in that contributions pay the benefits of retirees. Then in the 1980s it was changed to collect more than it paid out. At that point, the GOP decided they would just use those extra moneys to pay for what should have been paid by the general fund. No way was ever figured out how to pay back the money which would have required higher income taxes.

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.

When Obama wanted to change the 401K rules to make it opt out instead of opt in, the GOP threw a hissy fit.

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.

Only an idiot like you would think that SS is a tax and not a "contribution."

 

[Hume]

Okay, so getting a -4% return on your many years of investing in SS is something you will accept as being stupid? Got it!

No. People pay into to it.

 

[T. A. Gardner]

No. People pay into to it.

What's that got to do with the ROI on those funds? Why does the social security administration pay out all the money they are taking in to current recipients? Why isn't that money invested to grow the fund?

 

[Hume]

What's that got to do with the ROI on those funds? Why does the social security administration pay out all the money they are taking in to current recipients? Why isn't that money invested to grow the fund?

Why don't you sell your possessions and give the money to Trump.

 

[T. A. Gardner]

Why don't you sell your possessions and give the money to Trump.

You picked a bad week to start sniffing glue...

 

[Hume]

You picked a bad week to start sniffing glue...

fuck off

 

[Libhater]

This is what Bush Jr. was trying to do with privatization of SS before he got upended by 9/11, then Iraq.
Forced contributions into stocks or for the truly dumb, fixed return money markets.
Even investing in savings accounts would be better.

If any administration can get it done it would be this one.

Yes, I remember Bush trying to start that privatization of SS for those new/young people who get their first jobs. Everyone currently on SS would continue to go along with paying into their SS scheme. I think Bush wanted these new/young people to open up their own private savings plan, or
a private medical plan where it would be government-hands-off. Of course, liberals will be upset that such a plan(s) would be totally against
their need or want to have government control every aspect of the individual's choice of their financial lives.

 

[gfm7175]

Again, not true since SS is more than just a retirement. It pays your family if you die when you have minor children.

You're purposely missing the point.

SS "benefits" are NOT inheritable. It is NOT a "separate fund". IRAs and 401k's ARE inheritable. They ARE "separate funds". The presence of certain survivor's benefits for SS is NOT equivalent to inheritance.

With IRAs and 401k's, the money stays within the family (if that's what the person decided upon). With SS, outside of various potential survivor's benefits, the money does NOT stay within the family... it is GONE, down the federal government "black hole".

Thus, Libhater's general framing of #2 is correct.

Again, not necessarily true.

No, his general framing of #3 is correct.

Someone who earned minimum wage for the last 40 years wouldn't even reach $500,000.

While this is true for total earnings (after taxes & health insurance), he specifically said "most people". Minimum wage earners are NOT "most people", and since 1938, spending 40 years earning minimum wage is incredibly rare (if not nonexistent).

Someone that earned $15 an hour for 40 years would only have $940,000 at retirement.

Random number. Incorrect calculation. One year's earnings (after taxes & health insurance) multiplied by 40 years is NOT the amount of money that one would have at retirement.

If someone is smart with their money during their lifetime and starts saving/investing a portion of it monthly at a young age, it is quite possible for someone making $15/hr to retire as a millionaire.

Since "most people" make at least $15/hour, it IS possible for "most people" to retire as millionaires. Libhater is correct yet AGAIN.

Actually, the SS met it's original intent. It was to keep orphans and widows and old people out of poverty.

You seriously believe that tripe?! You'll fall for ANY "heartstrings" BS excuse that government gives for enacting a policy, won't you?

 

[Yakuda]

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.

Correct

 

[Poor Richard Saunders]

You're purposely missing the point.

SS "benefits" are NOT inheritable. It is NOT a "separate fund". IRAs and 401k's ARE inheritable. They ARE "separate funds". The presence of certain survivor's benefits for SS is NOT equivalent to inheritance.

With IRAs and 401k's, the money stays within the family (if that's what the person decided upon). With SS, outside of various potential survivor's benefits, the money does NOT stay within the family... it is GONE, down the federal government "black hole".

Thus, Libhater's general framing of #2 is correct.

No, his general framing of #3 is correct.

While this is true for total earnings (after taxes & health insurance), he specifically said "most people". Minimum wage earners are NOT "most people", and since 1938, spending 40 years earning minimum wage is incredibly rare (if not nonexistent).

Random number. Incorrect calculation. One year's earnings (after taxes & health insurance) multiplied by 40 years is NOT the amount of money that one would have at retirement.

OMFG. You really are that stupid, aren't you. Most people didn't earn $15 an hour 40 years ago. In 2000, the median income was $42,000 per household that means roughly 50% of households earned less than $15 an hour for 40 hours each week.
Then I didn't calculate their retirement by multiplying their earnings. I took the amount withheld for FICA and calculated 40 years of earnings at the average S&P return if that FICA money had been invested in the market.

If someone is smart with their money during their lifetime and starts saving/investing a portion of it monthly at a young age, it is quite possible for someone making $15/hr to retire as a millionaire.

It is possible but not likely unless they get a return better than the market return. They would have to invest more than FICA is taking out of their paycheck since I included employers half in my calculations to show if they made the market returns they wouldn't have $1 million after 40 years. Most people actually see a return that is less than the market as a whole because of fees charged by investment managers. So a person making $15 an hour could have a million after 40 years if they saved 20% of their earnings.

Since "most people" make at least $15/hour, it IS possible for "most people" to retire as millionaires. Libhater is correct yet AGAIN.

Most did not make $15 an hour for 40 years. Median hourly wage in 2000 was $15.81. Median hourly wage in 1990 was about $13.31.

You seriously believe that tripe?! You'll fall for ANY "heartstrings" BS excuse that government gives for enacting a policy, won't you?

It seems you are delusional and when facts don't meet up with your beliefs, you just pretend the facts don't exist.

 

[gfm7175]

OMFG.

^^^^^^

You really are that stupid, aren't you.

Not as stupid as someone who punctuates a direct question with a period..........

Most people didn't earn $15 an hour 40 years ago.

Never said that they did.

In 2000, the median income was $42,000 per household that means roughly 50% of households earned less than $15 an hour for 40 hours each week.

So?

Then I didn't calculate their retirement by multiplying their earnings. I took the amount withheld for FICA and calculated 40 years of earnings at the average S&P return if that FICA money had been invested in the market.

Still an incorrect calculation. Still random numbers.

It is possible but not likely unless they get a return better than the market return. They would have to invest more than FICA is taking out of their paycheck since I included employers half in my calculations to show if they made the market returns they wouldn't have $1 million after 40 years. Most people actually see a return that is less than the market as a whole because of fees charged by investment managers. So a person making $15 an hour could have a million after 40 years if they saved 20% of their earnings.

It is possible for someone making $15/hr to retire as a millionaire.

Most did not make $15 an hour for 40 years. Median hourly wage in 2000 was $15.81. Median hourly wage in 1990 was about $13.31.

Wages change over time. Prices change over time. Inflation changes over time. There's so many variables involved with attempting such a calculation to the point that it just ends up being random numbers at the end of the day.

It seems you are delusional and when facts don't meet up with your beliefs, you just pretend the facts don't exist.

No, you're just pretending that incorrect calculations and random numbers somehow prove that "most people" can't retire as millionaires.

 

[Poor Richard Saunders]

^^^^^^


Not as stupid as someone who punctuates a direct question with a period..........

Never said that they did.

So?

Still an incorrect calculation. Still random numbers.

It is possible for someone making $15/hr to retire as a millionaire.

Show us how someone making $30,000 per year can put away $300 per month for retirement which would be necessary to get to that million over 40 years.

Wages change over time. Prices change over time. Inflation changes over time. There's so many variables involved with attempting such a calculation to the point that it just ends up being random numbers at the end of the day.

Thanks for showing us that your claim that they can retire as a millionaire is nothing but bullshit on your part as you try to argue that it is impossible to calculate any numbers.

No, you're just pretending that incorrect calculations and random numbers somehow prove that "most people" can't retire as millionaires.

Your lack of numbers only proves that your claim they can retire as millionaires is based on nothing since you just argued that the math is impossible for you to do.