‘Shut Up’: Elon Musk Faces Backlash After Calling Social Security ‘the Biggest Ponzi Scheme of All Time’ While His Companies Rake In Billions from U.S. Taxpayers
Not content with decimating the country’s federal workforce, Elon Musk told podcaster Joe Rogan Friday that Social Security is spiraling toward insolvency and must be reformed.
Musk likened it to an illegal pyramid scheme where returns are generated not through smart capital allocation, but the influx of money from new investors.
“Social Security is the biggest Ponzi scheme of all time,” said Musk, drawing a rebuke from one X user who said, “It is a lifeline to escape death from destitution. Billionaires have no f***ing concept of the financial challenges of growing old in America.”
America’s system is traditionally known as “pay-as-you-go” and is typical of how most wealthy countries deal with retirees. When Americans retire, they collect their basic pension, the costs of which are financed through payroll taxes. Employees contribute 6.2% of their wages up to a maximum of $176,100, while U.S. employers have to match that sum as part of their non-wage labor outlay. Self-employed workers pay 12.4%.
These funds go into the Social Security Trust Funds, which pay benefits and earn interest from U.S. Treasury bonds. However, the term “Social Security Trust Funds” could be misconstrued. It sounds like a big pile of cash is set aside for retirees. In reality, every dollar collected from workers goes straight to paying current retirees.
Before 2010, there was extra money or a surplus, but the government spent it elsewhere instead of saving it. Now, Social Security is running on a mix of current taxes and borrowed money, with the government expected to rack up $4.1 trillion in debt by 2033 to keep the checks coming.
Fewer working-age Americans are paying to fund their pension, a predicament sure to worsen with the Trump administration’s crackdown on illegal immigrants. Meanwhile, retirees are living longer.
Over 73 million people — mostly seniors — count on Social Security for their monthly checks. A late or missed payment isn’t just an inconvenience; it can throw their finances into chaos.
“We better fix what we’ve got right now because if it’s bad now, it’s going to be much worse in the future,” Musk told Rogan.
Many on the right have pushed to raise the retirement age. In a June blog post, Rachel Greszler, senior research fellow at the Roe Institute, said that the normal eligibility age for collecting Social Security retirement benefits should be raised to 70 to help address the impending funding cliff faced by the Social Security Administration (SSA).
“To restore Social Security’s intent, policymakers should gradually increase the normal retirement age from 67 to 69 or 70 — moving the age up by one or two months per year—and index it to life expectancy,” Greszler proposed in a recent blog post.
But President Donald Trump has repeatedly reassured Americans he will not touch Social Security. In June 2023, he said, “Under no circumstances should Republicans vote to cut a single penny from Medicare or Social Security.”
“DO NOT CUT the benefits our seniors worked for and paid for their entire lives. Save Social Security,” he said.
Democrats seized upon Musk’s comments, citing them as proof that Republicans can’t be trusted not to tamper with Social Security.
John Larson, the ranking Democrat on the House Ways and Means subcommittee for Social Security, blasted the attack as evidence of a plan to gut the program.
“We will stand together to resist these cuts in every way possible,” he said Sunday.
On X, the Musk-owned social media platform, Texas congressman Greg Casar posted, “A guy who makes $8 million a day off the government thinks seniors getting $65 a day they worked their whole lives to earn is a ‘ponzi scheme.’ Protect Social Security. Fire Elon Musk.”
And Washington U.S. Sen. Patty Murray disputed Musk’s claim about Social Security.
“Social Security is not a Ponzi scheme it’s a promise that every American pays into so they can retire with dignity,” she wrote on X. “Get loud and tell Elon Musk to keep his hands OFF social security.”
By definition, a Ponzi scheme, named after Italian businessman Charles Ponzi, is an investment scam in which “some early investors are paid off with money put up by later ones in order to encourage more and bigger risks.”
House Speaker Mike Johnson on Sunday lauded Musk’s efforts with the Department of Government Efficiency (DOGE), telling “Meet the Press” that the tech billionaire has uncovered “enormous amounts of fraud waste and abuse” in Social Security and that “we have a moral responsibility to ensure that those programs are conducted in a way that does not allow for this massive fraud and abuse and that is what he is finding.”
Johnson insisted Republicans were focused on “ensuring efficiencies, ensuring that the programs are strengthened so that they can remain solvent and help the people they are intended to help.”
Former Social Security chief Martin O’Malley warned Monday that Musk’s DOGE cuts could cause the system to collapse in just “30 to 90 days.”