Progressive Politics

It's really not. A ponzi scheme is an investment scam that pretends you can profit while actually your money is being used to scam other people. And the money obviously ends up going to the guy running the scam.

Social security is a type of national insurance. We all pay a bit into the pot which is then distributed to those who need it. Maybe you'll need unemployment for a while, maybe you'll need care when you're older, maybe you're lucky enough that you'll never need anything. But it's a social safety net for all of us.

And yes most of us don't need it right now, so clever morons like Musk can spin it into "why am I paying for this other guy's unemployment?" That is the real scam, to break our willingness to lend a hand to our neighbors and often to ourselves.

In what way?

However, Social Security, unlike a Ponzi scheme, is not inherently fraudulent, nor does the program promise "investors" artificially high returns with little to no risk, a hallmark of this kind of investment fraud. The report above, for example, shows the administration's transparency about expected returns. source

It’s by definition not unless you consider anything that is paid in to by a group that then pays out to a group a Ponzi scheme. What’s your reasoning?

I would say it shares a key similarity to a ponzi scheme, but has entirely different goals, methods, and results.

Both of them pay initial "investors" with later investors funds. In a ponzi scheme, this is unknown to the later investors so that they can eventually be left holding the bag. But in social security, this is a known commodity, and the thought is that there will always be more people.

Unfortunately, that last part gets a bit nuanced with population decline and growing needs of the elderly. Either way, it's a good system or a good scheme, but it's definitely not a ponzi scheme. Because just like healthcare, even if we don't fund social security, elderly and disabled people are still going to need care and skip out on their bills when they die. So in the end, we're still paying for it but with extra steps and lawsuits.

Along with the other things people have mentioned ponzi schemes don't have a backstop . If a ponz scheme becomes insolvent the scheme falls apart. Despite all the doom republicans like to push on social security insolvency, if it happens it'll just get taken out of the general fund. It'll be hell on budget deficits for a while until congress gets its shit together and raises the income cap and solves this but people will still be getting paid.