The biggest Ponzi scheme in history

Friends,

I remain optimistic about the longer term, but I still awaken each morning with a sense of dread. I’m sure some of you do, too.

Start with Elon Musk’s bonkers comment that Social Security is “the biggest Ponzi scheme of all time.”

In a Ponzi scheme, a con artist lures investors into a fake investment project, pockets the cash, and then gets new “investors” to funnel their cash to the earlier investors — until there are no new recruits and the whole thing collapses. The last ones in are suckers left holding worthless bags.

Social Security is not a Ponzi scheme. It’s a high-functioning, universal, and 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 simple “pay as you go” program. Current workers, via the payroll tax, fund payouts for retirees and disabled people. In 2024, about 1 in 5 U.S. residents received Social Security.

I used to be a trustee of the Social Security trust fund. I know what I’m talking about.

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 that the Social Security trust fund is slowly running out of money is the trustees never anticipated that so much of the nation’s total income would be in the hands of so few people (such as Elon Musk).

The simple way to fix this is to lift the cap on income subject to Social Security payroll taxes, which is now $176,100.

Elon Musk, Jeff Bezos, and Mark Zuckerberg fulfilled their 2025 Social Security payroll tax obligations a few minutes past midnight on January 1. Most Americans continue paying payroll taxes all year.

If you want to see a real Ponzi scheme, look no further than the crypto investments Musk and Trump have hyped.

Trump’s new cryptocurrency, “$Trump,” soared and then crashed, just like every other Ponzi scheme. It generated enormous profits for insiders like Trump, but a cumulative $2 billion in losses for more than 800,000 other investors.

Trump claims ignorance. “I don’t know if it benefited” me, he said. “I don’t know much about it.” (The Trump family and its business partners earned nearly $100 million in trading fees alone on the coin.)

Musk has been promoting “dogecoin” since 2019. In the days following Trump’s announcement of the launch of Musk’s so-called Department of Government Efficiency (DOGE), the value of dogecoin soared over 70 percent. Since then, it’s dropped like a rock. Another classic Ponzi scheme.

With Trump now in office, crypto is back to its Ponzi ways. It’s emerging from a four-year federal crackdown on crypto fraud, market manipulation, and other scams following the collapse of Sam Bankman-Fried’s crypto exchange FTX in 2022 — one of the biggest Ponzi schemes in recent memory.

Tomorrow, Trump is even holding a “crypto summit” at which he’ll promote the idea of a federal crypto reserve that will give crypto schemes a temporary boost by increasing demand for them.

But why should American taxpayers foot the bill for a crypto reserve? The most obvious winner will be Trump, whose own crypto venture carries millions of dollars in tokens that are to be included in the reserve.

Other winners will be crypto executives, many of whom donated extensively to Trump’s reelection effort. One example: Ripple, whose XRP token is one of the five that Trump said would be included in the reserve — and which donated $45 million to an industrywide PAC that sought to help elect Trump and other Republicans.

Trump’s crypto efforts are ways to curry his favor by paying him off.

Consider Justin Sun, a Chinese cryptocurrency entrepreneur whom the Securities and Exchange Commission charged with securities fraud in March 2023.

After Trump was elected in 2024, Sun bought $30 million worth of Trump’s World Liberty Financial crypto tokens, putting $18 million directly into Trump’s pockets. Since then, Sun has invested another $45 million in WLF. Altogether, Sun’s investments have netted Trump more than $50 million.

Trump’s Securities and Exchange Commission just dropped its prosecution of Sun.

The SEC also dropped its case against the crypto trading platform Coinbase after the platform donated $75 million to a political action committee associated with Trump and $1 million to Trump’s inauguration.

To top it off, the SEC just ruled that “memecoins” aren’t securities, meaning that Trump’s novelty crypto tokens won’t be subject to any regulatory oversight. An open invitation to more Trump Ponzi schemes.

My real dread has to do with the much bigger Ponzi scheme that Trump and Musk are peddling.

They’re promising huge “savings” from destroying the federal government — including programs like Social Security and Medicaid — savings that will go to America’s wealthy and big corporations in the form of tax cuts.

At Musk’s urging, the Social Security Administration recently announced it will consolidate the current 10 regional offices it maintains into four and cut at least 7,000 jobs from an agency already at a 50-year staffing low.

The Republican budget recently pushed through the House cuts over $880 billion out of Medicaid.

Who will get left holding the bag? Most Americans.

Zoom out and you’ll see the biggest Ponzi scheme of them all — the entire Trump 2 regime.

Trump is promising to “make America great again” by raising tariffs, deporting more than 11 million people, taking a wrecking ball to the federal government, pulverizing democracy, and joining Putin and other global dictators.

Trump is the con artist behind this giant Ponzi scheme. He lured voters into this fake MAGA project, pocketed some of the cash and rewarded his billionaire backers and friends (including Musk) with more, and will leave most Americans with a corrupt and decimated society.

I’m still optimistic about our power to overcome this and our resilience in bouncing back from it. But the dread I feel when I open my eyes in the morning concerns the sheer magnitude of the largest and most cynical Ponzi scheme in history.