Elon Musk has taken the mission of reducing government waste through the Ministry of Government efficiency (DOGE). As of April 18, the agency estimated that it saved $ 155 billion in total.
And Musk's recent comments on “Joe Rogan experience” Suggest that the age of the radical reform is just beginning. The chief of the Doge said: “Social security is the largest Ponzi scheme of all time. »»
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Social security recipients and people who are a few years from the program may feel worried about Musk's comments. Is the technological billionaire on site or is social security financially solid? Here is what to consider.
Social Security converts workers of retirement income for people who have claimed their social security benefits. The idea is that a 30 -year -old man who pays $ 4,000 in social security will receive advantages of the next generation. Meanwhile, the payment of $ 4,000 goes to a retiree who has chosen to recover his payroll checks in terms of social security.
The main promise of social security is that if you pay the system, the next generation taxes will eventually provide you with retirement income.
Read then: 2 ways including Elon Musk's access to the American Treasury can have an impact on Social Security
A Ponzi diagram is a Investment fraud type. People are convinced to put their money in an investment that does not really exist, and their yields are funded by subsequent investors. A constant influx of new investors – and new money – maintains the afloat, but when investors choose to withdraw money or new investors cease to come, the diet collapses.
Using this definition alone, social security may seem to be a Ponzi scheme, but there are important differences.
A key difference between social security and a Ponzi program is clarity: Ponzi's diets use unrealistic yields as a means of attracting capital, while social security payments are more realistic. Low -income households tend to draw more from social security than they do, while high -income households generally derive less from social security than they have put in the system.
The Social Security Administration (SSA) also publishes updates on the finance of the program and the duration of its funds – the transparency that you will not obtain a Ponzi program.
The federal government also has ways to deal with budget shortages in the program, as to increase taxes Or print more money, which could increase inflation. Although none of these results seems ideal for consumers, measures can be taken. A Ponzi diagram has no such options, and he wouldn't use them either. After all, the purpose of a Ponzi program is not payments – it is enriching those who started it.
