Democrats pushed back after he insisted that Social Security would work like a “Ponzi Plan” as Elon Musk continues to insist on cutting the federal bureaucracy, but one expert told Fox News Digital that Musk is on track with criticism of the agency.
“Musk’s statement that Social Security is the world’s largest Ponzi scheme has validity,” James Agresty of the nonprofit Institute Just Facts told Fox News Digital in response to a pushback from Elon Musk’s claims, including a “false” rating from Politifact.
“The Ponzi scheme works by receiving money from a new investor to pay current investors. It is the definition given by the SEC, and contrary to popular belief, that is exactly how social security operates.”
Agresti explained to Fox News Digital that Social Security, considered to be the target of Musk’s efforts at Doge, “as many believe, they will not take money and save us, and give it when we get older.”
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James Agresti, president of Just Facts, spoke to Fox News Digital about the opportunity to cut social security. (Fox News/Getty)
“What it does is to transfer money when we work young and pay Social Security taxes,” Agresty said. “That money, the majority of it, will soon leave the door to those currently receiving benefits. We currently have a trust fund, but in ’90 years of operation, that trust fund has enough money to fund the program’s operations for two years now.”
The fact that trust funds can only last for two years is not the result of the fund being “plundered” and not explained by Agresty, but was introduced to “put surplus” from money collected with taxes that Social Security pays interest without paying them immediately.
“Interest paid on higher than inflation,” Agresty said. “So the problem isn’t that the trust fund is being plundered. The problem is that Social Security works like a Ponzi plan.”
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Social Security Card (Kurt “Cyberguy” Knutsson)
One of the major social security critics from Republicans, including President Trump, was concerns that individuals who are dying or listed at age 100 or older are on the role and are receiving benefits.
Agresti told Fox News Digital that there is good reason to worry about the issue.
“What’s unclear to me at this point is whether the people in the book are actually receiving the check,” Agresty said.
“There’s a stimulus package back during the Obama administration, and the Obama administration sent stimulus packages to 80,000 people who died via Social Security Numbers, of which around 70,000 people knew they were dead, so I don’t know if they’re improving that situation since then, but it clearly makes it clear that the system doesn’t keep up with the current pace of data, which offers an opportunity for fraud.”
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Democrats also argue that Musk is trying to remove the profits that older people have just gained. Agresti told Fox News Digital that it wasn’t what was going on.
“There have been a lot of misinformation at this point recently,” Agresty said. “When Doge came in and proposed that the Social Security Agency cut, I think it would be about 10,000 workers, and Democrats erupted that this would weaken Social Security. But the fact of the matter is that Social Security pays workers who pay the administrative overhead from the Social Security Trust Fund.
Agresti told Fox News Digital that Social Security’s current administrative overhead is $6.7 billion a year.
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In recent years, critics have raised questions about whether Social Security, in its current form, can maintain the solvent to pay benefits to Americans who have paid over the past decades.
Agresti told Fox News Digital that the program will soon be “insolvent” in 2035 if no changes are made.
“To feel how social security is being cut off from fully funded pension plans, we’ll need an additional $272,000 in additional payroll taxes from everyone who pays payroll taxes right now to maintain the solvent in the program and put them in the same solid financial position as the actual pension plan,” Agresti told Fox News Digital.
“I give you another way to prove this point. If you retired in 1980, it took you about three years to receive Social Security benefits to regain the value of your payroll tax.
Andrew Mark Miller is a Fox News reporter. Find him on Twitter @andymarkmiller and email him with tips to Andrewmark.miller@fox.com.
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