Is Social Security a Ponzi Scheme?

Maybe. I think each person has to make up his or her own mind on this. First of all it is important to think about the good it does. Second, it is important to think about where the money is coming from. And third it is important to think about who has "Borrowed" the money since the 1930s. So, the money comes from a certain portion of the wages of all employed people. Theoretically, it was supposed to be saved in a fund drawing interest and then paid out to poor people who didn't have enough money to live on when they retired. (It has changed a great deal from this ideal way of doing things). Also, who has been borrowing money from the fund all along and never intending to pay it back? The U.S. Government has been borrowing all along, especially during the 1970s and 1980s. Will the money they "borrowed" ever be paid back. The answer is "No". However, I don't think any congressman or Senator would borrow money now because it might collapse Social Security. But suffice it to say that the main reason there is no Social Security money much left is that the government borrowed most of it already. (They don't tell you that by the way).

So, when I was young I also thought it was sort of a ponzi scheme because even in the 1960s and I was 12, to 21 in 1969 people didn't believe Social Security would be there. However, if they were paid wages it was always automatically deducted. But then, it was possible to (if you owned your own business) not pay yourself a wage or a salary. By not paying yourself a wage or a salary and treating your business only as an investment many people I knew didn't have to pay social Security at all. Other people (especially way out in the country) were paid in cash and also never paid Social Security either. So, the two kinds of people that didn't pay Social Security taxes were many business owners and many poor people who were only paid in cash. However, what this actually means is that if you are one of these poor people who are paid in cash is that literally you can never retire. You can die but you can't retire ever. And if you owned a business and want to retire you only can retire if you have saved enough money to retire. Many rich and poor people find themselves in this position every day.

However, if you have been working for one or more companies over the years and then you retire after having paid into Social Security, you can collect at whatever rate you are quoted when they send you the yearly letters from the Social Security administration.

So, is Social Security a Ponzi Scheme? It depends upon who you are. If you are very rich and don't care about the survival of the common man you might call it a ponzi scheme. If you are poor and it is all you have to stay alive after you retire, you will call it a Godsend.