The Ponzi Is Crumbling

Social Security Is on Borrowed Time—And It’s Not Because of Elon

Let's talk about Social Security. It’s a $1.4 trillion-a-year government program. Every American worker is forced to pay into it, yet no one has any control over where this money goes.

Elon Musk and DOGE (Department of Government Efficiency) just blew the lid off this mess, uncovering some truly shocking things.

For instance, you might’ve heard about their findings of people over 100—even as old as 369—still collecting benefits.

You might have also seen this tweet from Musk:

Before anyone who watches too much TV dismisses all this as just another data misread, let’s go over what we actually know.

• The Social Security Administration (SSA) admitted that over 6 million Social Security numbers are still active for people over 112 years old. Mind you, there are only a handful of humans on Earth that old.

• SSA admitted to sending out $71.8 billion in improper payments between 2015 and 2022, including checks to dead people. That might not sound like much given their budget, but it’s not exactly reassuring. Same goes for SSA’s claim that they stop payments at 115 unless the person proves they’re still alive. Give me a break.

• SSA audits from 2015 and 2023 claimed that “almost none” of the dead people in their system are cashing checks—but they also found 531 million Social Security numbers in circulation! For context, the U.S. population is about 340 million, with only 165 million active workers today. That’s a huge gap and a clear sign of billions lost to fraud, errors, identity theft—you name it—with millions of phantom beneficiaries still on the books.

• Those audits? They weren’t independent. They were conducted by SSA’s own Office of the Inspector General (OIG). So whatever the SSA says, we should probably take with a grain—or maybe a whole bag—of salt. And if they admit something is bad, chances are it’s even worse.

But you know what? None of this is even the real story. Here’s Doug Casey:

You have to pay into Social Security, or you risk landing in jail. Now, a proper social security program would be one where your contributions go into your own retirement account, invested in stocks. This way, your savings would grow along with the economy. But with Social Security, your money isn't invested in that; it's just government debt. People might think it's safe, but it's still debt that needs to be repaid someday. And with the U.S. national debt already at $36.5 trillion, I don't see how they can ever do it.

So, yeah, Social Security is basically a Ponzi scheme.

Think about it—it’s got all the hallmarks: paying out old investors (retirees) with new money (workers’ taxes) without any real savings (just government IOUs).

And the only thing worse than a Ponzi? One that’s going bankrupt.

That’s the real story here.

Built for a World That No Longer Exists

Before we talk about how bad things are today, we need to understand how we got here in the first place.

The year was 1935. America was in the Great Depression. The stock market had crashed. Banks were failing. Unemployment was at a massive 25%.

One out of every four Americans was out of work. Families lost their homes. Savings were wiped out. And elderly poverty was skyrocketing.

In classic government fashion, President Franklin D. Roosevelt saw an opportunity to expand federal power under the guise of helping people. He introduced the Social Security Act of 1935—a program that would collect taxes from workers and then pay out benefits to retirees when they turned a certain age.

The government marketed it as a revolutionary idea, and it certainly was—revolutionary in how it created dependency that would last for generations.

Before Social Security, retirement plans were rare—only 5% of workers had pensions. Most people worked until they physically couldn't anymore, then relied on their families or community charity to get by. It wasn’t perfect, but it kept the government out of the retirement business.

Social Security was sold as a safety net. But in reality, it created a massive government program that most people weren’t even expected to live long enough to use.

Think about this…

When Social Security was introduced, life expectancy was just 63 years. Yet the government set the retirement age at 65.

Only about 50% of men and 60% of women even made it to 65, meaning nearly half of all workers spent their lives paying into a system that would never pay them back.

And for those who did reach retirement? They weren’t expected to collect for long. In 1940, the average retiree only lived another 12 years.

The system wasn’t built to support decades of payouts—it was built on the assumption that most people wouldn’t be around to claim what they put in.

A Ticking Time Bomb

Compare that to today—if you make it to 65, you're expected to live another 20 years or more. That means Social Security is now paying out benefits for twice as long as originally intended.

Longer life expectancy, falling birth rates, and the massive wave of retiring baby boomers have created a math problem that simply doesn’t work anymore.

Just consider this…

In 1940, when Social Security actually started paying out—five years after its rollout—there were 159 workers for every retiree. Just 10 years later, that number had already dropped to 16.5 workers per retiree. And it only got worse from there. You can see this in the next chart.

As you can see, we’re down to about 2.7 workers per retiree today, and the SSA estimates that will drop to just 2.3 by 2035.

That’s an all-time low. And frankly, there’s no need for the timeline on the graph above to go any further—because 2035 is the year Social Security officially runs out of money.

You read that right. The combined OASI (retirement) and DI (disability) Trust Funds are projected to be depleted by 2035. In fact, the OASI fund is expected to run dry even sooner, by 2033.

In other words, Social Security is on track to be fully insolvent within the next decade.

Don't take my word for it. Here's a link to the official 2024 report of the Social Security Board of Trustees just turn to page 3.

In practical terms it means that unless something changes, benefits will automatically be cut by 20 to 25% across the board in 2033. But you can bet it will get worse from there.

When you net it all out, the Social Security trust funds could be short by roughly $3.5–$4 trillion by 2035, based on current trends. That’s how much they’d need to keep paying out scheduled benefits.

Now, here’s where it gets even worse. This crisis is set to collide with another financial disaster I talked about in a recent essay—a staggering $21.8 trillion in total projected deficits by 2035.

Put those numbers together. A $3.5–$4 trillion Social Security shortfall on top of $21.8 trillion in deficit spending. That means we’re looking at a total budget gap that could easily exceed $25 trillion.

Now, the Congressional Budget Office (CBO) in its most recent "Budget and Economic Outlook” report predicts that the U.S. economy will grow to $43.9 trillion by 2035.

So, if the government ends up needing to borrow another $25 trillion, that’s more than half the size of the entire U.S. economy.

This isn’t just unsustainable—it’s mathematically impossible. Remember, America’s current $36.5 trillion debt is already pushing 124% of GDP.

If that doesn’t scream fiscal disaster, I don’t know what does.

Something has to give—whether or not we still have tricentenarians cashing Social Security checks.