Musk, Social Security, and the Ponzi-Scheme Boomerang
Dismantling the most prominent social welfare program of the last century is undoubtedly an extremist undertaking and Musk is employing Trumpism as a discourse to help make that happen. Whether he succeeds is dependent in no small part on our ability to call out and resist his verbal jujitsu.
In an interview with podcaster Joe Rogan, the world’s richest person Elon Musk late last week called Social Security “the biggest Ponzi scheme of all time.” It was yet another “pot calling the kettle black” moment in the run-on sentence called Trumpism.
I say run-on sentence because it is important to highlight Trumpism as featuring a nefarious discourse self-consciously deployed by Donald Trump and his acolytes to normalize their extremism. Trumpism as a discourse obfuscates so as to legitimate what has become its extremist threat to the existing political system, the rule of law and U.S. Constitution. It is a distinctive way of speaking that facilitates highly questionable action. We see this repeatedly in the Trump era.
Trumpism as a discourse most prominently features three verbal maneuvers: gaslighting, coopting, and boomeranging. All three are intertwined in the disingenuous effort to overturn our liberal democracy and further the move toward a more illiberal autocratic political system, where Trump and his followers get to claim they are saving us from the failures of the current political system. Gaslighting is where you deflect a criticism by saying that the problem is something other than what the critic alleged, thereby insulating yourself from that criticism. For instance, the January 6th attack on the Capitol was actually an inside job perpetrated by the FBI. Coopting is where you adopt the language of your critics so that you are the one with the just cause and they are the one who is deserving of condemnation. The January 6th attack on the Capitol was an instance of Trump supporters standing up for democracy, not trying to undermine it. Boomeranging is where you send criticism directed at you right back at your critics. In this case, the claim is that the critics of the January 6th insurrection are actually the ones who are threatening democracy. These are all lies, aided by disinformation, consciously deployed to pollute public discourse and open the door to allowing Trump and is supporters to overthrow the existing constitutional order.
Why toss the Ponzi scheme boomerang now? Perhaps either because you do not know how Social Security works, or you don’t care because you are so keen to legitimate your extremist actions of illegally decimating the cornerstone of the U.S. welfare state.
With Trump’s second term as president beginning, the discourse of Trumpism has now become commonplace in American politics. It had worked effectively to help Trump regain the presidency. He now is abusing the powers of that office to among other things unleash Musk as a temporary advisor to the president to illegally and unconstitutionally begin without congressional authorization dismantling the federal bureaucracy and the programs its implements.
Musk has been recruited by Trump to take on the role of special advisor for allegedly seeking to root out waste, fraud and abuse from the federal bureaucracy, even as Musk’s private companies continue to profit in the millions of dollars from contracts from that bureaucracy. For some reason, Musk’s own contracts have been exempted from his investigations, but Social Security has not. Dismantling the most prominent social welfare program of the last century is undoubtedly an extremist undertaking and Musk is employing Trumpism as a discourse to help make that happen. Whether he succeeds is dependent in no small part on our ability to call out and resist his verbal jujitsu.
Dismantling Social Security would be very significant, for it not only provides major benefits to over 70 million retirees and persons receiving disability and survivor benefits (about one in five Americans). The program was enacted by Congress during the Great Depression with the Economic Security Act of 1935 (which quickly came to be known as the Social Security Act). It has become the cornerstone of the American welfare state, limited as it is compared to its counterparts in the rest of the developed world. It is nonetheless the most effective anti-poverty program in the history of the country, basically reducing the poverty rate among the elderly by half once its benefits started getting adjusted annually in 1972 to keep up with inflation. It has long been considered the “third rail” of American politics for any politician who tries to tamper with it usually ends up getting repudiated, just as President George Bush did when he tried to privatize it after winning re-election in 2004. Now Trump is going down that road but using the discourse of Trumpism to legitimate undermining this bedrock foundation of the U.S. welfare state.
Calling Social Security the “biggest Ponzi scheme in American history” is pure Trumpism. It is a boomerang. Many people have pointed out the Ponzi-scheme nature of Musk’s own preferred cryptocurrency Dogecoin. Dogecoin was the source for Musk calling his anti-federal government initiative “DOGE” (Department of Government Efficiency). Musk’s response was like him saying “no Dogecoin is not a Ponzi scheme, but Social Security is,” thereby redirecting the criticism of Dogecoin (and all cryptocurrencies) toward the government’s largest and most effective social welfare program. Cryptocurrencies, like Dogecoin, but also even more prominently Bitcoin, have been, for the last decade or so, very popular, especially with people who want to be free of having to rely on government-backed currency like the dollar. Cryptocurrencies have an anti-government elan that attracts all kinds of people, including libertarians and even anarchists. Calling Social Security the biggest Ponzi scheme in history is an anti-government boomerang perpetuated in the name of speculators who want to be free of government regulation.
Strictly speaking, a Ponzi scheme is where those who initially invest in some initiative reap profits from those who subsequently invest, and those subsequent investors will gain only if there are further investors. People are lied to in that there is no actual productive activity that is being invested in, contrary to what they were told. There is only a system of forwarding investments forward to the people who came before you. Once no new investors appear, the flow of profit stops and people are left with no returns on their investment. The largest Ponzi scheme ever was conducted by Bernard Madoff who for decades told people he successfully invested their money in stocks and other investments but actually just forwarded new investments to his clients until the flow of money stopped and he was revealed in 2008 to have defrauded people of tens of billions of dollars.
Actually, neither Social Security nor cryptocurrency is necessarily a Ponzi scheme. Crypto investors are not usually lied to that there is some supposed productive enterprise they are investing in, and Social Security recipients are told that will receive government guaranteed benefits regardless of how their contributions are invested or not. In both cases though, current contributions are used to pay out benefits to people who paid in previously.
In an attempt to make Social Security seem all-American, individualistic and capitalistic, it was originally sold to the American public as a “social insurance” program making it seem like it was no different than private insurance where people pay in to finance their own benefit. This sleight of hand was called the “insurance myth,” for people were never really financing their own benefit but contributing to a collective funding of the program overall. Social insurance is simply not the same as private insurance. It is more a collective than individual effort.
Yet, what is important here regarding the boomerang is that Social Security is in fact superior to cryptocurrencies just because it provides government backed, guaranteed benefits. The anti-government posture of cryptocurrencies, including Musk’s preferred Dogecoin, makes them vulnerable to being seen as way riskier than Social Security. Musk’s boomerang fails, Dogecoin is more like a Ponzi scheme than any government guaranteed benefit.
It is true that Social Security periodically needs tweaking by Congress to ensure that contributions keep up with what is needed to pay out to retirees and others. But that has consistently been done for almost a century. Why toss the Ponzi scheme boomerang now? Perhaps either because you do not know how Social Security works, or you don’t care because you are so keen to legitimate your extremist actions of illegally decimating the cornerstone of the U.S. welfare state. Is it because Musk as an adult immigrant never bothered to learn American public policy while in college or later, or because Musk just wants to destroy the government in the name of his libertarian fantasy? In any case, his Ponzi-scheme boomerang might to some degree work with segments of the public. For that reason alone, we need to highlight this particularly pernicious instance of Trumpism as a dangerous discourse.
