Consistent lies about the value of tariffs have been exposed as the stock and bond markets crashed. Yet, Vice President JD Vance took lying to a higher level, saying 40% of calls to Social Security are fraudulent. An interesting charge since data shows fraudulent Social Security calls are less than 1%. But lying about Social Security isn’t new.
Elon Musk, who dramatically cut the federal budget and workforce, regularly casts doubt on the validity of all federal programs, including Social Security. Social Security was conceived by two New Yorkers in 1932, when FDR, the New York governor and newly elected president, appointed Frances Perkins as the first woman in the Cabinet.
She worked for FDR in Albany and was his choice to be labor secretary. Sitting in FDR’s home on E. 65th St., they agreed to start an innovative retirement benefit called Social Security. Now in its 90th year, it’s one of the most popular federal programs, surviving with support of Republican and Democratic presidents decade after decade.
But Musk went beyond slashing workers, he labeled Social Security a Ponzi scheme. In fact, according to a study conducted by the National Academy of Social Insurance, Americans disagree. The study found 9 of 10 Americans believe Social Security to be one of the best federal programs, and say it must be a national priority.
What is a Ponzi scheme? It’s an egregious fraud. In a Ponzi scheme scammed investors are paid supposed returns from funding from other investors. All investors are cheated.
Is Social Security a Ponzi scheme? There’s no evidence. In fact, of all Social Security payments made to eligible Americans between 2015 and 2022, 99% were properly paid with less than 1% mistakenly made as overpayments, with most overpayments returned. It was intended to be a much needed retirement program, keeping aged Americans out of poverty and data shows that’s exactly what it is.
Currently, 9 of 10 Americans over 65 get Social Security, getting about $2,000 a month, about 50% of retirement income for 44% of all women and 40% of men. Without it, retirement would end, and aged Americans would be denied food, rent, health care, and die. Far from being a scheme, it’s essential.
A recent actual Ponzi scheme was created by Bernie Madoff. He wasn’t a government worker. Madoff, like Musk, was a rich American who committed fraud via a well designed Ponzi scheme. Madoff’s sin was identified, he was convicted and died in prison. He wasn’t the first rich American to commit fraud. There are many examples where rich Americans commit fraud.
In the early days of the 20th century fraudsters were called “Robber Barons.” Other companies like Enron also engaged in fraud. Of course, just like Social Security not being a fraud, and all government workers not being thieves, all corporations and all rich Americans aren’t fraudsters.
When Social Security was enacted, the government partnered with IBM, which, on its own nickel, created the technology setting Social Security up, so eligible Americans could get benefits a year after the program was enacted.
While Musk’s charge isn’t grounded in truth or reality, it’s far from the first time Social Security was trashed. In fact one of the officials of the radical John Birch Society made the exact same claim charging Social Security was a Ponzi scheme in the 1950s. It was debunked as a lie then, as it must be now.
If anyone engages in fraud, it must be exposed, and ended. Actions must be put in place so fraudsters are held to account. That’s why the position of inspector general was created, and incorporated into government agencies at all levels. Sadly, our current president removed IGs from many federal agencies. Days after he was inaugurated, he fired 17 IGs.
These federal IGs are charged with investigating and removing fraud. Also fired was the head of the U.S. Office of Special Counsel, which protects whistleblowers, and the head of the Office of Government Ethics. IGs were also fired at the Defense and Labor Departments and Office of Veterans Affairs.
Government must earn the trust of all Americans. But while trust must be earned, it’s just as important that unfounded baseless lies, and charges of fraud hurled at government, business or civic leaders must end. Stop the lies
Litow is a SUNY Trustee and former president of the IBM Foundation and former NYC deputy schools chancellor.
