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Yahoo
23-03-2025
- Business
- Yahoo
Expert turns tables on Dem critics after Musk accuses Social Security of being 'Ponzi scheme'
Democrats have pushed back after Elon Musk claimed that social security operates like a "Ponzi scheme" as he continues to argue for cuts to the federal bureaucracy, but one expert tells Fox News Digital that Musk is on track with his criticism of the agency. "Musk's statement about Social Security being the world's biggest Ponzi scheme does have validity," James Agresti, president of the nonprofit research institute Just Facts, told Fox News Digital in response to pushback from Elon Musk's claim, which included a "false" rating from Politifact. "A Ponzi scheme operates by taking money from new investors to pay current investors. That's the definition given by the SEC, and contrary to popular belief, that's exactly how Social Security operates." Agresti explained to Fox News Digital that Social Security, believed to be a target of Musk's efforts at DOGE, "doesn't take our money and save it for us, as many people believe, and then give it to us when we're older" like many Americans might believe. Expert Reveals Massive Levels Of Waste Doge Can Slash From Entitlements, Pet Projects: 'A Lot Of Fat' "What it does is, it transfers money when we are young and working and paying into Social Security taxes," Agresti said. "That money, the vast bulk of it, goes immediately out the door to people who are currently receiving benefits. Now there is a trust fund, but in 90 years of operation, that trust fund currently has enough money to fund two years of program operations." Read On The Fox News App The trust fund only being able to last for two years is not a result of the fund being "looted," Agresti explained, but rather it was put in place to "put surpluses in it" from money that Social Security collects in taxes that it doesn't pay out immediately and pays interest on. "The interest that's been paid on that has been higher than the rate of inflation," Agresti said. "So, the problem isn't that the trust fund has been looted. The problem is that Social Security operates like a Ponzi scheme." Doge's Plans To Offload Government Buildings Supported By Former Gsa Official One of the top Social Security criticisms from Republicans, including President Trump, has been a concern that individuals who are dead or listed with an age well over 100 years old are on the rolls and receiving benefits. Agresti told Fox News Digital that there are legitimate reasons to be concerned about that issue. "What's unclear to me at this moment is whether or not the people who are on the books are actually receiving checks," Agresti said. "Back during the Obama administration, there was a stimulus, and the Obama administration sent out stimulus checks via Social Security numbers to 80,000 people who were dead, and about 70,000 of them, the Social Security Administration knew they were dead. So I don't know if they've remedied that situation since then, but clearly the system is not keeping up with the pace of current data, and that provides an opportunity for fraud." Democrats have also made the case that Musk is attempting to strip away benefits that senior citizens have rightfully earned. Agresti told Fox News Digital that is not what is happening. "There's been a lot of misinformation about that as of late," Agresti said. "You know, when DOGE came in and suggested that the Social Security Administration cut, I think it was about 10,000 workers, Democrats erupted that this is going to weaken Social Security. But the fact of the matter is that Social Security pays those workers who are for administrative overhead from the Social Security trust fund. So, by cutting out the money that they're paying them, you actually strengthen the program financially." Agresti told Fox News Digital that the current administrative overhead for Social Security is $6.7 billion per year, which is enough to pay more than 300,000 retirees the average old age benefit. Questions have emerged from critics in recent years as to whether Social Security, in its current form, is even capable of remaining solvent to pay benefits to Americans who have paid in over the past few decades. Agresti told Fox News Digital that the program will "become insolvent" as soon as 2035 if changes are not made. "To give you a feel of how disconnected Social Security is from a fully funded pension plan, if to keep the program solvent and put it on the same firm financial footing as a real pension plan, it would require an extra $272,000 in additional payroll taxes from every person paying payroll taxes right now," Agresti told Fox News Digital. "I'll give you another way in which more numbers prove this point. If you retired in 1980, it took about three years of receiving Social Security benefits to get back the value of your payroll taxes plus interest. If you retired in 2000, it took 17 years. If you retired in 2020. it will take 22 years, assuming the program has enough money to pay those benefits, which it won't without another increase in taxes on another generation of Americans."Original article source: Expert turns tables on Dem critics after Musk accuses Social Security of being 'Ponzi scheme'
Fox News
23-03-2025
- Business
- Fox News
Expert turns tables on Dem critics after Musk accuses Social Security of being 'Ponzi scheme'
Democrats have pushed back after Elon Musk claimed that social security operates like a "Ponzi scheme" as he continues to argue for cuts to the federal bureaucracy, but one expert tells Fox News Digital that Musk is on track with his criticism of the agency. "Musk's statement about Social Security being the world's biggest Ponzi scheme does have validity," James Agresti, president of the nonprofit research institute Just Facts, told Fox News Digital in response to pushback from Elon Musk's claim, which included a "false" rating from Politifact. "A Ponzi scheme operates by taking money from new investors to pay current investors. That's the definition given by the SEC, and contrary to popular belief, that's exactly how Social Security operates." Agresti explained to Fox News Digital that Social Security, believed to be a target of Musk's efforts at DOGE, "doesn't take our money and save it for us, as many people believe, and then give it to us when we're older" like many Americans might believe. "What it does is, it transfers money when we are young and working and paying into Social Security taxes," Agresti said. "That money, the vast bulk of it, goes immediately out the door to people who are currently receiving benefits. Now there is a trust fund, but in 90 years of operation, that trust fund currently has enough money to fund two years of program operations." The trust fund only being able to last for two years is not a result of the fund being "looted," Agresti explained, but rather it was put in place to "put surpluses in it" from money that Social Security collects in taxes that it doesn't pay out immediately and pays interest on. "The interest that's been paid on that has been higher than the rate of inflation," Agresti said. "So, the problem isn't that the trust fund has been looted. The problem is that Social Security operates like a Ponzi scheme." One of the top Social Security criticisms from Republicans, including President Trump, has been a concern that individuals who are dead or listed with an age well over 100 years old are on the rolls and receiving benefits. Agresti told Fox News Digital that there are legitimate reasons to be concerned about that issue. "What's unclear to me at this moment is whether or not the people who are on the books are actually receiving checks," Agresti said. "Back during the Obama administration, there was a stimulus, and the Obama administration sent out stimulus checks via Social Security numbers to 80,000 people who were dead, and about 70,000 of them, the Social Security Administration knew they were dead. So I don't know if they've remedied that situation since then, but clearly the system is not keeping up with the pace of current data, and that provides an opportunity for fraud." Democrats have also made the case that Musk is attempting to strip away benefits that senior citizens have rightfully earned. Agresti told Fox News Digital that is not what is happening. "There's been a lot of misinformation about that as of late," Agresti said. "You know, when DOGE came in and suggested that the Social Security Administration cut, I think it was about 10,000 workers, Democrats erupted that this is going to weaken Social Security. But the fact of the matter is that Social Security pays those workers who are for administrative overhead from the Social Security trust fund. So, by cutting out the money that they're paying them, you actually strengthen the program financially." Agresti told Fox News Digital that the current administrative overhead for Social Security is $6.7 billion per year, which is enough to pay more than 300,000 retirees the average old age benefit. Questions have emerged from critics in recent years as to whether Social Security, in its current form, is even capable of remaining solvent to pay benefits to Americans who have paid in over the past few decades. Agresti told Fox News Digital that the program will "become insolvent" as soon as 2035 if changes are not made. "To give you a feel of how disconnected Social Security is from a fully funded pension plan, if to keep the program solvent and put it on the same firm financial footing as a real pension plan, it would require an extra $272,000 in additional payroll taxes from every person paying payroll taxes right now," Agresti told Fox News Digital. "I'll give you another way in which more numbers prove this point. If you retired in 1980, it took about three years of receiving Social Security benefits to get back the value of your payroll taxes plus interest. If you retired in 2000, it took 17 years. If you retired in 2020. it will take 22 years, assuming the program has enough money to pay those benefits, which it won't without another increase in taxes on another generation of Americans."
Yahoo
17-02-2025
- Automotive
- Yahoo
The truth about the Trump administration killing a $400 million Cybertruck deal
The Trump administration is spiking a plan to purchase $400 million in EVs in September, which many people assumed would be for armored Cybertrucks. This news comes after a document detailing federal contracts for fiscal year 2025 was made public. After this document was discovered, the State Department said it had no plans to fulfill any contract to purchase EVs from Tesla, even though the document listed Tesla by you believe government officials, the State Department was never pursuing Cybertrucks. The $400 million plan was made during the Biden administration in order to 'explore interest from private companies to produce armored electric vehicles,' a State Department official said late last week. In broad strokes, government contracts require a rigorous vetting process. First, companies express interest in being considered for the contract. Then, the government creates an 'official solicitation' for each company it would like to work with on the project. From there, companies present plans to the government, and the government selects a plan it feels fits the project's scope. According to the State Department, Tesla was the only company that expressed interest in this document publicly listed Tesla as the manufacturer selected, with one row noting 'Armored Tesla (Production Units)' and a valuation for the deal between $100 million and $500 million. On February 12, the document was quietly edited to remove all mention of Tesla. Elon Musk claimed on X that he was not aware of the deal, saying, 'I'm pretty sure Tesla isn't getting $400M. No one mentioned it to me, at least.' The State Department confirmed that specifying 'Tesla' on the spreadsheet was an error and suggested Tesla was listed because it was the only automaker to show interest in the armored vehicle contract. Speaking to Politifact, a State Department representative confirmed that Tesla was never selected for a government contract to deliver armored vehicles. The representative reminded everyone that former president Joe Biden signed an executive order in 2021 encouraging government agencies to purchase EVs whenever possible and that the former administration pursued an armored vehicle purchase plan. Tesla isn't the only automaker named on the sheet. BMW is (or was) also slated to deliver armored X5 and X7 SUVs to the government in a deal worth $20 million to $50 million. The government also planned or plans to purchase an 'Armored Sedan' and 'Armored EV (Not Sedan),' but no manufacturer is can only 'armchair quarterback' things at this point. Still, the point of contention here is that the spreadsheet only shows the government was planning to buy, or at least interested in, 'Armored Tesla' vehicles. We don't know if it specified truck-like vehicles, but given that there are more specific callouts for EVs elsewhere, it seems like a reasonable assumption. Furthermore, Tesla was the only company that showed any interest in this particular contract and, as such, was noted on the document as a placeholder of sorts. We suspect the same is true for BMW. We should also accept that many were outraged upon hearing about this deal because of Elon's current tampering with government affairs, particularly government spending. This struck us all as some handshake deal. The Cybertruck is also not as great a truck as it was supposed to be and has failed to live up to its hype. It doesn't make sense for it to be a State Department vehicle. Bad deals for bad vehicles will always cause outrage, and this one just surfaced at a particularly sensitive time in the United States. Luckily, the US government buying Cybertrucks doesn't seem to be a reality. We'll take an armored X7, though. That would be incredible. Love reading Autoblog? Sign up for our weekly newsletter to get exclusive articles, insider insights, and the latest updates delivered right to your inbox. Click here to sign up now!
Yahoo
06-02-2025
- Business
- Yahoo
The White House says Trump wants to close a favorite tax break of hedge fund managers
President Trump sat down with Republican lawmakers Thursday to discuss tax cuts and made a favorite deduction of hedge fund managers one of his targets, White House Press Secretary Karoline Leavitt said Thursday. Leavitt listed the "the tax priorities of the Trump administration" Thursday while reading from a prepared list. She had listed many familiar ideas, such as ending taxes on tips, but also included a promise to 'close the carried interest tax deduction loophole.' "The president is committed to working with Congress to get this done," she added. It's an idea that, if Trump follows through and pushes it, could endear him to many Democrats but will surely be a subject of skepticism from some of his GOP colleagues. Any move would also surely be the subject of intense lobbying from the hedge fund industry and private equity firms that have long taken advantage of the deduction. The carried interest deduction allows investment managers to pay a lower capital gains tax rate on the income they receive from their work as compensation. It's no small matter, with many capital gains subject to 23.8% taxes while the rate for regular wage income can be double that. Private equity companies like Apollo Global Management (APO), KKR (KKR), and Blackstone (BX) dropped on the remarks (Apollo Global Management is the parent company of Yahoo Finance). It's an idea that Trump has promised before only to see the effort not come to fruition. "Promise Broken," reads the Politifact tracker of Trump's previous first term promise on the issue. Trump pushed for repeal on the 2016 campaign trail but then downplayed the issue once in office and a repeal wasn't included in the 2017 Tax Cuts and Jobs Act. Leavitt also said Thursday in her brief remarks that the president wants to end a tax break that allows sports team owners to use that asset to pay lower income tax rates as well as 'adjust' the closely watched state and local tax (SALT) deduction. Eliminating the carried interest deduction has been a longtime priority of many on the left — a new bill from Democratic Senator Tammy Baldwin and Reps. Marie Gluesenkamp Perez and Don Beyer on the subject was also revealed Thursday. Baldwin immediately touted Trump's embrace of the topic. "Perfect timing," she wrote. "Time to get this done." But it could be a harder sell among Trump's own party, Current Senate Majority Leader John Thune, as just one example, took a prominent role in 2022 in heading off a previous effort to close the loophole. It was during that back and forth when Democrats looked to tackle the provision but were forced to strip it out because of opposition from then-Senator Kyrsten Sinema of Arizona, who worked with Thune and others on the issue. Ben Werschkul is Washington correspondent for Yahoo Finance. Every Friday, Yahoo Finance's Rick Newman and Ben Werschkul bring you a unique look at how U.S. policy and government affects your bottom line on Capitol Gains. Watch or listen to Capitol Gains on Apple Podcasts, Spotify, or wherever you find your favorite podcasts. Sign in to access your portfolio
