Obviously — we all understand what the reference is — but Ill spell it out. In a Ponzi, money is collected from Peter to pay Paul. Money is collect Joe to pay Peter. And on and on until it stops. One way of doing social security is taking money from each individual and setting it aside to pay that particular person later. However, social security is a tax that is redistributed (or distributed) and so in that sense it is not a real ponzi.
