I'm honestly not sure you understand what a Ponzi scheme is - it's when people at the bottom have to keep putting more money in to pay out people at the top. As

I'm honestly not sure you understand what a Ponzi scheme is - it's when people at the bottom have to keep putting more money in to pay out people at the top. As you put it "tax people more, more money goes in, more money can go out." Exactly - you have to keep continually getting money from the people at the bottom (employees) via taxes to pay out to the people at the top (retirees). If you stop getting new money in the bottom, it collapses. If it collapses, people at the bottom get screwed. There is no way for a person at the bottom to make money unless more people come in beneath them. You're describing fluctuations in the market as making it a Ponzi scheme, and you say "Money can literally disappear in that kind of system." That is incorrect. Money doesn't disappear when stock prices go down - stocks prices change based on people buying and selling. If you buy stock, your money gets transferred to the person selling it. Money doesn't disappear.