Economist Refutes Musk’s Claims About Social Security and Immigration

When Billionaires Explain Social Security: An Economist Sets the Record Straight

Elon Musk went on Fox Business recently and explained how Social Security works. It went about as well as you’d expect from someone who’s probably never waited in a Social Security office.

The Tesla CEO claimed we could save $600-700 billion annually by cutting waste and fraud in Medicare and Social Security. He also suggested Democrats use these programs to attract illegal immigrants and turn them into voters. Yes, he said that with a straight face.

Geoffrey Sanzenbacher, an economist who actually studies retirement benefits for a living, couldn’t let this slide. When a guy who launches cars into space starts explaining Social Security policy, sometimes the adults need to step in.

Reality Check: Can Immigrants Even Get These Benefits?

Here’s the thing about Musk’s theory – it falls apart immediately. Unauthorized immigrants can’t collect Social Security benefits or Medicare. They’re literally not eligible. It’s like claiming people sneak into movies to use the bathrooms. Sure, they’re in the building, but they’re not getting what you think they’re getting.

What actually happens is kind of ironic. Many unauthorized immigrants pay into Social Security through payroll taxes but never collect a dime. The Social Security Administration estimates they contribute billions annually.

Sanzenbacher puts it plainly: “To the extent that unauthorized immigrants ‘participate’ in these programs, they do so on the revenue side.” In other words, they’re funding your grandma’s Social Security check, not collecting their own.

But What About Legal Immigration?

Okay, so unauthorized immigrants aren’t draining Social Security. But would expanding legal immigration hurt these programs? Sanzenbacher looked at this too.

Turns out, immigrants are actually pretty good for Social Security’s health. They tend to:

• Be younger workers paying into the system when we desperately need it
• Have kids who grow up and contribute too
• Use less Medicare on average than native-born Americans
• Keep working past traditional retirement age

As Sanzenbacher notes, immigrants arrive “exactly at the time we need it – as the baby boomers age.” The timing couldn’t be better if we’d planned it.

Let’s Talk Real Numbers

The Social Security trust fund faces genuine challenges. By 2033, it might only pay about 80% of promised benefits without reforms. That’s a real problem worth discussing.

But immigrants aren’t causing this problem. The issue is demographics – we have more retirees and fewer workers supporting each beneficiary. Legal immigrants actually help this ratio by adding younger workers to the mix.

Consider this: if we removed all immigrant contributions to Social Security tomorrow, the trust fund would deplete faster, not slower. It’s basic math, not political spin.

The Actual Issues Worth Debating

Sanzenbacher isn’t saying immigration has zero costs. There are legitimate discussions about wage impacts in certain industries, education costs, and infrastructure needs. These are real policy questions that deserve serious debate.

But we can’t have that debate if we start from fantasy land. As he puts it, “we can never get to these sorts of questions if we start with the complete fiction that immigrants are coming here to take advantage of entitlements.”

The economist’s conclusion? “If anything, these programs take advantage of them.”

Why This Matters for Your Retirement

Look, Social Security’s future affects all of us. Whether you’re 25 or 65, you have skin in this game. We need real solutions based on actual facts, not conspiracy theories from people who’ve never had to worry about retirement security.

The truth is pretty straightforward: immigrants, both legal and unauthorized, are net contributors to Social Security. They’re not stealing benefits – they’re helping fund them. Many pay in for decades knowing they’ll never collect.

Next time someone tells you immigrants are draining Social Security, ask them for evidence. Chances are, they’re repeating something they heard from someone who heard it from someone who… well, you get the idea.

Meanwhile, the real threats to Social Security – demographic shifts, rising healthcare costs, political gridlock – go unaddressed while we argue about problems that don’t exist. Maybe that’s the real waste Musk should be worried about.

But hey, what do economists know? They only spend their careers studying this stuff. Clearly, we should trust the rocket guy instead.