The finance term for the Ponzi scheme is “fractional reserve banking”. It corrupts Adam Smith capitalism.
The way it works is simple- the government allows certain market players an unfair advantage… They can loan out money they don’t have. If the investment goes up, they make tons of money. If it goes down, the limited liability company allows them to walk away this pushing losses onto the public.
The result is a market with far more money than value, where wealth is continuously transfered to the privileged elite who are allowed to loan out the money they don’t have.