The first part sounds like they created a user management system: normally a single table with fields like username, password-hash, real name, address, etc, and sometimes a couple of other tables for groups/roles and cross-ref tables for relationships. In this case the user table would also probably have ids/references to the various government backend systems that the site used to verify your identity, income, etc as you signed up.
The rest of it sounds like they botched making this system scalable, to handle both the number of possible users (every adult in the US) and the rate at which they'd be signing up. "Endless technological loops" might refer to either a circular reference in an overly-complex schema, or to normal dependency checking in the schema which takes too long to evaluate within the database when the database is under enormous load.
The rest of it sounds like they botched making this system scalable, to handle both the number of possible users (every adult in the US) and the rate at which they'd be signing up. "Endless technological loops" might refer to either a circular reference in an overly-complex schema, or to normal dependency checking in the schema which takes too long to evaluate within the database when the database is under enormous load.