Comments (9)

  1. cody graves says:

    Michael – A nice summary of the issues facing our Social Security Trust funds. A quick question – Do you consider a basic s&P 500 index fund the same as an ETF?
    Also for guidance on what the social security trustees might do, we might want to look at how equity investments are made in the Federal employee retirement system (FERS)

  2. David Lynn says:

    interesting (albeit likely very theoretical) exercise. investing in the public markets is not the reform that is needed, but that said, Two small comments that would tilt toward the “yes” camp:

    It is hard to argue that something that is appropriate for Calpers and plenty of state pensions and life insurance companies is not appropriate for the federal government.

    Also hard to argue the federal government is not invested in the market. Tarp? subisidies and lending to public corporations? or that treasuries are used all over the place as margin security against equity investments, creating significant indirect exposure? or corporate taxes and capital gains revenue?

  3. hi -sorry I cannot get this to use lower case
    Tanner is backwards – read his description – it is exactly the description of a Ponzi scheme – the assets are claims against future revenue – that means revenue from today’s young folks whose numbers are declining in ratio to the future beneficiaries.
    And the US government will not own equities or the market – it will be the beneficiaries in their accounts who own the investments – and those should not be only in equities but the full range of investments – the fund should be exactly like what government employees already have in their retirement accounts – further – the current so-called ‘lock box’ is empty – but the notional special bonds should be converted at rate of
    10% a year into the new real retirement accounts thanks – john sloan

  4. ian macgregor says:

    Sorry, but Unable to read your may 12 article as font is so faint it is virtually indistinguishable from the background. Perhaps it’s my laptop (or my failing eyesight) – don’t know. However, have not had this problem with past articles.


  5. Why are you negative on reits? No valuE In retail reits with strong balance sheets?

  6. David Frankel says:

    I find it astonishing that a discussion of fixing social security ignores the simplest and most effective fix available. Currently there is no social security tax on incomes over $127,200. Simply extending the tax to all income would fix the problem. Why should someone earning millions only pay the social security tax on $127,200?

  7. dick mcclow says:

    THe so called trust fund is just a drawer full of us treasury iou’s held by the social security administration trustees with lots of limitations on what can be done with them.
    When social security collected by the government exceeded the payouts, the treasury simply spent the money on whatever and gave the ssa iou’s. lately the process has been reversed as the payouts have exceeded the collections and the “trust fund” has been shrinking.
    when the trust fund is gone, the treasury will simply continue to borrow whatever is needed to make all the payments.
    also Ss recipients are senior creditors ahead of bondholders according law passed by congress years ago so don’t worry about getting your benefits (unless the printing presses break down).
    The major issue will be what the currency will be worth if the budget is wildly out balance. ss recipients will have cost of living increases that will help but adjustments will come only once a year.

    (pardon my all caps; my laptop won’t do lower case on this site at the moment)

  8. Richard says:

    The federal government has demonstrated enormous fiscal irresponsibility over the last two decades. It would be insanity to think they would somehow all of a sudden invest RESPONSIBLY.

  9. David says:

    A question actualy. When you refer to high quality, high yield bonds are you printing as bb- or bb. I’m a bit confused by the (dash).


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