[quote=John Ogre]
The Social Security surplus can and was (prior to the 60’s) invested primarily in marketable securities. The link below can answer all the basic questions.
I’ll take your word for it that you’ve read that somewhere. But on the linked site i found:
Q27: Do the Social Security Trust Funds earn interest?
A: Yes they do. By law, the assets of the Social Security program must be invested in securities guaranteed as to both principal and interest. The Trust Funds hold a mix of short-term and long-term government bonds. The Trust Funds can hold both regular Treasury securities and “special obligation” securities issued only to federal trust funds. In practice, most of the securities in the Social Security Trust Funds are of the “special obligation” type. (See additional explanation from SSA’s Office of the Actuary.)
and
The Social Security trust funds, managed by the Department of the Treasury, are the Old-Age and Survivors Insurance (OASI) and Disability Insurance (DI) Trust Funds. Since the beginning of the Social Security program, all securities held by the trust funds have been issued by the Federal Government.
There are two general types of such securities:
1.special issues—securities available only to the trust funds; and
2.public issues—securities available to the public (marketable securities).
The trust funds now hold only special issues, but they have held public issues in the past.
I think maybe the disconnect is in #2 of the second quoted section. It refers to marketable securities. But that’s not stocks. It’s marketable securities issued by the US government. The same debt instruments that you or I could buy. Either way, the only investment option for SS trust funds is now, and has always been, to lend the money to the federal government.
