The SS System was never designed to “invest” in any usual meaning of the word. It was meant to buy US Treasuries only - in other words, it was just feeding the black box of government finance, in other words it is and always was just a tax.
It was NEVER meant to store value to meet future obligations - obligations were to be paid out of current SS collections, i.e., taxes. If the government ever tried to liquidate the “trust fund” it would effectively just be printing money and borrowing it back, just like any other deficit spending. There is no trust fund, thats a fiction.
The idea is actually sound, given a stable population of retirees vs workers; the problems come when the ratio of retirees to workers increases. Unfortunately the idea has this misleading veneer of “investment” over it, which makes it difficult to understand and generates a lot of misdirected rhetoric.
One argument for SS of the sort we have is that a government-run investment system that purchases private assets will eventually end with direct government control of the economy; government-appointed investment managers will be calling the shots in every boardroom, besides working from the outside through regulation.
IRA’s and 401K’s are a way around this, which have been quite successful; but they don’t provide the social insurance functions of SS.
There is no trust fund, thats a fiction.
But, but, everyone knows there is a trust fund. After all, that is all the dems can talk about when the subject of SS comes up. Like every time a Republican gets the idea that some type of privatization would be good for America. /sarc
Maybe I should have said, the system SHOULD have been designed to allow private insurance to cover future obligations, under government control. That is until I reviewed this:
One argument for SS of the sort we have is that a government-run investment system that purchases private assets will eventually end with direct government control of the economy;
AAAKK! There must be a better way? What was Chile’s program that got such rave reviews a few years back. Apparently it had holes also, or we would still be hearing about it.