The only pushback I would make is that not everyone can invest in government instruments like bonds. If they did, we (as taxpayers) eventually have to pay back the interest on those bonds. I'm not sure we'd be in a better place.
I think an interesting question would be, if a large number of Americans were forced into investing for their retirements (rather than rely on SS), how would the markets react to that influx of capital? The Obamas of the world like to lambaste private companies, but would people take a more pro-capitalist, free-market approach to investing? Would more people favor business over big government?
I use long-term US Treasury bonds for comparison, because the Social Security Trust fund is invested in the equivalent of US Treasury Bonds. Also, my goal was to use real historical data, rather than some vague estimate. But, if I had actually been able to invest those funds myself, I wouldn't have used that asset allocation.
I think an interesting question would be, if a large number of Americans were forced into investing for their retirements (rather than rely on SS), how would the markets react to that influx of capital? The Obamas of the world like to lambaste private companies, but would people take a more pro-capitalist, free-market approach to investing? Would more people favor business over big government?
I think you would see an explosion of investment in business growth, along with jobs. Of course, there will be a substantial proportion of people that want to invest conservatively in only US Treasury Bonds, and that's fine. They'll actually increase the amount of capital buying bonds, and push down the dividend rates.
Chile went the route of privatization back in the 80's. Australia did it in the 80's. The result hasn't been perfect, and it has its detractors. But, it has created an entire nation of stock holders.