There’s a danger there too. You’d end up with the Federal Government becoming a significant (or even majority) shareholder in a number of corporations.
Bullfeathers. All that is needed is sector funds, individual company stocks are too much of a gamble. It would take over 18 trillion dollars to become the majority stakeholder in all US companies and there is no way that the federal governement is going to go all in instantaneously.
If the US started down this path, it would drive investment as individual investors would want to ride the wave of new money flowing into the market. It would attract even more foreign investment because the US stock market would have a reduced downside risk. I would estimate annual GDP growth at anywhere from 5 to 7% for the foreseeable future if we just redirected the SS contributions into a mix of 20% Treasuries, 20% High Quality State and Local Bonds and 60% Total Market Index.
The increased tax revenue from economic growth would be more than enough to pay Social Security benefits to current recipients, with a phase out for younger participants. As an added benefit, it would allow the Fed to discontinue Quantitative Easing and market forces would be less distorted.
And most important, it would signal to the rest of the world that investment is the key to the future, and countries all over the world would start doing the same with their social security funds.