What if SS trust diversified?

[Elias824]

They should have been buying high rated bonds from a variety of sources, other countries, and even high rated corporate bonds. Maybe then there would be some hope of getting back the 2+ Trillion that is owed to the SS trust and maybe we would have been able to make a decent return. Instead we let the federal government abuse the funds and use it just like another source of income.
Opinions?

 

[AyashiKaibutsu]

They'd have bought into those massed securities that blew up, and we'd have a lot of destitute old and disabled people trying to figure out how to get food by any means necessary.

 

[her209]

It'd be against the law.

http://www.ssa.gov/oact/progdata/fundFAQ.html#n2

By law, income to the trust funds must be invested, on a daily basis, in securities guaranteed as to both principal and interest by the Federal government. All securities held by the trust funds are "special issues" of the United States Treasury. Such securities are available only to the trust funds.

In the past, the trust funds have held marketable Treasury securities, which are available to the general public. Unlike marketable securities, special issues can be redeemed at any time at face value. Marketable securities are subject to the forces of the open market and may suffer a loss, or enjoy a gain, if sold before maturity. Investment in special issues gives the trust funds the same flexibility as holding cash.

Data on trust fund investments provide a breakdown by interest rate and trust fund for any month after 1989.

 

[Jhhnn]

Half the investors in the world are running for the cover of US Treasuries, so, uhh, let's trade ours in for something more stylish, right?

 

[charrison]

model it after the tsp and be done with it.

Hell assign those tbill to people rather than iou to the general fund for SS.

 

[Craig234]

I think it's an interesting question, the main issue is having people with the public's interest be the ones to advise on it, Elizabeth Warren or Paul Krugman types.

 

[piasabird]

There has not been a SS trust for around 20 years. They took the excess and spent it on the government. In a civilian company that would have been embezzelment!

 

[IronWing]

model it after the tsp and be done with it.

Hell assign those tbill to people rather than iou to the general fund for SS.

This isn't a bad idea but I can foresee endless problems with trying to move that much new money into the markets. The SS fund is so big it would swamp any market it moved in. The TSP, while large, is still in the same league as the larger private mutual funds. Would having hundreds of billions pouring into the markets really benefit the beneficiaries or would it simply inflate the markets?

 

[WHAMPOM]

They should have been buying high rated bonds from a variety of sources, other countries, and even high rated corporate bonds. Maybe then there would be some hope of getting back the 2+ Trillion that is owed to the SS trust and maybe we would have been able to make a decent return. Instead we let the federal government abuse the funds and use it just like another source of income.
Opinions?

SS is a PayGo system, the mistake is having a surplus that the Government can dip into. Adjust it quarterly just to cover expenses and no more.

 

[GuitarDaddy]

There has not been a SS trust for around 20 years. They took the excess and spent it on the government. In a civilian company that would have been embezzelment!

Do some research and educate yourself, it's much more reliable than repeating stupid shit you heard from someone else.

The SS trust fund(OASI and DI) has been funded the exact same way as it is today from its very inception in 1939, with special issue treasury bonds.

http://money.msn.com/retirement-plan/5-myths-about-social-security-weston.aspx?GT1=33042


From myth #2 in the article

"The trust fund has worked this way since its inception in 1939, by the way. Congress didn't place the fund "off limits" at one point and then later decide to raid it, despite hoax email assertions to the contrary."

 

[charrison]

This isn't a bad idea but I can foresee endless problems with trying to move that much new money into the markets. The SS fund is so big it would swamp any market it moved in. The TSP, while large, is still in the same league as the larger private mutual funds. Would having hundreds of billions pouring into the markets really benefit the beneficiaries or would it simply inflate the markets?

Start with just assigning tbills to a person, rather than how it is done now.

Would you rather know how many tbills the govt owes or how many tbills are owed to the entire population with no time frame of repayment

 

[GuitarDaddy]

SS is a PayGo system, the mistake is having a surplus that the Government can dip into. Adjust it quarterly just to cover expenses and no more.

You have no idea how insurance or anuities work, what you suggest is ridiculous.

 

[Elias824]

They'd have bought into those massed securities that blew up, and we'd have a lot of destitute old and disabled people trying to figure out how to get food by any means necessary.

If the invested in AAA rated bonds from a variety of sources including some corporate and international bonds they would have been relatively safe from this mess. How are things better now, do you thing the federal government has another 2+ trillion to give back to SS?

 

[Elias824]

SS is a PayGo system, the mistake is having a surplus that the Government can dip into. Adjust it quarterly just to cover expenses and no more.

I agree that its been a huge issue to let the government dip into SS for extra cash, but if we built a system that was run independently of the government and had are more diversified portfolio then we may have been able to actually get some of that surplus back. We do kind of need that surplus to help pay for the boomers retiring in a few years.

 

[ElFenix]

Do some research and educate yourself, it's much more reliable than repeating stupid shit you heard from someone else.

The SS trust fund(OASI and DI) has been funded the exact same way as it is today from its very inception in 1939, with special issue treasury bonds.

http://money.msn.com/retirement-plan/5-myths-about-social-security-weston.aspx?GT1=33042


From myth #2 in the article

"The trust fund has worked this way since its inception in 1939, by the way. Congress didn't place the fund "off limits" at one point and then later decide to raid it, despite hoax email assertions to the contrary."

that's not quite right.
http://www.ssa.gov/oact/progdata/fundFAQ.html

In the past, the trust funds have held marketable Treasury securities, which are available to the general public. Unlike marketable securities, special issues can be redeemed at any time at face value. Marketable securities are subject to the forces of the open market and may suffer a loss, or enjoy a gain, if sold before maturity. Investment in special issues gives the trust funds the same flexibility as holding cash.

 

[piasabird]

Medicair is costing more than SS. It is the real problem.

Just lower the payout every year to equalize the funds available to payout SS. Just buy apple stock.

SS ===> GM ===> PROFIT.

When the government bails out companies they (we) should be getting a return on our investment even if it is like 2% or 5%.

Maybe we should issue shares of stock in SS and pay out really low dividends. Let people invest in people. Make it a tax exempt capital gain!

 

[lothar]

I think it's an interesting question, the main issue is having people with the public's interest be the ones to advise on it, Elizabeth Warren or Paul Krugman types.

No, thank you.
I'd rather advise myself instead of having those people you mention with public interest or anyone from the government advise it.
Bill gross, Warren Buffett, and many others will be much better than any of the advisers you suggest.

Those who want their money to be managed by Elizabeth Warren or Paul Krugman can go to them. You go to them.
Those who want their money to be managed by Bill Gross/Mohammed El-Arian or Warren Buffett can go to them. I will go to them.

I'd hate to see the people you mention manage my social security fund. They'll probably do something stupid like "Buy American", "Don't invest in off-shoring companies or nations", "Never invest in tobacco/beer companies", "Don't invest in oil companies or any nation's bonds who's major source is oil", "Only invest in 'green' nations", "Buy Venezuela bonds over Chilean/Peruvian/Mexican bonds since they redistribute wealth more proportionally than other nations", "Don't buy the bonds of Exxon, Microsoft, Google, Apple, or pharmaceutical companies that have cash stashed overseas", "Don't invest in banks or health insurance companies", etc...

I can see it now.
What does Elizabeth Warren and Paul Krugman know about bonds that Bill Gross and Mohammed El-Arian do not?