Nix Social Security Use of Stocks

Brief

Nix Social Security Use of Stocks

Commentary
February 10, 1999

Abstract

[Newsday] Historically, Social Security trust funds have invested only in government bonds. President Bill Clinton would like them also to invest in corporate stocks. The stocks are expected to yield a higher return than bonds, thus postponing the date at which the trust fund is exhausted by the retirement of the baby boomers. He says the trust funds would own about 4 percent of the stock market within 15 years.
It is a bad idea. The potential gain is not very great, and the risk is high that Congress would use the equity investments of the trust funds for political purposes.

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