The Social Security Trust Fund Is Invested In Low Yield Bonds
The Social Security Trust Fund invests exclusively in securities of the US Government, one of the poorest investments classes available. Stocks have outperformed investments in securities of the US Government by more than 50 to 1 over the life of Social Security.
In 2012, the Social Security Trust Fund bought bonds with an average yield of 1.458% at a time when the system is running out of money.
The Associated Risk
While the bonds held by the Social Security Trust Fund are "backed by the full faith and credit of the U. S. Government", the debt ceiling debates have introduced the idea of sovereign default.
Critics of investing in equities suggest that such an investment policy is risky and complicated. Nothing is more risky than what we are doing. We have 100% of our money in a single issuer within a single asset class that has enjoyed a 30 year bull market.
It should outrage every American that we ask more of workers and offer less to retirees because the government manages our money so poorly.