Why not have the government invest in stocks for Social Security?
Q. I gather from some of your columns that you are an advocate of privatizing Social Security. Would you please explain to me why privatizing Social Security with all its uncertainties (when withdrawal time comes) is better than the government investing the funds in a broad index fund — such as the Wilshire 5000? I assume that legislation would have to be passed which would forbid Congress from tampering with the investments or playing favorites. – K.S., San Antonio, TX A. The primary reason is simple: the unfunded obligations of Social Security — the difference between what the system has promised to pay out in retirement benefits and what it expects to receive in employment tax revenues — have been gigantic for decades. Basically, a funded Social Security program would need to own virtually all of the assets in America. The obligation is simply too big a number to be sustained by government ownership of assets. As an alternative, we need to find an efficient way to provide a priva