Why we shouldn't invest social security in the stock market

Social Security is an insurance program. It's a safety net. You don't take insurance money and turn it into an investment. That's risky and stupid behavior for an individual and grossly negligent behavior if you're the government.

Today's Wall Street Journal illustrates why putting the nations insurance money into the stock market would be a profoundly stupid idea,

Conventional stock-market wisdom holds that if investors buy a broad range of stocks and hold them, they will do better than they would in other investments. But that rule hasn't held up for stocks bought in the late 1990s or 2000.

Over the past nine years, the S&P 500 is the worst-performing of nine different investment vehicles tracked by Morningstar, including commodities, real-estate investment trusts, gold and foreign stocks. Big U.S. stocks were outrun even by Treasury bonds, which historically perform much less well than stocks. Adjusted for inflation, Treasurys are up 4.7% a year over the past nine years, and up 5.8% a year since the March 2000 stock peak. An index of commodities has shown about twice the annual gains of bonds, as have real-estate investment trusts.

The Social Security trust fund is invested in Treasury Bonds. Our esteemed President demagogued the current program and referred to those bonds as "just IOU's." Well those IOU's have proven themselves to be a much safer and sounder investment than the stock market.