GeoLane at PTD dot NET wrote in message
...

Hypothetical: SS revenues this year are larger than outlays. So Treasury
takes in the extra SS money from individuals and puts it into an account.
You might think of it as an escrow account -- only it can't be, actually,
because there is no higher bank or other place they can deposit that money
to assure it's going to stay there. So they just put it in something like
a
federal banking reserve account (let's not get the Fed involved here
unless
you really want to). Treasury itself is keeping the account.

What has actually happened? The account is not a demand account -- it
doesn't "belong" to any individual or institution. Any claims against it
are
theoretical; they occur in the future, and ONLY if the actuarial guesswork
was right. No one can withdraw from it on demand or use it as collateral.
It's no longer part of the money supply. It's dead numbers on a page.

Ed. As a hypothetical, because it's never going to happen in our
lifetime. What would happen if that enormous sum of money were
invested by buying stocks and bonds of US companies, or all over the
world if the amount of money were too large for the US economy?

I haven't been reading on this, so there may be a downside that I
don't know about, but my intuition is that it would put the money to
useful purpose by allowing business to expand.

RWL

It's an interesting thought, and it's come up in some previous discussions.
I do see some downsides.

1) Obviously, you couldn't pick stocks or you'd be picking winners and
losers. So you invest in some kind of index funds. If the Dow or S&P crashes
across the board, like they did a few years ago, and if you were in charge
of the program at the time, senior citizens would cut your nuts off and the
head of AARP would use them for a hood ornament.

2) When you had to cash some of the fund shares in to pay for a Social
Security revenue shortfall, the whole world will know it beforehand and you
will crash the market, or the part of it covered by your index fund. Betty
White will cut your nose off and wear it as a brooch.

3) When you have excess revenue coming in and you're going to make an
index-fund buy, the whole world will know it in advance, the stocks in your
fund will become inflated beyond all recognition, and the seniors will send
the ghost of Lawrence Welk to blow champagne bubbles up the butts of you and
your offspring, for eternity.

4) You will distort markets all to hell because of the size and the
predictability of your purchases and sales.

5) Because of the above, you will always be buying high and selling low. You
will lose money rather than making it.

Otherwise, it's a great idea. d8-)

This is not to say that there isn't some kind of solution buried within your
general idea. I just can't imagine what it would be. Maybe someone else can
see an angle by which it would work.

--
Ed Huntress